Market segmentation using geographic information systems (GIS)

Abstract

PurposeTo show how the analytical and visualization capabilities of geographic information systems (GIS) can enhance the communication, understanding and utility of data and information to be used in marketing planning, as compared with their conventional presentation as text and tables.Design/methodology/approachA digital map of the study area was generated and a set of market zones. A multiple regression model for predicting sale of the product under study was then developed, taking into account sales figures from specific distribution outlets and the demographic and socio‐economic characteristics of the population served by the distribution outlets in the identified market zones. Optimum routes and times between the manufacturing plant and the distribution outlets were derived.FindingsCombining geospatial methods with conventional marketing techniques enables users to visualize the spatial distribution of data in maps, complemented by various statistical graphs and diagrams. This form of presentation yields better insights into the nature of the distribution process and better understanding of the diverse markets served.Research limitations/implicationsThis is a single case study of the solution to a logistical question in one district of one city in an African country. The findings must therefore be applied to other contexts with due caution.Practical implicationsThe study nevertheless vividly demonstrates the important role that GIS can play in sales and marketing planning.Originality/valueAn application of planning technology normally encountered in applications beyond the marketing discipline, readily transferable with care to more familiar situations and settings.