Spatial Market Analysis with WebGIS

How WIGeoWeb supports Spatial Analytics

WIGeoWeb links your company, market, and geodata on interactive maps. This creates transparency and enables new insights:

• Combine and visualize all relevant data in a clear manner
• Analyze market potential, sales, or locations on a regional basis
• Locate target groups and competitors at a glance
• Easily create up-to-date reports for operational measures

Thanks to flexible interfaces, intelligent rights management, and optional cloud or on-premise solutions, WIGeoWeb can be optimally adapted to your requirements. It is intuitive to use—ideal for a wide variety of departments.

Exploit the full potential of your market: With the market analysis software WIGeoWeb, you can take your analysis and decision-making processes to the next level – location-based, efficient, and future-proof.

1. Customer Analysis in WebGIS

With customer analyses, you are dealing with the data of your existing customers, i.e. company data from your management systems. It is about gaining clarity on “good” and “bad” customers and gaining knowledge about customer satisfaction. Measures can be derived from this for both customer retention and new customer acquisition. 

Good customers are profitable and they are loyal. Customer loyalty is important because winning a new customer is five times more expensive than keeping an existing one. 

Sales are included in the determination of the customer value, but also the costs for customer service. An ABC analysis is suitable for determining the customer value: According to the Pareto rule, the top 20% of the customers generate 80% of the sales.

2. Target Group Analysis

Even before you have built up a customer base, you will probably deal with your target groups. You know your product. But do you also know who buys it? Here we mostly speak of end customers and characteristics. The most important characteristics are age, purchasing power, sometimes gender and, as basic it as it may seem, the number of inhabitants (where do a lot of people live?). There is data on hundreds of characteristics, so you can also search for singles, garden owners, apartment buildings, high car density and purchasing power for certain product lines, or you can combine two or more characteristics. 

Even if you have been in business for a long time, you will be concerned with target groups again and again. Very often it is about developing measures for marketing and advertising, but it is also important for sales planning to know where the target group can be found. When you make decisions and changes, they can be easily justified by the results of the analyses.

3. Market Shares Calculation Spatially

Clarity about your own market share is essential for such fundamental things as your company strategy. Here we are initially talking about actual turnover/sales that have already been generated (turnover= euros, sales = units). Market shares can vary widely between product groups. For example, a telecommunications company may be the market leader in the fixed network sector, but it may be at the bottom end in mobile broadband. 

The market share is calculated from the share of the total market volume (= total turnover/sales of all providers on the market) that a company sells with its product. Example: 1,000 cars are registered in region X (this number is available). Since a car battery lasts an average of 5 years, the total market volume is 200 batteries per year. If a manufacturer has sold 50 batteries in the region, its market share is 25%.

Of course the calculation is not always that easy. The number of batteries sold is rarely as transparent as for instance the number of cars, which can be determined by the number of vehicle registrations. In addition to the lifespan, other factors are relevant, such as the purchase frequency. 

With WebGIS, you can in turn carry out this market analysis on every spatial level, if necessary even on a small scale (entire market, region, ZIP code, etc.) and visualize the distribution on a map. Once you have the appropriate numbers in the tool, you can easily switch between the levels.

4. Market Penetration Analysis

So far we have been working with actual sales. Market penetration analysis is about sales/turnover forecasts for the future. In the example above, where you sell 50 car batteries in district X, your market volume is 200 batteries because you know the number of cars and each car has a battery. However, the market penetration could be higher, namely if the market for cars grows, so it can be expected that the number of cars will increase. In the early days of mobile communications, only a few mobile phones were sold in relation to the number of inhabitants. The market later developed so that multiple devices were possible per inhabitant. Market exploitation indicates the extent to which potential possible customers of a product actually consume it.

It is clear that you have to make assumptions for a penetration analysis. Surveys can show how much demand there is for a product that is still unknown.

5. Competition Analysis on Maps

The competition analysis gives you an overview of your competitors and thus your own position in the market, which you can then adjust, even on a small scale. The competition analysis is often neglected, not least because it is difficult: A lot of data is not available or is secret. However, it pays off to analyze the strengths and weaknesses of your competitors and to draw conclusions for your own business. 

There are numerous sources for this: Online research & other publications, personal contacts, your own sales representatives, customers, trade fairs, associations and much more.

The Right Data for Geomarketing Success

If you’ve read this far, it should be clear: The availability and quality of your data is a key factor for your market analysis. On the one hand, we warned you against even performing the analysis if you lacked perfect data, and on the other hand, of course, your market analysis can only be as good as the data you use. Since it can be time-consuming and/or costly to get good data, it is a matter of weighing the effort versus the benefit.

We basically differentiate between internal and external data. 

Internal data is your company data, e.g. the data from your CRM system, your sales figures etc. The problem is often not the lack of availability, but exactly the opposite: you have more than enough information, but it is scattered throughout the company in different departments and IT systems. In order to be able to use the data sensibly, it first has to be collected, sorted, standardized and adjusted, or in other words: integrated. If this has not already been done, it is worth investing in your own IT or getting external help. Good data management is not set up overnight.

External data, including market data or “demographic data”, are all data that you do not generate yourself in the company, but which you need for your analyses, such as the already mentioned data on target groups, market volumes, competition etc. Much of this data is available free of charge or is open source, but sometimes it is necessary to purchase data, or it is worth it for reasons of quality and efficiency. 

Here the German and Austrian markets differ fundamentally in some points, which is good news: There is good data for both markets. However, you have to know where to find it, what to look for and the granularity you need. We have compiled interesting information on demographics for you.

Conclusion

Market analyses are essential for making the right decisions in your company. The analyses presented here do not have to be performed in a specific order, but are valuable instruments that can be used as required. They answer questions from every area of your company: strategy, product development, marketing, branch location decisions and sales.

Market Analysis Tools like WIGeoWeb focus on spatial relations and have the advantage over other methods that questions can be answered very regionally and even on a smaller scale if required. For example, submarkets can be analyzed. Another advantage is that numerous analyses can be carried out with just one tool, including the six presented here.

Tip!

The clearer the facts on the table, the better you can manage your company. Market analyses provide these facts. It is often necessary to convince colleagues from other departments. Market analyses provide you with arguments!