Using databases and GIS in sales management.

Badea, Ruxandra ; Badea, Alexandru ; Moise, Cristian 等

1. INTRODUCTION

In the present context of the globalization of the economic activity and the expansion of knowledge management, the structured information a company owns becomes a vital resource for maintaining the level of competitiveness (Donaldson, 2005). Using geographic information and spatial analysis in economic fields, which depend more or less of the geographical component, can be an innovative measure and a source of competitive advantages. The innovative instruments which allow managers to introduce these concepts in their activity are Geographical Information Systems (GIS). These tools have a great importance in all economic fields and especially in marketing and sales. Their efficiency recommends them as instruments of the future and their assimilation in organizations equals lower costs and a better understanding of the target market.

GIS is very useful in all the component activities of sales management like sales forecasting, sales territory management, sales force distribution, selecting the best location for new sales points. With GIS complex market analysis can be made easy, competitors can be analyzed, the potential sales areas can be studied and decisions can be more easily taken. The decisional factors of a company have the complete picture of any situation when making a decision.

The tangible benefits of using GIS in sales management can be seen in the rise of the productivity of sales forces, the diminution of operational costs and of the number of sales agents. In the same time customer satisfaction rises and overall costs are diminished.

2. BACKGROUND

The use of spatial information in the economic activity in Romania is rather rare. Not many companies use spatial information to analyze elements of interest even though they have all the information at their disposal. Tables and graphs will never be as easily read as a map, especially in areas where location is an important variable of the problem (Badea et al, 2008). Studies performed at this point try to show the benefits of GIS and location based analysis in all economic fields. In a small degree this information is used by banks to locate and place ATMs and in logistics to manage transports and dimension transport loads.

3. CASE STUDY

In the case of a fictional Romanian supermarket named Coral many analyses were performed using GIS techniques to show the potential benefits and the valuable information that can be obtained. Considering a sample area around the supermarket we can see the concentrations of clients in different shades from light green to dark green. We can also see the competition around and analyze it. By knowing the socio-demographic profile of our clients we can perform complex analysis and even build up customer profiles. (Miller, 2007)

[FIGURE 1 OMITTED]

The target areas can be seen in the image below. Being a local supermarket with a rather poor offer it bases its strategy on being a proximity store for customers found in the surrounding areas. The competition can be seen on the map based on their annual revenues. The bigger circles mean bigger revenues. We can calculate distances and appreciate competition levels. Using a measure tool we can see exactly how much each store can influence the subject store.

[FIGURE 2 OMITTED]

4. RESULTS TO BE ACHIEVED

As all companies, Coral superstore has a certain geographic territory which constantly needs to be defined and analyzed. This means that besides the territory analysis based on clients, these territories come with their own demographic and social-economic information. In this manner we have a complete profile of our customers and information about their age, sex, education level or income. All these elements are essential for an efficient planning based on demography, client dispersion, market trends, sales personnel and demographic profiles. We can see where we have territories with sales lower than expected, we can see if territories are equilibrate from the clients' point of view and in which territories we have the most complain from clients. Managers also have a better picture on the competitors that act in a certain territory.

Correct planning, optimization and implementation of the distribution logistics affect the profitability of the company. Managers have to face unpredictable situations and have to take into account a multitude of parameters. They have to keep transport costs at a minimum level without compromising restrictions like time, transport load, weather and schedules, or the most important factor, customer satisfaction. For all these problems GIS applications can make the difference. (Maguire et al, 2008)

5. CONCLUSIONS

Using at large scale Geographic Information Systems consists, in fact, in a platform for implementing a management based on knowledge. Also, in the economic field the preoccupation of integrating the Geographic Informational Systems, even if recent, has gained momentum and the applications have multiple uses, therefore becoming a necessity.

The most important thing in today's economy is to know were clients and potential clients are and how they react to promotional activities. In the present context of the financial crisis it is crucial for companies to know exactly were customers can be found, as it would be a waste of resources to spend money on promotional campaigns that are not well oriented and that won't produce results in the end. Companies need now to focus their efforts in making the most out of what they have, this meaning preserving their customers and knowing how to promote their products to the real potential customers. Risks should be avoided as much as possible, this being the reason why businesses will need to make their markets transparent in order to survive. Making this bond with their customers will be a serious plus and will definitely make the competition easier. More and more organizations around the world are already taking advantage of these solutions and the economical context will force all companies to make their activities as efficient as possible. The financial investment is not big compared to benefits and the advantage of using a GIS platform is obvious.(Maguire et al, 2008)

The GIS applications for sales and marketing concentrate on the following aspects:

* Market prospecting, knowing where the clients and the potential clients are

* Dimensioning and placing of the commercial zones based on population density

* Forecasting the sales for retail points for a certain period of time. Building models for sales forecasting for a certain retail point and predicting the future characteristics of a sale area based on historic datasets.

* Performing an interactive forecast of the sales and building interactive models of market segmentation

* Using the gravitational model for optimal placing of a new store. Developing gravitational models for estimating the potential sales at the new retail sales points

* Performing analysis based on the average time of traveling the distance to the sale points

* Evaluation of competitors and building up a complete picture of the competition and its characteristics.

* Orienting the marketing campaigns and improving performances in marketing communication (customer information may vary and help in strategic segmentation and in discovering the most efficient communication channels)

* Finding the ideal customer's profile for aiming groups with similar characteristics

Supplementary thematic maps will complete the analysis scenario and may serve to utilities providers or public institutions without commercial profile, if the following are added:

* Zonal estimation of utility consume (electricity, water, telecommunications, etc)

* Dimensioning the common carrier services by estimating the number of passengers

* Forecasting of the necessary educational services (kindergartens, schools, high schools, etc) based on demographic prognoses

* Computing the crime degree and developing of certain combat methods

* Complex analysis regarding the population's heath and risk factors of a zone

* Labor force occupation degree related to demanded work force

* Placing and dimensioning of service points (banks, hospitals, pharmacies, fire stations, etc)

* Planning the roads exoneration based on estimations of usage and traffic degree

* Monitoring the pollution degree

The obvious conclusion is that using GIS is an important asset in a company, an asset which can transform in a real competitive advantage.

6. REFFERENCES

Badea, R; Voicu, V., Bagu, C., Lungu, A., Moise, C., (2008) Introducing Gis In Marketing Analysis And Sales Management, Annals of DAAAM for 2008 & Proceedings Of The 19th International Daaam Symposium "Intelligent Manufacturing & Automation: Focus On Next Generation Of Intelligent Systems And Solutions", ISBN 978-3-901509-68-1, ISSN 1726-9679, pp 026, Editor B. Katalinic, Trnava, Slovakia, 2008

Badea, R., Voicu, V.& Moise, C.(2008). Ways to Improve Sales Management for Romanian Retailers Using Geographical Information Systems, Proceedings Of 9th WSEAS International Conference On Mathematics & Computers In Business &Economics (MCBE '08), Bucharest, Romania, June 24-26, 2008

Donaldson, B. (2005). Sales Management: Theory and Practice 3rd edition, Codecs Publishing House, ISBN CDCS-12, Bucharest

Maguire, D., Kouyoumjian, V., Smith, R., The Business Benefits of GIS, ISBN 978-1-58948-200-5, Published by ESRI Press, 2008

Miller, Fred L., GIS Tutorial for Marketing, ISBN 978-1-58948-079-7, Published by ESRI Press, 2007

Zeiller, M., (1999), Modeling our world, The ESRI Guide to Geodatabase design, ESRI Press, ISBN 1-879102-62-5, California, USA