Introducing GIS in marketing analysis and sales management.

Badea, Ruxandra ; Bagu, Constantin ; Voicu, Vlad 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). The quality and the opportunity of information held influence the strategic decision process and have a major impact on the future development of the organization. In this context managers need to use powerful instruments for decision making, instruments that can capture, process and display a true image of the reality through a spatial representation of its characteristics.

Taking in consideration all these aspects, the paper aims to draw attention on the impact of using Geographical Information Systems (GIS) in the economic activity in Romania. Through these tools users can perform complete and complex market analysis, analysis that brings together geographical, economical and census datasets. This means using complex applications for market analysis, based on GIS technologies. (Badea et al, 2008)

Recent studies show that 80% of the total data handled by decision makers in any organization, public or private, has a geographic component. Key activities depend on knowing where the clients and the potential clients are. As a consequence, in order to efficiently manage the physical assets and the human resources necessary in forecasting and satisfying the demand, using the geographical component becomes compulsory. (Badea et al, 2007)

Big providers of GIS software started to pay attention to the business analysis component. For example the biggest provider of Geographic Information Systems, ESRI, developed an extension specialized in Business Analysis. In the USA the extension is provided together with a database that consists of business, household and demographic data. Seeing all that data on a map gives a better insight and helps in making better decisions. Modeling processes included in GIS help in obtaining a spatial representation of the market's characteristics. (Zeiler, 1999). Using these tools has a great relevance on elaborating the development strategy of different companies, as they give them the possibility to use these datasets in achieving their own objectives.

2. BACKGROUND

The use of spatial information in the economic activity was not documented in the specialty literature in Romania. However, even though bibliographic resources are limited, the international literature provides many articles written by western specialists which have studied the field.

David Bennison shows in his articles the importance of using the geographic information in management and marketing, especially for much more rational base-setting of the enterprise strategic decisions. (Bennison, 2005)

In countries like France or Sweden, applications which embed georeferenced data have been developed. Following the American model, adapted software instruments have been conceived to fit the national conditions and to satisfy the needs of local users. Such applications exist in England, but the datasets are not georeferenced. Only local delineations exist for demographic and other data. This is the cause of high degree of uncertainty of the analysis performed. (Badea et al, 2008)

3. THE CASE OF ROMANIA. RESULTS ACHIEVED

One project is going on in the present and focuses on the following objectives: 1) The establishment of a geo-referenced database for Bucharest and the parametric validation of the geographic information. The database will contain economic, geographic and census data offering the possibility to make complex analysis. 2) The elaboration of a modular software application; each module will be customized taking into account the field of interest and the structure of the database. 3) The elaboration of an analytical model which will allow the analysis of the obtained results and the establishment of synthetic indicators for economic prognosis. The project will be finalized in a Ph. D. thesis.

The project aims to implement and test the application on a complex database belonging to Bucharest, which incorporates geographic, economic and demographic data. The structure model for this data was defined in the first part of the project. As a punctual connection between elements contained in the thematic information layers, the following data was introduced in the system: the address, the postal number and the stereographic (x, y) or geographic coordinates.

Until now the datasets were gathered and the geographical information was attached. This is an important aspect of the project as it is the necessary condition to display all the information owned on an interactive map. The validation of the datasets on the field is the next logical step.

4. RESULTS TO BE ACHIEVED

Any commercial entity or public institution will be able to obtain with this application the necessary data in order to make its activity more efficient.

In practice, through a computer, any organization can gain access to a relational database to find all the necessary information for better knowing and understanding the market. Moreover, besides the valuable information about the market, the users have the possibility to exploit the information sets about their own activity and will be able to take real-time decisions. Even though they contain specific thematic information, these datasets must have a geographic component which, in correlation with GIS, will allow the localization of the features of interest on the digital map. The GIS application provides an efficient and ergonomic user friendly interface, which generates "thematic maps" through interrogations addressed to the databases administration system. The maps are being structured in such a manner that allows the economic entity to build an exact picture about a certain area (sector, neighborhood, street, address, objective etc.). In this manner, the user will be capable to analyze the area of interest using diversified interrogation criteria such as: demography (labor force availability, age group, gender group, income level, education level, marital status, etc.), infrastructure (communication and public utility network, education and health network, etc.). Because this information is accessible, the market on which they activate becomes more transparent, and the time period between analysis and decision decreases considerably.

This type of informatics solutions, based on predefined datasets, is successfully applied by U.S. and western-European companies in economic analysis domains such as: consumer profile quantification, complex marketing analysis, strategic segmentation, optimal placement determination for new outlets, transportation/supply or logistics. Also, even public institutions often use similar tools, adapted to census campaigns, population evidence updating, taxes assessment, etc.

5. CONCLUSIONS

Using these informatics platforms is, for sure, a tendency and a necessity of the near future. In the western European countries and in the U.S. this is a common practice. Romania must line up to this reality. Taking into account that our country must recover as soon as possible an important technological gap, this project aims to develop a complex marketing GIS-based instrument and a composite database which will allow the augmentation of Romanian economic entities' competitiveness. In order to be competitive, Romanian organizations must embrace the latest technologies and use up-to-date instruments which, once implemented, become a real competitive advantage. Adjusting these solutions to the Romanian market context develops into a necessity. Actually, the application developed by this project will be a powerful software tool for modeling, analysis and decision. Among the facilities offered, we can list the integration with the GIS technology and the possibility of storing a great amount of data organized into a minimum 12-month data archive, making possible a high level of statistical processing. Besides that, analysis can be performed using a large number of variables for setting interest values for unknown elements which are, most of the times, hidden for classic analysis of economic prognosis. In this context and according with global tendencies, the project proposes to elaborate a very useful application for decision-makers in Romania that will be adapted to the structure of Romanian economy, which finds itself in profound transformation.

The economic organizations must administer and use a large amount of thematic information. This information includes: a geographic localization, an address, a specific service's area coverage, a sales territory, a delivery route that may be visualized and analyzed on a map. The profitableness maximization is realized through a suite of GIS applications. These applications include selecting of the best emplacements, defining the consumer's profile, market polls and the supplying of services based on optimal localization.

[FIGURE 1 OMITTED]

These aspects can be controlled by extrapolating the known values, with the help of GIS techniques, to zones where relevant information is not available. Practically, when the necessary data for a certain customer group is known and it is arranged within a vector structure, an estimation of the stratified component of similar groups becomes available using computer assisted comparative analysis of satellite images (by taking in consideration the density of built areas and building types) (Figure 1)

Through GIS analysis, area with commercial potential that is similar or almost similar as structure with the known model may be established, without using subjective declarative information that are the basis for classic analysis approaches.

The improvement of the decisional results comes from the fact that understanding the factors that influence the demand correlated to the physical localization of the demand eases the manage process and thus:

* The decisions may be applied faster

* The opportunities and risks are easier identified

* Allocating finances and human resources are more rationally made

Efforts for mobilizing the organization's resources to satisfy the client's needs are more efficient

6. REFERENCES

Badea, A.; Dana, I.F.; Moise, C.; Mamulea A.A. & Badea, R.(2007). Method for Multi-Source Data Exploitation, Support for Crisis Situations Management., Proceedings of the 18th International DAAAM Symposium, Katalinic, B. (Ed), pp 45-46., ISSN 1726-9679, Zadar, Croatia, 2007,, Viena

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,

Bennison, D.(2005). Retailing and the Marketing of Urban Places: a UK perspective, International Review of Retail, Distribution and Consumer Research, 15 (2), p. 191-215, ISSN 0959-3969, UK

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

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