Expanding overseas may sound like a good idea, but ask any marketer
who has attempted it and they will tell you how difficult it can be.
Knowing the ’lie of the land’ does not mean just a quick reconnaissance
of the target market - it means detailed analysis. Geographical
information systems (GIS) can offer a solution.
Tesco, which is increasing its presence in Hungary and the Czech
Republic by investing pounds 700m in three shopping malls in Prague and
Budapest, is one of many companies using GIS to plan overseas projects.
The retailer recently said it plans to build six megastores per year in
Eastern and Central Europe.
Several established map and data providers are meeting the demand
created by large users, such as Tesco. Experian, Claritas and Equifax
provide GIS packages and data for European markets and for parts of
Asia, Australasia and South Africa.
Tony Lythgoe, director of business development at Equifax Business
Solutions, says: ’We have mapping products for Spain and Portugal and
we’re looking at other countries. It comes down to the availability of
data. It’s relatively easy to map things but we need data sets to make
it a useful tool.’
Far and wide
Nigel Wilson, senior consultant at Experian, says it supplies its
Micromarketer product for Spain, France, Italy, Germany, the
Netherlands, Belgium, Scandinavia, the Republic of Ireland, Australia
and Japan. ’Our key markets for geodemographics are Germany and the
Netherlands. Historically, we are strong in Germany from the
partnerships we have formed there.’
Wilson has worked for clients including Ikea, American Express and
McDonald’s overlaying data sets onto Experian’s Micromarketer.
In the Netherlands, the use of GIS is very sophisticated due to the
range of data available from official sources such as utilities and the
Centre Parcs, the chain of holiday villages owned by Scottish &
Newcastle, used GIS to target potential visitors to its new Dutch
Nicole Kessels, Centre Parcs’ direct marketing manager (Netherlands),
says: ’A segmentation system linked to our own database gives us a
valuable insight into who our customers are, how they behave and where
we can find potential new customers.’
However, in some parts of Europe there are barriers to the successful
use of GIS.
’It is relatively straightforward to get mapping statistics. There tend
to be government departments responsible for the distribution of mapping
data,’ says Wilson. The difficulty can arise in finding relevant
marketing data in sufficient quantities to overlay on the geographical
’We are currently compiling a number of sets for Greece,’ says
’There we have problems with the sample size from the census, so we’re
using data from financial databases. But it is a huge problem combining
statistics to load onto GIS.’
The numbers crunch
Similar problems have been faced by Equifax and Experian when developing
GIS packages for Spain. The demand is there but the data is often hard
to come by. However, both data providers have successfully launched
Spanish GIS products.
Data protection laws and other legislation can also make some markets
less suitable for GIS analysis. Germany has some very tight data
protection laws, resulting, for instance, in some census information
While this is a problem for the marketer, there are compensations. ’We
have data down to microcells of five or six homes,’ says Wilson. ’This
enables more accuracy on some analysis than UK data.’
Richard Bandell, business development director of Claritas Europe, says
of the German market: ’There’s an awful lot of data available if you
look in the right places. Our advice when exploring such markets is
don’t take the advice of a single data supplier. We have to look more at
data integration rather than being a data seller.’
Europe may be becoming more of a homogeneous unit but there are still
massive variations in the ways in which markets are classified by GIS.
Some Mosaic or Acorn classifications (the demographic sets into which
consumers are grouped) are irrelevant in certain European regions.
While Experian’s Mosaic classifies UK consumers as, say, ’clever
capitalists’ or ’affluent blue-collar’, definitions vary in other
markets. In Spain, an important category is affluent company directors
living in city centre apartments. Vital categories in the Republic of
Ireland include ’three-generation communities’ and rural communities
labelled ’fathers and sons’, because two generations of the same family
Globally, GIS categories vary to an even greater extent. In Japan, for
instance, groups overlaid onto GIS include ’institutional old people’s
homes’ and ’long-distance commuters’.
While such varied demographic categories enable marketers to analyse
individual markets on the basis of their own culture, it can cause
problems when trying to identify common patterns across markets.
Kingswood, which supplies a GIS system called GeoConcept, helped its
client DFF, a management consultancy, analyse customers and distribution
across its borders.
Mary Short, managing director of Kingswood, says: ’Taking data from
different companies working with DFF caused problems unconnected to the
The big problem is that data from different organisations across markets
can be so inconsistent. It takes a lot of time to level the playing
One solution is to use the same GIS system for all markets. This is
possible with solutions such as Global Mosaic from Experian, which has
standardised data categories for markets including South Africa, Japan,
France and Australia.
However, Bandell warns against the concept of a ’European segmentation
system’ which will cover the whole continent. ’Systems need to be
flexible and able to accept data in different forms. You can’t apply the
same criteria to car buyers in Basingstoke and Bratislava.
Cultural differences need to be recognised, and the data itself will be
completely different,’ he says.
Instead, Bandell urges the offering of global solutions to clients,
combined with very specific local knowledge.
GIS is extending its influence outside the core markets of the US and
Western Europe. An intriguing example is McDonald’s, which works with
GIS vendor MapInfo on analysing customers and planning store
Life on the street
Bandell says Scandinavia is becoming a more sophisticated market. He has
worked with insurance firms in Sweden on targeting specific
’Analysis at street level enables us to look at each property and say
how many customers a client has there. We can then take that type of
street in other areas and assess whether the company is achieving its
potential,’ he says.
Perhaps the most interesting market for the expansion of GIS is in
Central and Eastern Europe. While mapping products are available, there
are issues surrounding data availability and quality which have yet to
Mapping information is relatively easy to obtain from government
agencies, but since the democratisation of Central and Eastern Europe,
suspicion surrounds the storage of data.
’The Czech Republic is one example,’ says Lythgoe. ’Because of the old
regime, it is now illegal to hold and store data. This makes GIS very
immature there. It’s up to the Western market to prove that there are
benefits in storing data.’
However, the demand is there. ’We are currently getting a huge amount of
interest in the former Eastern Bloc for a whole range of GIS and
customer management solutions,’ says Lythgoe.
Wilson agrees: ’Eastern Europe is a big issue. We have clients like
Tesco and Marks & Spencer who are facing data and mapping issues in
Eastern Europe. Getting hold of census and other data for local areas is
This was a problem facing Tesco when it started planning its Prague and
Budapest megastores. Experian provided mapping packages for both sites,
but it needed to gather more data on the local population and so sent
its own people to gather supplementary information.
Demand for GIS is also growing outside Europe. Lythgoe says the growth
of the Tiger economies - albeit now faltering - has seen firms from
Europe and the US demanding GIS solutions.
Thailand and Malaysia are important but relatively immature markets and
mapping systems for Hong Kong are widely available. Short says
GeoConcept is used across the world. TNT uses it in China to help
clients such as Procter & Gamble with the distribution of goods. Short
even has one client who uses GIS in Tanzania.
GIS is now available for most key markets outside the UK. Bandell says
demand is driven by clients who are moving into new markets and want
global solutions. ’In the past year, the majority of US companies in
automotive and retail have come to us and said ’Here are our plans, how
closely can you match them globally?’.’
The strength of GIS lies not just in classifying people by where they
live but in a whole range of other factors. As quantities of demographic
and lifestyle data increase in key markets across Europe and Asia, the
use of GIS can only increase.
MICROMARKETER GOES DUTCH
The Dutch Air Miles franchise LMN, whose shareholders include Shell and
ABN AMRO bank, uses Experian’s Micromarketer product to segment existing
customers. It has built a database of 2.3 million customers and segments
them geodemographically in order to facilitate targeted mailings.
LMN’s customer data is supplemented by Experian’s data before
segmentation. Gerard Zandbergen, Mosaic Micromarketer manager of
Experian Netherlands, says: ’Data comes from several sources. One is the
postal service. We also use market research bureaus and lists of private
Customers receive a quarterly statement but not everybody receives the
same mailing pack.
Customers are segmented and the data fed into the GIS system to provide
a geographical element. Offers for visits to local theme parks and
vouchers for local stores therefore go to people in specific regions.