Marketing technology: Making data go further - Geographical information systems are proving invaluable to UK firms expanding into international markets. IAN DARBY reports on the products available and the problems that must be overcome

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.

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

post office.

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

remaining confidential.

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’.

Cross-border clashes

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

be resolved.

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

nearly impossible.’

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.

Global demand

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.


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

car owners.’

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.


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