Geomarketing models in supermarket location strategies

Abstract

Choosing where to open a new outlet is a critical decision for retail firms. Building on the multiplicative competitive interaction model from retail location theory, this paper develops a geomarketing model that can be used to devise supermarket location strategies. First, attributes that explain a supermarket’s pull on consumers were determined. These attributes included objective (taken from databases and empirical observation) and subjective (based on managerial judgements) variables relating to the supermarket and its trade area. Then, geographic information system tools were used to analyse real data at a highly detailed level (road section). From a geomarketing viewpoint, the model shows that sociodemographic characteristics of the supermarket’s trade area affect firms’ location strategies. The paper also discusses improvements for calibrating and validating this model. Adding the spatial organization of supermarkets to the model yields a different consumer behaviour pattern. This geomarketing model can help managers to design supermarket location strategies according to shop features, competitors and environment, whilst estimating supermarket sales.

Keywords:

• geomarketing
• retail location theory
• geographic information systems (GIS)
• multiplicative competitive interaction model (MCI)
• business planning
• trade area
• neural networks
• spatial organization

JEL Classification:

• L81
• M31
• R30

Additional information

Notes on contributors

Amparo Baviera-Puig

Amparo BAVIERA-PUIG (PhD Universitat Politècnica de València, 2011) is a senior lecturer at the Universitat Politècnica de València (Spain) where she teaches courses in marketing, communication and CSR. Her primary research interests are in the area of geographical analysis applied to marketing and innovation. Her secondary research interests include the application of multicriteria decision models in marketing and communication. She has published several papers and book chapters on these topics.

Juan Buitrago-Vera

Juan BUITRAGO-VERA, PhD, is a senior lecturer at the Universitat Politècnica de València (Spain). In the field of Marketing and Retailing he is author of diverse papers in indexed journals and conferences. He is also author of various chapters in books. He has ongoing research interests in the geographical analysis and models design applied to retailers.

Carmen Escriba-Perez

Carmen ESCRIBA-PEREZ, PhD, is a senior lecturer in the Faculty of Business Administration and Management at the Universitat Politècnica de València, Spain. She has authored several journal articles and book chapters on agrifood marketing. She teaches marketing and trade management at the Universitat Politècnica de València.