A manufacture used a geomarketing approach to introduce a new juice product to the market. GfK GeoMarketing's expertise and data played a central role in the company's successful location of target groups and selection of suitable test markets.

A large beverage manufacturer wanted to establish a new juice brand in the German market. GfK GeoMarketing determined the most suitable locations for the initial introduction of the product. On the basis of this decision, the manufacturer was then able to define and plan its sales, marketing and logistics strategy.

"Because this new product belonged to a higher price segment, it didn't make sense to offer it in all of the standard supermarkets," explains GfK GeoMarketing project head Doris Steffen. "We consequently decided to focus on so-called test markets. By selecting suit-able locations with adequate potential, we helped the manufacturer through multiple planning phases."

Using a market study, the manufacturer defined the target groups for the new product as couples without children and singles in the 25-40 year-old age range with elevated incomes. GfK GeoMarketing used these criteria to calculate a Germany-focused target group index for this new product. The catchment areas of around 7,600 supermarkets were then systematically evaluated based on this specialized target group index.

"This allowed the manufacturer's product manager to immediately identify the most important consumer markets for the initial market entry phase," explains Steffen. 

Customized target group calculation

The first step involved calculating a product-specific target group index for all of Germany, down to a a very detailed regional level. To do this we used the information on family type, age range and income distribution contained in our study "GfK Demographics". GfK GeoMarketing calculates this dataset every year for all of Germany – from the level of federal states down to street segments.
 
Using the combination of data on family type, age range and income distribution we performed region-sensitive calculations of the specialized target group index for the new juice product. The target group index reveals the product affinities of the inhabitants of the relevant regions, showing where high concentrations of people live who have a particular affinity for products of this type. Only in these regions does it make sense for the company to initiate a trial introduction of the product.

Analyzing potential in catchment areas

The next step involved defining the surroundings of all potential market locations. The basis for this calculation was the importing, or geocoding, of around 7,600 supermarket addresses into our geomarketing software solution RegioGraph. "One of the challenges in determining the catchment area size of the various locations was taking into consideration the supermarket sizes and types in relation to their actual geographic locations across the country," explains Steffen. "Given the many types of markets under consideration, it didn't make sense to define a standard size for each catchment area."

The next step was the generation of a statistical typology for the various market types under review. Using an automated process, various catchment area sizes were defined according to the size of the associated market (e.g., supermarket, convenience store, department store, etc.) while simultaneously taking into the account the type of location (large city, mid-sized city, rural area).
 

A multifaceted geomarketing perspective

The last step involved transferring the regional target group index to the 7,600 market locations and evaluating them based on their respective catchment areas using the target group index. This revealed the locations with high target group index ratings, which were prime candidates for inclusion in the beverage manufacturer's product-introduction campaign.

Conclusion: Geomarketing brings direction to the planning process

 
Thanks to the target group and location analysis carried out by GfK GeoMarketing, the beverage manufacturer had a solid foundation for the introduction of its new product. Through a combination of insightful map analyses, comprehensive regional and product-specific target group data and detailed evaluations of catchment areas, GfK GeoMarketing supports retailers in planning new product launches, organizing product lines at the point of sale and optimizing operations in sales, logistics, marketing and controlling. "Knowledge of the geostrategic components involved – whether locations, target groups, competitor locations or geographic characteristics - plays a decisive role when it comes to successful business planning," adds Steffen.    

GfK GeoMarketing offers a wealth of products and services

We offer genuine added value through our extensive product portfolio and consultancy services. Our many years of experience and honed competency in almost all business branches make us the ideal partner for implementing a customized geomarketing approach. Thanks to being part of the GfK network, we have access to a wide range of studies and information that offer product- and branch-specific insights into the regions in which you are active. In addition to product affinities, we calculate region-specific target groups for many branches!

We also offer support and solutions for all location-related questions. Our Real Estate Consulting division carries out evaluations of real estate, locations and retail concepts in countries around the world.

Contact us to discuss your unique situation: Doris Steffen, d.steffen(at)gfk-geomarketing.com or +49(0)7251 / 9295 -180.