A reliable basis of planning is a prerequisite for successful expansion and the sustainable operation of branches both domestically and abroad. Regional market data comprises an indispensable basis of planning and analysis for sales and expansion endeavors. It's essential that this data be up-to-date and offer high-quality, gapless coverage.

Location planning is one of the most expensive and risky challenges faced by companies and directly impacts future competitiveness. These decisions often entail millions of dollars of investment and determine the prospects of a company for years to come. As such, the decisions must be based on reliable data and then communicated in an objective and transparent manner.

Data in GfK quality

The quality of data directly influences the success of analyses and planning endeavors. All of GfK GeoMarketing's data has been intensively researched and validated. Thanks to the worldwide market research network of the GfK Group, we have access to an unprecedented range of international market and target group data. Our data experts use a diverse array of techniques to model the regional distribution of this data and create an accurate portrait of the actual situation on site.

The results are then examined and validated by our location experts, who have first-hand experience of locations across Europe thanks to detailed on-site studies. This expertise is taken into account in GfK GeoMarketing's data modeling techniques, which are continually refined to ensure the highest possible accuracy. This is essential, because on-site conditions and available data sources change from year to year - hence the importance of always working with up-to-date data. An additional advantage of working with regularly updated studies is that ever more detailed data becomes available for many locations, which can then be taken into account.

Europe-wide market data

GfK GeoMarketing's regional market data thus provides an objective decision-making basis that supports comparisons across multiple regional levels. The data offers the means of answering the following questions:

• How is the market potential distributed and where are the best turnover prospects for our products?
• Where are the intended target groups most concentrated and can they easily access the planned locations?
• How many locations can be successfully and sustainably operated within a given region?
• Which locations are most successful and offer the best future prospects?
• Which locations should be quickly acquired in order to ensure optimal market penetration?

Detailed location comparisons

GfK data on potential makes it possible to precisely gauge the quality and future prospects of locations while also facilitating comparisons between the various locations under consideration. In addition to purchasing power data, GfK GeoMarketing also offers data on the retail sector, socio-demographic characteristics, as well as information on market players and industry and business potential.

The data is calculated at a detailed level (often the postcode level), which supports comparisons of locations and catchment area analyses of specific city districts.

Analyzing the drawing power of potential locations

The scope or drawing power of the product itself must be taken into account when evaluating prospective locations. This refers to the distance that a consumer is willing to travel to make a purchase - for example, only a few hundred meters in the case of toothbrushes. However, this could easily extend to several dozen kilometers in the case of luxury automobiles. Information from cash register surveys and customer loyalty card programs can also be useful for determining the maximum distance customers are willing to travel.

The drawing power of a location is also decisive with regard to how much of the existing potential in the catchment area it can exploit. Product- and branch-specific market data are indispensable when it comes to determining the extent of this drawing power. Such analyses involve incorporating data on target groups, including their socio-demographic profile and the degree of purchasing power available for the product line in question. Macro-economic place-based factors must also be taken into account, as the success of a branch site is often strongly determined by the quality of the surrounding retail environment. Particularly important in this regard are retail turnover and centrality figures: The former reveal the regional turnover of the entire retail sector within a given region, while the latter measure the ability of a given retail location to draw on the purchasing power beyond its immediate borders. Agglomeration effects and competitors in the catchment area also impact the drawing power of a location. An analysis of a prospective site's drawing power also entails taking into account the performance data of already existing locations.

GfK GeoMarketing's retail experts can provide companies interested in expanding with precise information on the factors that will most affect the turnover of a given location and to what degree, including the available turnover potential for each postcode and municipality under consideration.

The drawing power and turnover potential of a prospective location can be modeled using detailed maps and a geomarketing solution such as RegioGraph Strategy that contains an integrated gravity model. This allows comparing the regional potential with the competitive situation and distance to a prospective location, which reveals whether the potential available in a catchment area will lead to sustained success.

A detailed analysis of the prospective locations illuminates their strengths and weaknesses, making it possible to narrow down the options under review. However, the last step of an expansion planning endeavor should always be an on-site evaluation of the locations and real estate objects under review in order to assess the quality of the micro-location and immediate surroundings. Many location-specific criteria can only be evaluated on-site by experienced professionals, including the accessibility by public transport, parking provision, visitor frequency and quality of the real estate object in question.

Image: How far does the potential for a given location extend? Are there enough customers with sufficient purchasing power in the target catchment area or is a competitor siphoning off too much potential? An analysis of GfK market data using the gravity model in RegioGraph Strategy reveals the potential turnover reach of a given location.

Sales controlling: Gauging success and fine-tuning

Regional data on potential and cartographic analyses also comprise the basis of measuring success after an expansion or the market launch of a product and reveal the regions and locations in need of optimization. One aspect of such analyses involves comparing the target turnover with the available market potential, which is revealed by regional market data. This makes it possible to evaluate a company's success and market exploitation and then make realistic plans for the subsequent phases of market development. GfK market data also helps companies answer question such as:

• What is the market penetration in the individual regions under review?
• Where are good areas for additional locations?
• What are realistic turnover and growth goals for the sales territories or branch sites?

Summary

Detailed, high-quality data on regional potential used in combination with maps and a geomarketing software such as RegioGraph allows companies to quickly and precisely determine the regions of a given country with the best turnover prospects. GfK regional market data offers a reliable, Europe-wide basis of planning - from the initial planning stage and preliminary selection of suitable new locations to the detailed evaluation of economic and socio-demographic factors in selected target regions and fine-tuning of branch, sales and supply networks.

We have firsthand, on-site knowledge of all European markets and can support you throughout all phases of expansion planning.

GfK market data available for many European countries:

• GfK Purchasing Power
• GfK Retail Purchasing Power
• GfK Retail Centrality
• GfK Retail Turnover
• GfK Purchasing Power for Retail Product Lines

All data fits seamlessly with GfK GeoMarketing's digital maps. Find out more at www.gfk-geomarketing.com/catalog

All data is intensively researched and validated each year prior to the release of the new market studies.

We'd be happy to assist you!

Oliver Giehsel
Tel. +49 (0)7251 9295165
o.giehsel(at)gfk-geomarketing.com