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Geomarketing models in supermarket location strategies

    Amparo Baviera-Puig Affiliation
    ; Juan Buitrago-Vera Affiliation
    ; Carmen Escriba-Perez Affiliation

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.

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

How to Cite
Baviera-Puig, A., Buitrago-Vera, J., & Escriba-Perez, C. (2016). Geomarketing models in supermarket location strategies. Journal of Business Economics and Management, 17(6), 1205-1221. https://doi.org/10.3846/16111699.2015.1113198
Published in Issue
Dec 21, 2016
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