Only organizations had a tool that helped them to design channel coverage
and improve marketing channel effectiveness ...
Channel Strategy Consultants
USA - EUROPE - AUSTRALIA - BRAZIL - HONG KONG
Improving marketing channel effectiveness through GIS
– STAR methodology
A carefully researched, developed and implemented marketing channel strategy
is a powerful, proven tool with which a significant competitive advantage
can be gained. Channel design and management built on a framework which
balances marketing channel cost, control and coverage drives both channel
partner and company profitability.
Coverage is a key element in a marketing channel strategy. It is a major
determinant in consistent delivery of a company’s customer value proposition
and its management of channel partner conflict. Effective coverage co-relates
with a desired level of channel control. Control and coverage jointly
drive channel cost management.
Effective market coverage is colloquially described as “ being at the
right place at the right time”. From a customer’s frame of reference,
coverage can also be labeled as reach; a measure of time, distance and
cost. Adequate coverage enables organisations to maximize their income.
Geo-mapping, a tool built on Geographical Information Systems, is useful
for determining effective coverage and the role of channel partners in
What are Geographical Information Systems (GIS)?
GIS helps management to display, question and analyze spatial information.
It assists with location and coverage decisions by visualising, exploring
and analyzing data based on location - revealing patterns, relationships
and trends not readily apparent in traditional databases. Through GIS
disparate information can be linked. A GIS is a key tool in determining
the appropriate location and role of point of presence when taking into
account factors such as time, distance and cost.
Geographical Information Systems are powerful and proven tools for channel
coverage planning. STAR (Segment-Target-Approach-Reward) methodology,
employs GIS and enhances the effectiveness of a targeted marketing program,
improving the strike rate.
How does GIS – STAR methodology facilitate development
of an effective marketing program?
GIS – STAR methodology employs management, display, questioning and analysis
of spatial information to determine a channel coverage and customer approach
plan describing and defining:
Which customer classes bring longer lifetime value
How different customer segments should be approached
The lifetime rewards / benefits expected
The long and short-term risks in nurturing identified customer
What is GIS – STAR methodology?
GIS – STAR methodology provides directions, definitions and descriptions
to the following issues using a four step process:
areas where opportunities lie
Define the different customer classes in the selected opportunity areas
Determine the discrete and different existing and future customer segments
in the selected customer classes
Describe the selected customer segments
Determine the relationship among customer segments and define the pattern
and nature of relationships among and within customer segments
the Life Time Value (LTV) of a customer and / or a segment to the organisation
Determine the nature and level of risk emanating form potential competitors
as to net cash flow from selected customer segments
Determine which are the most desirable customer segments
Determine which customers are the optimum to acquire.
Determine the importance of selected customer segments given the organisation’s
long term plans
approach to selected customer segment/s
how to reward customers
Determine how to reward channel partners
Specify the nature and level of expected benefits
Once the process is complete, verify results compared to expectations
GIS – STAR methodology: The benefits
1. Effective marketing channel coverage
desirable and feasible customer segments with suitable channels and
channel partners, complemented with fitting channel support, delivers
a channel structure geared to maximum returns.
marketing program effectiveness
customer retention “wheat from chaff” and targeted promotions lead to
enhanced effectiveness of marketing programs which results in improved
return on marketing activities.
features give an organisation the capability to:
a) Foresee the impact of competitor activities on their cash flows
b) Assess and determine the most appropriate strategic response to possible
competitor activity resulting in an organisation being able to effectively
GIS – STAR: A powerful methodology
GIS - STAR is a powerful, results oriented methodology which can be used
to simulate the effects of changing environments. As a real time application
that is responsive to evolving market situations, GIS – STAR methodology
provides organizations with the opportunity to measure potential coverage
and control elements as part of an effective marketing channel strategy.
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