Geodemographics

CONTENTS 3.1 Context........................................................................................................ 43 3.2 Origins of Geodemographics: The Classification

of Residential Neighborhoods ................................................................ 45 3.3 Applications of Neighborhood Classification Systems ...................... 46 3.4 Methods of Accessing Geodemographic Information........................ 49 3.5 Relation between Suppliers and Users ................................................. 51 3.6 Internationalization of Geodemographics ............................................ 52 3.7 Limitations of Geodemographic Analysis ............................................ 55 3.8 Geodemographics and Government...................................................... 57 3.9 Neighborhood Classification Systems in China .................................. 61 3.10 Using Multilevel Geography to Improve Discrimination

in the United Kingdom............................................................................ 65 3.11 Conclusions................................................................................................ 67 References ............................................................................................................. 68

Geodemographics is a term used to define an increasingly important field of research that involves the classification of consumers according to the type of residential area in which they live. The practice was pioneered in the early 1970s to assist governments with the identification of inner-city communities for which different policy interventions were appropriate (Webber, 1975; Webber and Craig, 1978). Since the early 1980s, the application has subsequently spread to commercial organizations who have sought to tailor their investments in facilities and in communications to the specific interests of the local communities that they service (Weiss, 1988; Sleight, 2004). Today most of the large consumer-facing international brands use geodemographic classification to improve their business

performance in applications such as retail-site location, the setting of local sales targets, the distribution of promotional material, customer relationship management, and risk management. As governments seek to adopt proven techniques from the private sector, recent years have witnessed a renewed interest in the application of geodemographic classifications in sectors such as policing, health and education, and areas of public sector service provision which absorb high levels of funding but for which responsibility is devolved to local delivery units because of the wide variations in service need at a local level. During recent years the use of geodemographics has extended beyond the United States and the United Kingdom to cover most of continental Europe and much of East Asia. Because of the geographical nature of the application, most users of

geodemographics recognize the need for the investment in some form of information system for manipulating the geographical information they hold regarding the home locations of their customers, the postal, administrative, media, and sales geographies used in their business, and the locational information they hold about their outlets and those of their competitors. However, many geographers have found it more difficult to recognize the differences between conventional GIS and geodemographic information systems than their similarities. This has often led to a failure to recognize the bespoke investments that are needed in software solutions as well as in data and visualization tools in order to sustain effective returns from this form of analysis. Many successful commercial applications of GIS to the analysis of human

behavior involve common elements structured in familiar ways but in a bespoke development. The developer is likely to work to a brief which will list the most critical applications to which the system will be put. An assessment is made from various datasets needed to support the application. These will be referenced to each other and configured within an established set of software tools. Query opportunities will be made available to users via some form of network. Operators will then be trained in the use of the system to support the set of applications agreed at the outset of the project. Typically the system will then be capable of supporting additional quer-

ies. However, in practice, the modifications needed to support extra functions will often need to be handled by information specialists. Such a model, to which real-life applications only approximate, typically proves highly effective in applications which are predictable, involve use by operators on a routine rather than an occasional basis, support operational rather than strategic queries, and where operational savings are easy to quantify and demonstrate. Elsewhere, and commonly in academic and research environments, users make use of powerful GIS packages to undertake a series of bespoke analyses. The key difference between geodemographic information systems and

mainstream GIS is that whereas conventional GIS tools and datasets are application independent, geodemographics involves the structuring of GIS

software and geographical databases in a generic form which is designed to support a general class of users thought to have similar application requirements. The customer of a geodemographic system therefore purchases, or more often leases, an application which is largely prebuilt, and in which different types of data are preconfigured both in relation to each other and standard GIS tools. Such systems are then supported with an ongoing training, consultancy, and updating service which is of a standard level of service and supplied at prices based on a standard rate-card. Such an approach necessarily reduces the specificity of each application

because the product itself is generic. However, the approach does assure users of access to standard industry methods of tackling particular applications. The other principal benefit is the lower cost of access to these applications and, in a commercial environment, the security of knowing that one is no longer at a competitive disadvantage to rivals who may have the resources to design and commission their own systems.