Location-Based Marketing. Gérard Cliquet

a traditional franchise and some of the fun of a “let’s-do-it-all-ourselves” start-up. Our philosophy is simple: let’s create unique neighborhood bakery cafes that are a reflection of the Great Harvest brand and the bakery cafe owner. We are no cookie cutter franchise. We are a freedom-based, healthy franchise that encourages excellence and individuality (not to mention a spirit of fun and generosity).²

      There are now more than 200 Great Harvest franchises in the United States (including Hawaii and Alaska). And every franchised bakery must be the bakery in the city: we immediately see the importance of localization and the need for highly targeted spatial marketing.

      But often, the franchisee’s freedom is more restricted and the peripheral components of the franchise are more limited, thus reducing the possibilities of adaptation. However, even large chains such as McDonald’s have realized that excessive standardization can lead to rapid consumer fatigue as consumers become increasingly eager to personalize the service and the products that go with it. The orientation towards “glocalization”, a process already mentioned above, is now effective at McDonald's (Crawford 2015), including in their desire to attract so-called “ethnic” customers: we understand the importance of spatial marketing based on geodemographics, GIS (Geographic Information System) and micromarketing in order to identify these targets and define an appropriate advertising strategy (Puzakova et al. 2015).

      1.2.3.3. The fields of spatial marketing

      Once these dilemmas have been established, the content of spatial marketing is presented according to the usual areas of marketing:

       – the buyer’s behavior (consumer in B2C, business to consumer, or business in B2B, business to business), this book focusing on the consumer;

       – marketing research concerning market studies in the broadest sense;

       – strategic marketing and marketing management.

      Introducing space in these areas involves many changes, sometimes even upheavals, because it is now a question of thinking and acting differently.

      1.2.3.3.1. The consumer’s spatial behavior

Consumer behavior can no longer be considered in the same way once space is taken into account. Too little marketing research has considered this spatial dimension in consumer behavior and this requires a revisit to geography (Golledge and Stimson 1997; Golledge 1999).

      A few articles have been able to advance knowledge in this area. Work based on reference dependence theory (Tversky and Kahneman 1991; Tversky and Simonson 1993) has led to a better understanding of consumer shopping trips (Brooks et al. 2004; Brewer 2007) (see Chapter 2).

      Older work has been carried out on the basis of gravity and/or spatial interaction models (Reilly 1931; Huff 1964; Nakanishi and Cooper 1974).

      Increased consumer mobility, their ability to use so-called mobile technologies (smartphones and tablets) and changes in retail offers, physical or virtual stores on the Internet, are accelerating ubiquitous purchasing processes. This evolution makes gravity-based models less efficient even if they are far from useless, if only in the definition of certain geofencing applications, that is, the determination of the attraction or trading area. This technique is described as an extreme form of marketing location and is increasingly used to send promotional offers in the form of coupons to consumers who are either in the store or near the point of sale using SMS on their smartphone (Mattioli and Bustillo 2012). In other words, the issue here is how far away should current or potential customers of promotional offers be alerted, on their smartphone or tablet, when they pass “near” the store or more generally on opportunities that may interest them. Chapter 5 will deal with geofencing.

      Consumers are increasingly capable of mobility without it increasing overall: retailers and traders must adapt to it (Vizard 2013). Sometimes it is quite easy. For example, a distributor near the Massachusetts-New Hampshire border found that residents of New Hampshire may not pay the vehicle taxes required in Massachusetts (Banos et al. 2015). He therefore placed an order with a company specializing in geofencing to include all potential customers in New Hampshire in his database. But this is again a gravity-type attraction (Reilly 1931; Huff 1964; Cliquet 1988).

When we want to attract customers who pass near a point of sale, otherwise known as taking advantage of the flows of the temporary attraction (Cliquet 1997a), the operation is more delicate. Indeed, how can this proximity be evaluated? This concept of proximity has become central to the thinking of major retailers, for example. For many years now, people have been wondering about the future of these “shoe boxes”, known as hypermarkets, a store format invented in France in 1963 by Carrefour and copied in many countries, including the United States in the 1990s (Europe can also sometimes be a little ahead). But hypermarkets are increasingly neglected, especially the largest ones, because they no longer meet the needs of customers seeking both purchasing power and another way of life that is less consumer-oriented. Will smartphones and geo-fencing (Streed et al. 2013) be able to save them?

      1.2.3.3.2. Spatial marketing studies

      The introduction of space in marketing studies implies taking distance into account. Just because we regularly talk about the digital economy, which no longer has a border, does not mean that there is no longer any distance or that everything has been globalized, thus eliminating any local specificity. On the contrary, we are witnessing a real resurgence of the local.

      On a more methodological level, distance is a complex variable. A distinction is made between geographical distance and temporal distance: the law of gravity of retail trade uses geographical distance when Huff’s model favors temporal distance. However, the geographical distance is difficult to manipulate. Purely metric distance is only rarely considered, especially in the behavior of out-of-store consumers. Since they travel with their vehicles, or by public transport, the temporal distance (Brunner and Mason 1968) is preferred by researchers and analysts. But it is no more satisfactory, because consumers, like all decision-makers, make their decisions not according to reality, but according to their perception of it. This can probably be partly attributed to bounded rationality (Simon 1955). Under these conditions, the perceived distance should be preferred despite methodological problems (Cliquet 1990, 1995).

      With regard to internationalization, companies are not immune to problems related to culture, among other things. The so-called Uppsala model (Johanson and Wiedersheim-Paul 1975) underlines the influence of psychological distance to explain the difficulties of export companies. This psychological distance is broken down into geographical, economic, cultural and institutional distances (see Chapter 2).

      1.2.3.3.3. Strategy and spatial marketing

Once potential targets have been identified by the spatial study of behavior, the marketing strategy can be defined. Taking the environment into account can lead to the dilemma already mentioned: local versus global. This contextualization can be troublesome, and has been for a long time, because it can lead to conflicting options that can damage the brand image. However, digital mobility tools can partly solve this dilemma by improving customer contact. This evolution implies a better consideration of the link between production and distribution, in other words, logistics. In order to solve the problem of the optimal compromise between quality and cost (and therefore price), effective coordination becomes essential, and only flawless logistics can make this possible. However, logistics also has a cost, and reducing it requires a rigorous control of space by controlling the distribution of products and therefore thanks to a good spatial distribution of sales outlets. We will see that this spatial dissemination of customer contact points implies a different way of thinking about the spatial strategies for setting up sales units, stores,