Marketing is Geography

So this post has been sitting in my drafts folder for quite some time and I thought I was time to let it free from the dreaded draft existence it’s had for a while. The biggest challenge this the topic is it can go anywhere, no pun intended. With most marketing leaving the landed consumer experience, how can geography be related to marketing. The simplest way to look at it is sales and how to get a meaningful ROI from your marketing dollars – traditional and social.   Where are you selling stuff?  Where are you trying to sell?  What are the barriers to success in a given region?

Let’s face it – some patches have higher transaction rates than others and you can only effectively cover N% of the market at any given time based on resource capacity so it might not be that much of a stretch that sales execution/focus is often geographic.  Anecdotally, that’s probably why most businesses carry a geographic sales orientation, which Marketers need to be able to understand and how to best support tactical execution in focused geographies.  Another way to link geography is that Place(ment) is one of the 4 P’s of the Marketing Mix?

Geo based Business Development

So why is sales based approach a reasonable way to validate that marketing is geography? It’s the transactions – when people give you money for stuff it is a great event to look at to see if there are relationship. What do we know about transactions?

Every transaction has a location. Every business seeking transactions has access and capacity constraints which require some mechanism for the prioritization of opportunity pursuit, new to old – small to large. Since place is an inherent attribute of a transaction, an organization’s access/site and where their resources are/situation, it might make sense. Effective corporate marketing is understanding your company’s site and situation.

Businesses have place as a core attribute – a central location/site from where transactions are managed and pursued.  A business’ location typically provides for a focus on their immediate geography – less travel/cost, more likely to have a personal relationship and able to play the local card. This assertion assumes that you have an actual good to sell – software, hot sauce or widget.  This sweeping generalization doesn’t apply to an indpendant consultant type since they can travel anywhere and support any single engagement, so long as there is capacity and support from a schedule perspective.  To that end, let’s just constrain this discussion to businesses where labor bound service delivery or unused capacity isn’t reality, so the rest of this piece may not resonate with social media experts.

..so with that particular constraint in place…

As you look at the growth of a company, the majority of early revenues are geographically bounded by where you can get to in a day on a train or car, with some airplane based outliers or small phone based/online transactions.  Just a gravity model…

Gravity models are used in various social sciences to predict and describe certain behaviors that mimic gravitational interaction as described in Isaac Newton‘s law of gravity. Generally, the social science models contain some elements of mass and distance, which lends them to the metaphor of physical gravity.

F_{ij} = G * \frac{M_i * M_j}{D_{ij}}

Geographic management constructs are common place for sales and marketing folks.  Conceptual sales coverage is a key attribute for sales leaders to manage and lowering the the cost of transaction is the domain of marketing. Early stage companies traditionally focused most of the marketing locally and regionally, outside of trade rags, trade shows in Vegas or niche online communities.  Marketing’s focus can transition outside of a localized place with a single win of a national account. If you can embedd your product in a national value chain then a spatial transition takes place for marketers which allows them to abandon the more localized focus on place.

A kitschy way to look at it is you can displace place with space at the primary geo based demand focus if you have access to a significant value chain without much effort.  Space also supports traditional gravity transactional models, but the space oriented approach isn’t about the location of the business.  The concentration of customers becomes the center, not the business or product.

Starting to feel like social media is just one big gravity model.

In a space based gravity model, marketers are empowered to leverage all the assets in the portfolio – sales coverage/capacity, customers and products.  Place based marketing is more about product, price and promotion.

A maturing business

As a business exits the hyper-local stage and expands beyond a region, not all geographies are created equal despite cliche’s such as “There is no bad patch, only bad sales people”. Alas, that just isn’t true.

Certain geographies have the right industries, median household income or other attributes such as weather or infrastructure which drive the demand for a given product.   Another example, a company sells software for managing the inventory of containers for large ports, there are probably only 6 or 8 real geographic opportunities. If this company started in NYC, they would probably expand south to Newport News, Savannah or New Orleans or to west with LA or Seattle.  Not too complicated.   Even if you latch on to a huge value chain you may stay extremely regional, think retail – if you win Menard’s or Mejier you have a horribly Midwestern distribution and transaction model for the most part.  In social media or a spatial model, you might not use Facebook to sell a NASCAR beer can sculpture – myspace is probably best.

Back to Marketing

So if a business’ growth could easily be based on a gravity model, then marketers as geographers need to support the growth with a focused plan to extend the reach of a company and their products.  So you have to look at all the 4 P’s and start prioritizing investment of the marketing to support both space and place.

Boundaries for Marketing Investment

So if geography influences growth, success and viability in a market, then how do you take a regional approach and transition into marketing into larger geographies or spaces?  Customer clusters and their value chains is the easiest way to extend. Let your transactions be your marketing compass.

Overtime natural geographic clusters or affinity based spaces develop based on sales execution and/or customer communities, not unlike the initial gravity model which often creates a cluster in a region or locality where a company was founded.

I guess it just comes down to the right marketing mix in the end.  Can a coordinated social media initiative allow an organization to not only transition from place to place from a transaction perspective, but also to support space based interactions which directly engage consumers where they congregate?

So perhaps Social Media can save the world or it might just minimally allow a widget purveyor access and coverage of markets which previously could not be accomplished with a total place based geographic market focus.

So I guess this wasn’t more than observations which represent the shameless propogation of the importance of geography or social media, you pick. Feel free to substitute social media is geography as the title.

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3 Comments

  • Reply jon gatrell June 8, 2008 at 6:10 pm

    Marketing is Geography: So this post has been sitting in my drafts folder for quite some time and I tho.. http://tinyurl.com/6m39sx

  • Reply Small Business Sales Success | Capital Solutions June 15, 2008 at 5:59 pm

    […] Marketing is Geography – As a business exits the hyper-local stage and expands beyond a region, not all geographies are created equal despite cliche’s such as “There is no bad patch, only bad sales people”. Alas, that just isn’t true. … […]

  • Reply Denise Knight November 16, 2009 at 9:10 pm

    Marketing is Geography | spatially relevant http://tinyurl.com/ygz5h9a

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