Customer Segmentation: Targeting potential customers for sales growth

Introduction

Living in the Green Lane is a three-store chain of green-lifestyle centers in the Minneapolis-St. Paul market area. Each store offers a comprehensive range of green products and services from modestly sized, strategically located retail centers, each of which exemplifies and demonstrates green-building techniques and living patterns. All three stores have been successful, and each has a large and growing Living Green Club loyalty program for its best customers.

Owners Janice Brown and Steven Bent believe that the success of the Living in the Green Lane concept in Minneapolis-St. Paul underscores the general attractiveness of the business model. They wish to continue the company's growth with a combination of penetration and expansion strategies.

The penetration strategy will focus on increasing sales of existing stores by reaching new customers in their market areas while also expanding sales to existing customers.

The expansion strategy will also focus on identifying attractive new geographic markets for Living in the Green Lane centers. This involves finding geographic concentrations of potential customers across the United States and assessing their ability to support multiple centers.

In both of these strategies, Janice and Steven plan to focus their efforts on concentrations of potential customers who match the profile of the firm's best current customers—the 1,800 members of Living Green Club loyalty programs. They have charged you, in your capacity as the firm's business geographic information system (GIS) analyst, to use existing profile data to create segmentation plans that support both the penetration and expansion strategies. That will be your task in this SpatiaLAB.

Location

Minneapolis-St. Paul core-based statistical area

Other core-based statistical areas in the United States

Seattle-Tacoma-Bellevue, Washington, core-based statistical area

Time to complete the lab

Four to six hours

Prerequisites

An understanding of the importance of customer profiling using lifestyle segmentation in the process of identifying enterprise expansion opportunities

Access to Esri Business Analyst Desktop Premium 10

Data used in this lab

Esri demographic and Tapestry Segmentation data

Market Potential Index data from GfK Mediamark Research & Intelligence, LLC (GfK MRI) GfK MRI