Small and medium sized businesses in the Okanagan Valley of south western British Columbia are receiving free market research from a not-for-profit organization that uses geographic information system (GIS) technology with marketing analysis tools in order to pinpoint business oprtunities.
Through the Economic Gardening initiative of the government funded Community Futures Okanagan Similkameen (CFOS), some 30 SMBs in the region will get to use the Esri Business Analyst (Canadian Edition), a GIS tool that combines market data gathering with geographic analysis. So far, 15 businesses in the organic food production and manufacturing industries have benefited from the program which will run up to March 2012.
In the past three years, the Regional District of Okanagan Similkameen had suffered economically due to the slowing down of the resource industry during the recent recession, according to Su Baker, business analyst for CFOS.
“More than 1,000 jobs were lost in the community during the recession. But through the Economic Gardening program launched in 2010, we are looking to SMBs to help jump start the economy,” she said. The Economic Gardening project provides free market research and business planning assistance to SMBs in the region.
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Traditionally, she said, large businesses are often called upon to bolster economic growth. However, studies conducted by CFOS indicate that SMBs tend to be the organizations that are most likely to start hiring people once the economy shows signs of recovery.
To provide the SMBs an edge over international competition and at least level the playing field against larger businesses, CFOS is betting on Esri Canada’s Business Analyst tool. “GIS is the key technology component of our economic gardening model.”
The tool is a tremendous advantage to SMBs, said Baker. “The technology provides businesses the ability to visualize their target markets, competition and business opportunities mapped over a specific geographic location.”
Small businesses undertaking the same tasks on their own would probably take weeks or months to come up with useful results.
For analysts in organizations such as CFOS the same work could mean spending hours searching for information on the Internet or contacting various government agencies to obtain pertinent statistics, surveys and studies.
“Business Analyst can provide us answers fast, reducing our research time from two weeks to a matter of a few minutes or hours,” she said.
Large corporations normally pay around $80,000 for such a tool, according to Baker. However, when CFOS began looking for a GIS product designed for market analysis, the group could not identify one that fit the bill. Baker said most of the tools available were either too expensive or required users to purchase other components of the systems from a different vendor.
Consultations with a U.S-based Economic Gardening outfit pointed the CFOS to the Esri Business Analyst. The American group had been successfully using the U.S. version of the tool. The CFOS liked the tool because it contained various data and features in a single comprehensive package.
The Esri Business Analyst (Canadian Edition) integrates GIS functionality in Esri’s ArcGIS technology with data from top Canadian data providers. The business data comes from Infogroup’s InfoCanada division, which contains accurate and up-to-date information on approximately 1.4 million Canadian businesses. The information is compiled from more than 300 Yellow Pages telephone directories and newer business listings from public records.
“The database provides clients with the ability to obtain non-mailable lists of businesses by trade area based on industry, employee count and sales volume,” according to Esri Canada. This sort of information is valuable in identifying potential business-to-business clients, suppliers or competitors.
The tool also contains the Canadian Directory of Shopping Centres provided by the Environics Analytics, a marketing and analytics firm, and compiled by Rogers Publishing.
Environics Analytics also provides demographic data containing more than 2,500 variables. These include data from years 2005, 2006 and 2010 as well as updates and projections for 2015 and 2020. These demographic variables are complimented by 2006 Census of Canada figures and aggregated at the provincial, census division, census subdivision, census metropolitan area, federal electoral district, postal forward sorting area and postal dissemination area levels.
Environics’ customer profiling system PRIZMC2 also provides segmentation data that classifies Canadian neighbourhoods into 66 districts markets based vital consumer behaviours such as demographics, lifestyles and values.
Finally, Canadian street map data compiled from Multinet/Dynamap Transportation provides a nationwide base map which can aid users in visualization, routing and drive time analysis. Users can also incorporate maps available through Esri’s ArcGIS Online, according to the GIS tech commpany.
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Esri said, its GIS-based tool is ideal for conducting market analysis as well as site selection and analysis research. Businesses can define trade areas and create market boundaries based on customer counts or sales figures and calculate market penetration compared to the total population.
The site selection and analysis feature can help users determine possible store locations and even square footage or gross leasable areas as well as help calculate the maximum travel time for customers driving to your business.
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One CFOS client, a home support service for the elderly, used these functionalities to map out a direct mail marketing campaign, according to Baker. A client in the food prodution industry used the map layout functionality to locate facilities to sell its products.
Another client in the wine industry that competes with foreign suppliers used Business Analysts to target customers who are environmentally conscious. Baker said the client used data from the tool to show how doing business with the client would help the customer reduce their carbon footprint compared to buying from overseas suppliers who would have to ship their products.
Structurlam Products Ltd., a Penticton, B.C.-based manufacturer of specially laminated engineered wood beams was able to significantly streamline its marketing research with the help of Esri Business Analyst.
Structulam is a mid-sized company that makes money through project-based construction, where its patented Glulam laminated beams area used, and by marketing its industrial products to other businesses, according to Stephen Tolnai, the company’s director of sales and marketing.
The company focuses on healthcare and education-related constructions, although its most recent projects include the sweeping wooden arches of the Art Gallery of Ontario’s façade and some six buildings constructed for the 2010 Olympics in Vancouver.
Market research is vital to Structulam for identifying potential business opportunities. Traditionally, Tolnai said, Structurlam does this either by using the company’s own historic data of clients that goes back over 50 years or by conducting a new market research. Both could take anywhere from weeks to months to produce useful data.
“The first is might cost less but it limits our scope to known markets. The second could have a broader scope but would take longer,” said Tolnai. “Either way, the job will cost us a lot of money and time almost equivalent to hiring another full-time employee for a year.”
Tolnai said by using GIS technology, Structurlam was able to gain a better insight to potential clients because they were able to “ask Business Analyst better questions.”
For example, Structurlam was investigating the possibility of selling its Glulam beams to manufacturers of flatbed trucks that used wood for the truck beds. “The queries were posed to the system was: who are the flatbed truck manufacturers, located in B.C. Alberta and Saskatchewan who use wooden truck beds and have an annual revenue of $900,000”.
That degree of focus would have taken Structulam weeks or months to process using their traditional methods. “CFOS, using Esri Business Analytics returned data to us in just two days,” said Tolnai.
Nestor Arellano is a Senior Writer at ITBusiness.ca. Follow him on Twitter, read his blog, and join the IT Business Facebook Page.