Imagine yourself driving in a large city you've never been in before without a map. You could stop at every nearest gas station and ask for verbal directions to reach your intended destination. Chances are, however, you'll reach that destination later than you would had you seen and studied a map.
For many people, maps are an indispensable instrument. Without them, many of us are literally lost. Their value lies not only in enabling us to get from one place to another but in their visual aid. Being able to see something pictorially makes it easier to understand than getting that same information verbally or even written down in words or numbers.
For many businesses, government and educational institutions, maps of a similar nature have become an indispensable research tool. By aiding in decision-making, they help accomplish business objectives. These are statistical or data-oriented maps which can be generated in-house by use of a desk-top computer. This relatively new technology is known as microcomputer mapping.
Microcomputer maps are overlaid with data geographically presented by state, county or zip code. By assembling the desired data on a computer screen, the newly created map can be studied, modified at will and then with a simple hookup to an output device, reproduced on paper or transparency to make a convincing presentation.
The capabilities of this technology assist market researchers and sales and management personnel in tracking sales performance, analyzing market trends, market share and in forming market campaigns. The maps also help in designing sales territories and in selecting new office or retail sites.
To be able to see all of this information in a visual display is just one advantage of microcomputer mapping. It also offers simplicity, speed and low cost map generating capabilities.
Previous options
Prior to the 1980s, computer-generated mapping was tedious and expensive. The ability to produce maps reflecting demographic or other specific data was limiting. One option, which was usually not feasible for the average business owner, was using very expensive software running on minor main frame computers. The large computers, however, required sophisticated and expensive programming and turn-around time could be affected by the firm's data processing department which may have had other priorities.
Another option was to use mapping service bureaus. These provided extensive capabilities but were also very costly, time-consuming and provided slow turnaround. Additionally, users had to state in advance which variables should be used, thus limiting the ability to experiment and develop alternative plans.
A third alternative was to do it by hand. This meant coloring in the spaces, creating multi-colored overlays or placing dots in appropriate areas. The drawback to this technique was that it was also time-consuming and didn't allow for experimentation.
Since the introduction of the microcomputer, mapping is becoming increasingly popular. In fact, the mapping software and services market is estimated at $3540 million per year. By 1990, the overall market is predicted to double in size with microcomputer mapping packages and related data files accounting for more than half of total revenues.
Research tools
Producing thematic maps require a few basic ingredients: a computer with graphics capabilities; an output device (i.e., a monitor, printer or plotter); a data file; a boundary file and mapping software.
Computer: Although micro-computer mapping programs are available for most popular microcomputers, mapping software is most readily available for the IBM-PC, IBM-PC compatibles and certain Apple computers. Microcomputer mapping programs are graphics oriented, therefore, the computer must possess graphics capabilities. These capabilities are a graphics card and display monitor. Color capabilities are available and enhance presentation.
Output device: To obtain "hard copy" maps, a pen plotter, laser printer or other similar output device is necessary.
Colorful, high resolution maps of professional quality can be achieved by a pen plotter. A laser printer provides high resolution capability but uses patterns instead of colors for differing areas. Less detailed, black and white maps with lower resolution than pen plotters can be achieved by using dot matrix printers.
Boundary files: Mapping software uses a boundary file to draw geographical components such as city limits and state and county borders that compose a map. The boundaries of these features are stored in a boundary file as a series of x-y or latitude-longitude points. Mapping software draws the map boundaries by connecting these points together.
Microcomputer mapping software vendors supply hundreds of different kinds of boundary files. Examples are those by zip code, streets, county, state, Designated Marketing Areas (DMAs), and Area Microcomputer Mapping of Dominant Influence (ADIs).
Boundary files can also be created with a digitizing tablet, an electronic pad with moveable hand cursor. Digitizing tablets are compatible with most microcomputers and allows the creation of boundary files for practically any area.
Data files: Data files and boundary files work hand-in-hand. While boundary files contain boundaries for a group of features, the data files contain statistical data for these features. A data file consists of any data with a geographic element such as population, income and retail sales. A state population density data file, for instance, might contain information that shows the number of residents per square mile for each state. Another data file may show the average income per household per county in a particular state, or the number of single heads of households per county in that state.
Data files can be purchased from government agencies and data companies in the private sector provide many specialized data files.
Creating and loading your own data files by using business software programs is also feasible. That capability illustrates one of the advantages of the mapping software available on the market.
Data files generated by spreadsheets and data base management packages are compatible with many of the microcomputer mapping programs available. This means that data specific to a certain business, for example, from a customer profile, can be plugged directly into the mapping program. This is information in addition to that which is available from the federal government or data companies.
Mapping software: The last basic ingredient needed to create maps is mapping software. This is used to merge the corresponding boundary and data files. Mapping software uses the boundary file to draw the boundaries of the map, then uses the data file to display data on the map.
Data can be displayed on a map in many ways. The most common method is by color shading the map based on its corresponding data value. Another way is using dots in a dot density map.
Mapping software's merging capability is one reason why this tool is so popular. This capability allows the user to get a clear picture of business trends. A marketer, for example, can pinpoint target markets using one or several demographic variables, add on a display of current market penetration and then interrelate the current level of penetration with the market's potential. This illustration of data permits a quantifiable assessment of performance vs. potential. Additionally, marketers have the capability to evaluate the allocation of limited resources by overlaying many conditions within a single geographic area.
Mapping uses
Mapping is most commonly used in six basic functional areas: site location analysis; target market studies; trade area analysis; sales performance monitoring and sales territory sign; government resource planning and market research data display.
A business which wishes to evaluate its sales efforts, for example, can find out if its sales force has been allocated effectively, whether a particular advertising campaign or promotion improved product demand, if a low growth area is being overly emphasized or a high growth area is being ignored.
Others who can benefit by using microcomputer mapping are:
Retailers: Mapping software helps analyze trade areas of existing stores. These maps show how far customers travel to shop, the influence of competitive locations, how much customers spend by zip code area and where new outlets should be located.
Direct-mail advertisers: Mapping assists in target marketing. By combining demographic variables with selected boundaries, mapping can pinpoint the location of prime prospective customers.
Banking industry
One field in which microcomputer mapping is becoming very popular is banking. Fred Koehl, assistant vice president of First National Bank of Atlanta, says his bank's software, provided by a nationally-known microcomputer program supplier, has aided his firm in analyzing site location for branches, Automated Teller Machines (ATMs) and in evaluating existing banking facilities. The system also enables the firm to study distributional aspects such as their customer base in a certain area, identifying product sales by geography, and population and employment growth potential in a particular region.
Another bank which utilizes microcomputer mapping is Barclay's Bank of California in San Francisco. According to Brent Raines, market research manager at the financial concern, "We geocode our customers by census tract, meaning, we look at them according to household density and income in relation to our branches and stratify this information through the supplier's software program."
Continues Raines, "This market driven program provides a very accurate picture of our market area. We can see what's happening in relation to the rest of the industry and target market specific products."
The program also helps the company make decisions regarding branch consolidations, bringing branches up to profitable levels and acquisitions of other banks and branches.
Yet another user of mapping is American Savings & Loan Assn. in Sherman Oaks, Calif. The financial institution has 156 branches throughout California and uses mapping to find out what is happening in the market area around each branch and adjacent areas.
"Mapping allows us to see where the high potential areas lie," says Cindy Gutterman, research analyst at AS&L. This was partially beneficial a few years ago when the sales division began a telemarketing program to introduce a new service. Area branches were plotted on a map and then overlaid with demographic data.
Says Gutterman, "This outlined areas around the branches that the sales people should concentrate on."
Mapping has also assisted AS&L to evaluate whether or not ATMs are strategically located. This is done by plotting the number of cardholders in a particular area and using those figures to decide whether to install additional ATMs and to evaluate currently existing ones.
Gutterman says mapping provides great flexibility and variance in what kind of data the user wants to generate. The main benefit is that the data produced is easy to interpret. That's especially beneficial for those in other departments who are not skilled in that area.
"Mapping is a visual presentation of the same information we can obtain on a computer printout," explains Gutterman. "Mapping allows us to pass the information on to other departments and they don't have to spend a lot of time trying to interpret the relation of various data."
Raines says mapping allows a user to bring in a lot of his own data. Based on the objectives of your organization, this enables you to get very sophisticated and analytical.
Being able to produce that data pictorially is a real advantage for their employees.
"We can provide a wealth of information which has been portrayed pictorially to our branch managers who may not be familiar with this software program. We are able to tie and package together analytical data a branch manager may not know about in his own market area and define demographics and customer households. The branch manager is then able to bring all this packaged information together and use it to buy mailing lists of non-customers in that particular area or for direct mail campaigns."
Continues Raines, "The bottom line is that we're using a tool and people to help make more efficient use of our marketing money, marketing information and to make better marketing decisions. That's what we're all about."
Koehl also thinks mapping has been a very beneficial research tool for his financial institution. It has simplified and saved time in their ability to apply visual perspective to the firm's data.
"Mapping has allowed us to be able to do things that we couldn't do before just because it was laborious and time consuming to do by hand," says Koehl. "This meant that sometimes we didn't do it at all."
Mapping has also allowed them to realize the "what if" possibilities, says Koehl.
"The program's capabilities gives us the opportunity to experiment, for example, 'What if I put this number here...' The results we can generate would have taken much longer had we done it manually."
Koehl warns potential microcomputer mapping users that it is not a complete package in and of itself. Mapping is an enhancement to the analytical and communication process.
"Mapping is not a panacea. It doesn't solve all of your problems. It's a tool which supplements other work we do. The quality of the communication is more effective in transmitting information internally to a wider audience, much better than a computer or graphic artist could do. But mapping is cost efficient and easy to use. It's just a nice tool to have around.
ARTICLE SIDEBAR
Barclays Group of Banks is a global financial institution with over 5,000 offices in 84 countries. In 1983, worldwide assets totaled $92 billion and pre-tax profits for 1983 were $807 million. Barclays Bank of California, a 100%-owned subsidiary of the Barclays Group, was established in 1965 and in 1981, had assets of $1.5 billion. It provides a complete banking service to individuals and companies through domestic offices focused in the San Francisco Bay area, Santa Barbara, Los Angeles and Orange County and two international offices located in San Francisco and Los Angeles. Barclay's subsidiaries include Barclays Bank International, Barclays Bank of New York and Barclays American. In total, Barclays four North American operating subsidiaries have 502 offices covering 37 states with combined assets in excess of $13 billion.
Financial Corporation of America is a savings and loan holding company. Its principal operating subsidiary is American Savings & Loan Assn., a California-based financial institution. American Savings' business consists primarily of attracting funds in the form of deposits from retail and institutional sources, borrowing from a variety of sources and making loans secured by deeds of trust on residential and income producing real estate. In 1986, AS&L had assets of $34.1 billion. The firm presently operates through 156 branch offices and 21 loan offices in California and currently has 5,600 employees.