Market Area Report

User’s Guide

What is a Market Area Report?

MAR recognizes that our reports may not be the easiest products to understand. Therefore, we have created the below to help our user’s get a better idea of what our reports contain and how to use the information in them.

How to use a Market Area Report

Location of Clients

Location of Members

Location of Clients

The first page of your Market Area Report is a map that shows the location of all of the client data that has been sent to MAR in the form of a dot on a map.

When a MAR client sends their house/client data, MAR will run the addresses through a process known as geo-coding, or appending the latitude and longitude to the record. This allows MAR to plot the clients on a map, so that we can begin analyzing the data using a number of spatial processes, including the creation the market area.

MAR believes that being able to see your data visually on a map, is one of the most powerful analytical techniques that a beginning marketer can perform.

Notice the location of the members on the map on the left. One of the first things we notice is that the members are distributed in a cigar shape, and that very few of them come from the north side of the river. Imagine how powerful that information can become if we were pulling a mailing list and we decided to use a radius selection. The marketer would find that all of the prospects that were pulled north of the location would be wasting valuable marketing dollars.

Market Area

Market Area

Market Area

The Market Area is always the second page of the report. It represents where the densest part of the clients are located. As mentioned in the previous slide, notice the non-circular, cigar shape of the market area that has been define for this business.

Once MAR has defined your market area, we’ll use this information to create a series of summaries focused on the market area, so that the client can better understand the market that they serve.

The Benefits of Defining a Market Area
– Knowing the area for which to focus the marketing efforts of the business.
– Understanding which areas to avoid spending marketing dollars.
– Having a defined area to focus online marketing, including Google AdWords and social media platforms that allow for geo-fencing.
– Knowing where to distribute different media, including newspaper distribution, magazines and billboards
– Knowing exactly where to pull mailing list for direct mail

Market Area Summary

Target Market Analysis

Market Area Summary

After MAR defines the market area, we create a series of summaries, so that the client can understand some of the key metrics about the interior of the market area boundary. The below are the definitions of each variable displayed:

– Area – The area in miles of the market area boundary
– Total number of members – The number of clients sent to MAR for analysis
– Number of members in the market area – the number of members inside of the market area boundary
– Percent of members in the market area – the percent of members that MAR was able to fit by density in to the market area
– Number of area households – the total number of households inside the market area boundary
– Penetration – the count of client households divided by the total number of households in the market area
– 10 year area growth projection – a Census variable, summarized to understand the amount of household growth projected in the market area.

Market Area Summary

Market Area Summary

Market Area Summary

The market area characteristics page is the most important page in the report for understanding the demographic profile of your clients and how that profile compares to the overall market area.

Part of the market area reporting process involves doing what MAR calls a “data enhancement”. A data enhancement is when MAR uploads your client data to Experian using a secure FTP. Experian then appends known and modeled demographic variables to the client record, so that MAR can summarize and compare your clients to the overall market area. This process helps MAR understand where your business may be over/under performing when compared to the market your business serves.

The performance of your business as it relates to the market is reported as the metric known as the Index. The Index is the direct relationship between the area and the clients. An Index score of 100 indicates that the client demographic variable being analyzed, exactly mirrors the area. An Index over 100 means that there are more clients that frequent your location with that demographic characteristic than the area – also known as over-penetrating. Where as, a score under 100 means that your business is under-penetrating for that particular demographic variable. As a note, the area and member columns for a particular demographic always sum to within 1 percentage point of 100%.

Market Area Diversity

Market Area Diversity

Market Area Reports has the ability to report ethnicity if your organization sees value in knowing the racial breakdown of its clients compared to the market area.

Please see the previous page for a definition of the Index.

Thematic Maps – Median Income

Median Income

Thematic Maps – Median Income

Your Market Area Report will contain a number of thematic maps. Thematic maps are usually a single *geo-demographic variable reported, so that you can quickly and easily see  pockets of opportunity for that particular geo-demographic variable.

For Median Income, you can see that this market area tends to skew towards the lower income areas. Notice how the market area bends around the neighborhoods with higher income.

Market Area Reports can reports dozens of geo-demographic variables, but common ones include:

  • Median Income
  • Ethnicity
  • High/Low Income
  • Household Composition
  • Generation
  • Home Value
  • Owner Occupancy

*Geo-demographic is defined as the aggregation of a particular variable by the US Census for neighborhoods on the map.

Penetration

target market analysis outline

Penetration

The variable of Penetration is also reported in the thematic map format. As with the other thematic maps, its very easy to see that the business has higher penetration around the business location. We also begin to see pockets in the market area that have lower penetration. This creates areas of opportunity.

As a reminder, Penetration is defined as the number of client households in a neighborhood, divided by the total number of households.

Market Area Overlap

Target Market Analysis Report

Market Area Overlap

If your business has more than one market area that has been purchased, then MAR will report the multiple market areas on a single map, so that you can get an idea of how the market area boundaries overlap.

Market Area Overlap is important to understand when looking for new site opportunities, or when there is a concern of product cannibalization.

Market Area Overlap Summary

Target Market Analysis Sample

Market Area Overlap Summary

The Overlap Summary reports the number of clients of the location being reported, that reside in the market area of another business location.

Market Area, Targeted Marketing, Lead Generation, Direct Mail Marketing

Entering a new market, and finding a new location can be the most important element to a successful business.