A new geographical pricing model within the principle of geomarketing-mix

Abstract

This article introduces a new model which aims at spatially optimizing the price of a product or service by considering supply and demand features, including their geographical location. Introducing the concept of a geomarketing-mix, factorial analysis and fuzzy clustering can be employed to automatically detect business and strategic opportunities. The method is applied to the French secondhand car market. By so doing, it is possible, first, to identify geographic areas that are typical of a certain supply and, second, to specify the optimal prices and types of vehicles for sale in these areas in view of a given marketing strategy.