What Catchment Area Analysis Is and Why It Is Important

What Catchment Area Analysis Is and Why It Is Important

To boost their revenue, businesses must ensure that they provide top-notch services that meet the preferences of their customers. To achieve this, businesses need to have a clear understanding of consumer behavior, which can be obtained through a thorough knowledge of their origins. Conducting a catchment area analysis can help businesses gain the necessary insight to achieve this goal. In this write-up, we will delve deep into catchment area analysis, exploring its meaning, advantages, and tools that businesses can leverage to conduct the analysis.


What Is Catchment Area Analysis?

Catchment area analysis, also known as trade area analysis, is a technique that uses location data to determine where consumers come from and to find the best placement strategies to increase profits. Businesses often use this analysis to better understand their customers and boost their revenue. By visualizing location and sales data, businesses can compare themselves to their competitors and gain insights into consumer behavior.

Catchment area analysis is not limited to businesses; it is also used by governments, healthcare institutions, and other organizations. The catchment area can be identified using factors such as distance, travel time, and movement patterns. This allows us to analyze the origin of customer visits using various methods.

How does Catchment Area Analysis help businesses?

Businesses can conduct a catchment area analysis to identify the source of consumers and the level of consumer engagement in various regions around the business. This analysis also helps businesses assess market areas, store reach, surrounding competition and store accessibility. 

Moreover, catchment area analysis helps retailers determine the demographics of the store’s area, the distance consumers are willing to travel, and the price range and promotions that can encourage them to visit the store and make purchases.

Benefits of Catchment Area Analysis

A process that involves identifying business areas and examining demographic information, points of interest around the business location, and other data to understand customers better.

The analysis provides various benefits that businesses can leverage, apart from helping them understand their consumers better.

 The selection of the best location

One of the most significant benefits of this analysis is the selection of the best location. A strategic location is crucial for businesses, especially those planning to open a store or branch. To find the best location, businesses need to conduct a catchment area analysis, which yields information such as the demographic profile of potential customers, shopping behavior, purchasing power, potential competitors, and demand for products or services offered in that area. All this information can assist businesses in setting appropriate prices, inventory, and product complements.

By conducting this analysis, businesses can find the most optimal location with a high potential to attract more consumers.

 Helps in creating an in-depth business plan

Another benefit of catchment area analysis is that it helps in creating a comprehensive and in-depth business plan. The analysis provides data that can be used to estimate income accurately. Information about market size, competitors, and consumer demand in a specific area helps businesses make accurate sales forecasts. 

These estimates can be used by businesses to project income and expenses over a specific period. Thus, businesses can ensure how much capital is needed to keep the business operational.

Find key factors driving business

Finally, this analysis helps businesses identify and find key factors driving business growth, such as target audiences or competitors’ advantages. This information can be used to create marketing strategies that align with the target consumers and pricing that reflects the product or service value in the local market.

Understand Your Store’s Accessibility with Catchment Area Analysis in LOCATION Intelligence

When opening a store or branch, accessibility is a crucial factor to consider. Businesses must ensure that the location is accessible by various types of vehicles, such as motorcycles, cars, or public transportation.

To determine this, businesses can conduct catchment area analysis.

This analysis can be done easily through LOKASI  Intelligence. LOCATION is a geospatial analytics and location intelligence platform that helps businesses identify desired areas. Here, businesses will get information about store accessibility, travel time, surrounding competitors, demographics, area density, and more.

Learn more about how LOKASI Intelligence can assist businesses by contacting email: [email protected] or WhatsApp: 087779077750.


What is catchment area analysis?

An analysis that uses location data to determine the origin of consumers and optimal placement strategies to maximize profits.

Why is catchment area analysis important for businesses?

Is important for businesses because it allows businesses to identify the origin of consumers and the level of consumer interaction in various regions around the business. This analysis also helps businesses evaluate market areas, store reach, surrounding competition, and store accessibility.

What are the benefits of catchment area analysis?

Benefits of it’s analysis including selecting a strategic store or branch location, assisting in business planning, and identifying key factors driving business growth.

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