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Using Geography & Consumer Data for Marketing Research

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  • 0:03 Finding Customers
  • 1:16 GIS and Marketing Research
  • 2:06 Help from the Government
  • 2:27 Commercial GIS Providers
  • 3:01 Lesson Summary
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Lesson Transcript
Instructor: David Whitsett

David has taught computer applications, computer fundamentals, computer networking, and marketing at the college level. He has a MBA in marketing.

Can market researchers make predictions about your interests and shopping behavior based on where you live? In this lesson, we'll examine how researchers use consumer and geographic data to look for useful trends.

Finding Customers

Look at your key chain - how many frequent shopper cards are you carrying around? Do you know why you're encouraged to scan your card every time you make a purchase? Because you're providing a constant stream of data to the world of marketing researchers. When you scan your card, you've told someone what you've bought, what time of day you bought it, and where you bought it. All of that data is stitched together to help build a huge pool of information that can be mined for useful nuggets.

Take that information and combine it with mapping software and you have the heart of a geographic information system (or GIS), which combines spatial data (where people live) with attributes like age, race, gender, and income level. Researchers use GIS as a tool for spatial analysis, which looks at human behavior and attempts to explain things using mathematics and geometry. Companies use GIS as a tool for visualizing data.

Why is where you live important to marketers? Studies over the last 20 years have shown that an individual's or a business's location is an important predictor of characteristics. You can also use this type of information to make predictions about the kinds of economic activity that will occur over time in a particular area.

GIS and Marketing Research

So how is GIS used in marketing research?

Well, it can help you look at potential business locations. If you're looking to buy a fast food franchise, you can use a GIS to determine if there are similar locations nearby, and you can check the demographics of the area population to make sure that they are your type of customer. Businesses can also use GIS for locating a warehouse based on favorable delivery routes.

You can also use GIS to look for areas to see where the most or least of something is (quantities) or where certain attributes are concentrated (densities). Again, this is a good tool for deciding on where to open a new business or offer a particular service. You can also map economic activity (for example growth or change) within an area over time to look for patterns that may favor or hurt your business.

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