GIS AND MARKETING RESEARCH 1

Implementation of GIS in

Marketing Research Companies

Jena Happ

Saint Mary's University of Minnesota

MK411

Dr. Valluri

May 4, 2012

GIS AND MARKETING RESEARCH 2

Implementation of GIS in Marketing Research Companies

What is GIS?

Geographic Information Systems (GIS) are extremely useful for a wide

variety of industries. Each industry applies its own unique application to answer

their specific spatial problem. GIS is important to market researchers because it

allows companies to predict and calculate future issues that may arise. Over the last

twenty years, GIS has become one of the most influential tools available to

companies.

GIS consists of a software program in which a GIS analyst plots tabular data,

and analyzes the results. GIS uses a computer software program – ESRI’s “ArcGIS” -

that allows you to display tabular data (aka excel documents) on specific locations

on the earth. Accompanied with tabular data is attribute information prudent to the

specific company. For example, when plotting every Wal-Mart store location, each

point will have a unique table associated to it; these tables have information such as

addresses, the amount of sales for each store, and the number of employees in it.

When we analyze the results, we take each point and compare their unique values to

one another.

There are endless possibilities of applications when using GIS. GIS can be

used for emergency planners, criminal justice prevention, natural resource

management, business management, historians, city parcels, and any other subject

imaginable. Consequently, any individual, or company, can use GIS in a productive

manner.

GIS AND MARKETING RESEARCH 3

An example of an application for natural resource management would

include damage analysis of Hurricane Katrina on the Gulf Coast. In an article written

by Wendy Zhang, a GIS analyst obtained and plotted disaster data along the

Louisiana coast in 2005 and assessed the areas with the most damage (Zhang &

Beaubouef, 2008). This is useful in visually recognizing which areas were hit

hardest and assess how much monetary support each area needed. An analyst could

also plot the rebuilding progress of this area in 2012 and use the two maps to assess

the success of reconstruction.

A very common way to use GIS as an application deals with city management.

Interpolating a city’s census data into a map is useful in planning city zones, tracts,

voting blocks, and land use parcels. An article written by Robert Amsterdam details

how analysts have used GIS to display census blocks of lower Manhattan, as well as

displaying census tracts (Amsterdam, Andresen, & Lipton, 1972). Although this

article is old, it is still very relevant to today’s use of GIS. There have been many

times I have displayed this sort of information for a project.

One last example of a GIS application deals with emergency planning. David

Shelly describes how GIS is being used to improve the timeliness of disaster relief

efforts in his article (Shelly, Dunlop, Marchany, & Sforza, 2010). He describes

integrating alert system data and location data into one system, instead of having

each dataset separate from one another. This is important because it allows

emergency management to respond quicker to disaster areas since they can visually

see both location and alert data in one application.

Since GIS can be integrated in into any company, city, or establishment, the

GIS AND MARKETING RESEARCH 4

possibilities for applications are endless. GIS allows any individual or company to

visualize future plans and prevent predictable issues.

How can GIS be used in marketing research?

There are many ways GIS can be used in marketing research. Not only can

GIS map current and future customers, it can also help forecast potential marketing

areas. GIS performs a wide variety of applications. Overall this is useful, but there

are relatively few business applications. While creating a few business maps myself,

I found I was limited in what I could analyze. In the end, GIS is expanding its

business extensions and is still very useful in marketing.

It is easy to plot all sorts of marketing data in GIS. First, an analyst can

interpolate census data (Zhao, 2000). Since census data is the most important data

source to marketers, plotting different fields from the census can be important in

determining the target market area. Each field - such as age, household income,

race, sex, etc, - can be geocoded, or displayed, as its own separate data point.

After each point is created, an analyst can perform calculations in which each

point is given a set value. For example, marketers may target men over the age of 21

for their specific campaign. When performing a calculation, the analyst will need to

create a unique formula in ArcGIS that will display this information (Ebert, 2012).

The resultant will display locations of where only men over the age of 21 live. This

is useful to marketers because visualizing areas they can target will help them know

whether or not they should target the particular area.

A very common way to use GIS in marketing is to locate areas where new

customers can come from. To do this, an analyst would first need to display existing

GIS AND MARKETING RESEARCH 5

customers’ address locations (Sliwinski, 2002). By using a database with customers’

addresses, an analyst is able to display where customers live onto a map. Then the

analyst could perform a few different types of analyses in which they calculate

distance from a customers address to their potential store site.

Another way marketers could use GIS is by displaying surveyed information.

ESRI’s Business Analyst Extension includes all types of survey questions that range

from questions like “do you own a TV” to “how many hours of TV do you watch in a

week.” The Business Analyst gives this information by zip code; as a result, we can

display the surveyed answers into points and visually display the standard of living

in a particular town.

The Business Analyst also provides information such as firm sales and

employee’s, that is classified by the NAIC’s classification system. After learning the

importance of NAICs to marketers by grouping firms into sectors, I found the data

given by Business Analyst to be very important. This information allows marketers

to visually understand the differences between sectors based upon different

attributes the GIS analyst wants to research.

There are many ways in which I can incorporate marketing research into GIS.

In a journal written by Ronald Hessa, he describes how GIS can be used to “map

trade areas and cluster customers together for advertising purposes” (Hessa,

Rubinb, & West Jr., 2004). Since a company generates most of its sales in the trade

area, mapping these areas will be useful in determining the amount of customers a

company has, the addresses of these customers, and the location of potential

customers. This will allow marketers to visualize whether or not there is any

GIS AND MARKETING RESEARCH 6

overlap or holes in marketing analysis with another company. Not only can you use

GIS to determine whether or not your company will compete with another company

in the trade area, GIS can also use existing store location characteristics to map

where a new store site would be most successful.

The past semester, I created a map that displays the possible locations for a

new Target store in the state of Minnesota. After downloading unemployment rates,

general merchandise sales (based on NAICs classification), household income,

disposable income, and population density data from the Business Analyst, I had to

create certain parameters while calculating my potential outcome.

I subjectively cut off each of the five previously stated attributes at a sensible

figure. For instance, when calculating my formula, I stated I wanted to display only

areas where the entire population had more than $44,000 worth of disposable

income. I set each of the five attributes to parameters I felt were still “valuable.” See

Appendix I for a map of the results I found. Although my answer was skewed and

biased - as I cut off the attribute figures wherever I wanted - this is a very good

example of the type of analysis GIS analysts can do for marketers. Marketers would

be able to determine whether or not a potential store location they previously

deemed “suitable,” would work by simply looking at a map like this.

GIS can be implemented into any marketing research company. By using

data obtain by NAICs, GIS analysts can perform multiple tools to obtain the desired

results; such results would include locations of future customers, the company’s

trade area, or plot potential store locations. GIS is becoming increasingly common

and will surely benefit market researchers in their future business ventures.

GIS AND MARKETING RESEARCH 7

References

Amsterdam, R., Andresen, E., & Lipton, H. (1972). Geographic information systems in

the U.S.—An overview. Spring Joint Computer Conference , 511 - 522.

Ebert, J. (2012). Raster Calculations. Saint Mary's University of Minnestoa, Resouce

Analysis, Winona.

Hessa, R., Rubinb, R., & West Jr., L. A. (2004). Geographic information systems as a

marketing information system technology. Decision Support Systems , 197 -

212.

Shelly, D., Dunlop, M., Marchany, R., & Sforza, P. (2010). Using Geographic

Information Systems for Enhanced Network Security Visualization.

Washington D.C.: ACM.

Sliwinski, A. (2002). Spatial Point Pattern Analysis for Targeting Prospective New

Customers: Bringing GIS Functionality into Direct Marketing. Journal of

Geographic Information and Decision Analysis , 6 (1), 31 - 48.

Zhang, W., & Beaubouef, T. (2008). Geographic Information Systems: Real World

Applications for Computer Science. ACM SIGCSE Bulletin , 40 (2), 124 - 127.

Zhao, L. (2000). Retrieved April 18, 2012, from GeoComputation:

http://www.geocomputation.org/2000/GC053/Gc053.htm

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Appendix I.