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Note—Estimating Geographic Customer Densities Using Kernel Density Estimation

Naveen Donthu, Roland T. Rust

Marketing Science · 1989 · Volume 8 · Issue 2

DOI: 10.1287/mksc.8.2.191

Abstract

This paper shows how kernel density estimation may be used to estimate flexibly the geographic distribution of customers in a market. In addition it shows how a density-based product positioning methodology may be applied to site selection, using the estimated geographic customer density to help locate a new or (relocated) store or distribution center. This application provides a conceptual basis for more complicated site selection and spatial demand models which might involve several predictor variables.

Keywords

market area analysis, retailing kernel density estimation, nonparametric density estimation, site selection

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