Proximity Analysis is an analytical technique used to determine the relationship between a selected point and its neighbors. Proximity analysis is a crucial tool for business marketing and site selection

Site selection

Site Selection indicates the practice of new facility location, both for business and government. Site selection involves measuring the needs of a new project against the merits of potential locations...

. Marketers analyze demographics and infrastructure to determine trade areas. Trade areas are continuous geographic areas around a site that generate the majority of revenue.

Proximity Analysis is a study using location intelligence

Location intelligence

Location Intelligence is the capacity to organize and understand complex phenomena through the use of geographic relationships inherent in all information. By combining geographic- and location-related data with other business data, organizations can gain critical insights, make better decisions...

, mapping software, to calculate the distances between customer/prospect locations, to your location(s) (retail store, bank, restaurant, dealer, or sales reps) as the first step in building an understanding of trade/sales/service area(s). An analysis typically includes a report and map showing the relationship of the data and often includes competitor locations in the analysis.