Standard Metropolitan Statistical Areas
Over the last half-century, there has been a population movement from rural to urban areas. Because many urban areas cross political boundaries, the Office of Management and Budget has defined three metropolitan statistical areas. A Metropolitan Statistical Area (MSA) is a city of at least fifty thousand people with a surrounding rural population. A Primary Metropolitan Statistical Area (PMSA) is an area of more than a million people with internal and social links. If two or more PMSAs are geographically linked, they are referred to as Consolidated Metropolitan Statistical Areas (CMSA). There are twenty CMSAs in the United States, with New York, northern New Jersey, and Long Island being the largest. This trend toward urbanization has implications for marketing.
In highly industrialized countries, the growth of population has slowed, forcing marketers to adopt segment or target marketing. Segment marketing requires the marketer to break the total market into smaller segments by using certain variables: demographic, geographic, psychographic, and behavioristic.
Demographic variables are objective population characteristics that are easily collected and readily available in the United States. The information marketing people are interested in includes the following: age, gender, race, income, education, occupation, and family size. Demographic variables and geographic variables (such as size, region, and climate) are also important in selecting a market segment.
There are a number of examples of how marketers use some of these demographic variables. In the United States, age is an important variable for market segmentation. For example, since teenagers control a certain spending, certain products are marketed directly to them. The same is true of senior citizens, who constitute a growing segment of the American population.
Gender is another demographic variable. In industrialized countries where people are living longer, women generally outnumber men. The needs and buying habits of women must be factored into any marketing program.
Urbanization and population mobility are two other factors that are considered in marketing programs. Because it is easier to market goods and services in highly urbanized areas, marketing programs are more effective there. Mobility provides opportunities for national advertising for regional brands. For example, some products sold in the northeastern United States have done well in south Florida because many Northeasterners have migrated to Florida
Other variables that affect market segmentation are occupation and education. In 1960 approximately 30 percent of women were working outside the home; today that number has almost doubled. Marketing implications include work clothes for women, more eating out, and easily prepared convenience food. The list of demo-graphic and geographic variables and their marketing implications can go on and on.
However, there are limitations to the use of population data. They may be dated because of the time lag from collecting it to its becoming available; also, census data is collected only every ten years. Some data (for instance, race) may be too broad and thus hide marketing opportunities; for example, the increase in the number of educated and upper-middle-class blacks would suggest a market not normally implied by using data on race. Finally, the use of demographic and geographic variables, which are easily gleaned from data on Metropolitan Statistical Areas, ignores two very important segmentation variables: psychographic and behavioristic variables.
Bibliography
Evans, Joel R., and Berman, Barry. (1994). Marketing, 6th ed. New York: Macmillan.
"Metropolitan Areas." Archived at: http://www.calmis.cahwnet.gov.
"Metropolitan Areas." Archived at:http://www.ntis.gov.fcpc.
Pride, William M., and Ferrell D. C. (1993). Marketing. 8th ed. Boston: Houghton Mifflin.
[Article by: MARY JEAN LUSH; VAL HINTON]
