Page 159 - Foundations of Marketing

126 Part 2 | Marketing Research and Target Markets

Climate affects numerous
markets. Customers’ needs for
automotive accessories, such
as tires, vary based on climate.

AP Images/PRNewsFoto/Michelin

be found in towns where other large retailers stay away. If a marketer chooses to divide by a
geographic variable, such as by city size, the U.S. Census Bureau provides reporting on popu-
lation and demographics that can be of considerable assistance to marketers.
Market density refers to the number of potential customers within a unit of land area,
such as a square mile. Although market density relates generally to population density, the
correlation is not exact. For example, in two different geographic markets of approximately
equal size and population, market density for offi ce supplies would be much higher in an area
containing a large number of business customers, such as a city downtown, than in another
area that is largely residential, such as a suburb. Market density may be a useful segmentation
variable for fi rms because low-density markets often require different sales, advertising, and
distribution activities than do high-density markets.
Marketers may also use geodemographic segmentation. Geodemographic segmentation
clusters people by zip codes or neighborhood units based on lifestyle and demographic
information. Targeting this way can be effective because people often choose to live in an area
that shares their basic lifestyle and political beliefs. Information companies such as Donnelley
Marketing Information Services and Claritas provide geodemographic data services called
Prospect Zone and PRIZM, respectively. PRIZM, for example, classifi es zip code areas into
market density The number 66 different cluster types, based on demographic information of residents.
11
of potential customers within a Geodemographic segmentation allows marketers to engage in micromarketing.
unit of land area
Micromarketing involves focusing precise marketing efforts on very small geographic mar-
geodemographic kets, such as communities and even individual neighborhoods. Providers of fi nancial and
segmentation A method of health-care services, retailers, and consumer product companies use micromarketing. Many
market segmentation that retailers use micromarketing to determine the merchandise mix for individual stores. Increas-
clusters people in zip code
areas and smaller neighborhood ingly, fi rms can engage in micromarketing in online retailing, given the Internet’s ability to
units based on lifestyle and target precise interest groups. Unlike traditional micromarketing, online micromarketing is
demographic information not limited by geography. The wealth of consumer information available online allows mar-
keters to appeal effi ciently and effectively to very specifi c consumer niches.
micromarketing An approach
to market segmentation in Climate is commonly used as a geographic segmentation variable because of its broad
which organizations focus impact on people’s behavior and product needs. Product markets affected by climate include
precise marketing efforts on air-conditioning and heating equipment, fi replace accessories, clothing, gardening equipment,
very small geographic markets recreational products, and building materials.

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