COMM 150: REVISED ASSIGNMENTS FOR FRIDAY AND NEXT WEEK - 'Boomtown Singles' in 'Mayberry-ville'? Demographic typologies and Springfield

FOR FRIDAY: Read this post and the pages I have linked below: (1) the Marketing Research Association webpage; and (2) the USA Today story on market segmentation research; and (3) the Claritas page on market segmentation profiles. FOR NEXT WEEK: Read Chapter ___ on media and government and Chapter ___ on globalization in Vivian. Be ready to take a pop quiz on either or both.

Extra credit "Quiz" in class Friday because attendance was so low: For extra credit (115,000 points), answer the following question:
What demographic would you reach by advertising in Teen Vogue magazine?

Half the money I spend on advertising is wasted; the trouble is I don't know which half. - Attributed to John Wanamaker

Wanamaker (1838 - 1922) founded the big downtown department store (named Wanamaker's, what else?) in Philadelphia. He is considered one of the fathers of retail advertising. Market research can be considered as a grab bag of techniques that advertisers use to try to answer Wanamaker's question.

But there's more to it than that. The Marketing Research Association defines it like this:

Marketing research functions in two ways. It identifies key characteristics and attributes of a product or service through individual interviews or group discussions (qualitative research) and it analyzes these attributes by statistical analysis of answers given in a structured set of questions such as a survey or questionnaire (quantitative research). The specific research problem determines whether to employ one or both modes.

Adds the MRA:

WHY do research?
Research has always played a crucial role in the products, programs, social service programs, and laws that affect our daily lives that we all use. Companies are very responsive to what they learn from research and products are changed to meet the needs of the American public.

HOW is research executed?
Marketing researchers adhere to a systematic and objective process to identify problems, collect and analyze appropriate data and present conclusions. Researchers belonging to professional organizations adhere to guidelines such as MRA's Code of Marketing Research Standards and Bylaws, which governs acceptable interview practices and all members must abide by the Code. MRA members will never ask leading questions or try to sell products or services to respondents.

So the telephone surveys that politicians rely on are one of the techniques used in market research, but not the only one.

A key component of market research is demographics - the statistical profile of a population by age, gender, income, ethnicity and other criteria. We looked at demographics earlier, in connection with radio formats. Now we're going to put the pieces together and see why advertisers - not just on radio - use demographics.

A 2003 story headlined "Old labels just don't stick in 21st century" in USA Today clearly explains the background:

For businesses of all kinds, detailed information about potential customers is pure gold. Why send direct mail to households not likely to buy certain products or services? Why advertise in newspapers that go to thousands of households when the goal is to reach only families that have kids under 12? Why should a Lexus dealership blanket thousands of households in a ZIP code with fliers if only a hundred are likely to buy luxury cars?

"What retailers are doing now is microretailing their stores specifically to the demographics," says Patrick Dunne, marketing and retailing professor at Texas Tech University in Lubbock. Retailers use the information to determine what merchandise to put in their stores — a rural Wal-Mart, for example, may have more shovels in its aisles than a suburban Wal-Mart.

What would you expect to see in the aisles in Springfield's Wal-Marts?

One company that has a way of finding out is Claritas Corp. of San Diego. A subsidiary of the Nielsen firm that measures TV audiences, Claritas builds its business model on the idea that "birds of a feather flock together" ... by zip code. It segments the general public into 67 demographic categories and cross-tabs them by where they live, using U.S. Census data. From this statistical analysis it creates model personality types - or typologies - with clever names that reflect consumer behavior. For example, here's the "Mayberry-ville" typology:

Like the old Andy Griffith Show set in a quaint picturesque berg, Mayberry-ville harks back to an old-fashioned way of life. In these small towns, upper-middle-class couples like to fish and hunt during the day, and stay home and watch TV at night. With lucrative blue-collar jobs and moderately priced housing, residents use their discretionary cash to purchase boats, campers, motorcycles, and pickup trucks.

Anybody like that in central Illinois? (At least before the current recession.)

Let's see how it works by visiting Claritas' website and seeing what its typologies can tell us about Springfield.

(And what Springfield can tell us about Claritas' methodology.)

Claritas has a PRIZM zip code lookup page – named for one of its models for comparing demographic data. Be ready to ccmpare the Zip codes in Springfield in terms of income, diversity, age, and other demographics:

• 62701
• 62702
• 62703
• 62704
• 62707
• 62711
• 62712

And any other Zip code you want to look up. What are the advantages of slicing and dicing people into categories like "Middleburg Managers" and "Suburban Pioneers?" Any disadvantages?

After you've looked around a little, we'll start with the north end, since we're in that part of town right now. Let's go back to "ZIP Code Look-Up" and enter 62702 (plus the security code below). You'll get five "PRIZM-NE" categories, starting with "American Classics," i.e. older, downscale adults. When you finish, return to the look-up page by clicking on the "Back" arrow (unless you enjoy reading "Warning: Page has Expired" error messages). Ask yourself: Does this sound like north-enders? Read the other categories. Same question. Look at the map on the lookup page. How much of the 62702 zip code area would north enders consider to be in the north end? What other neighborhoods can you identify? What are their demographics like?

Here are a couple of other questions. Compare notes in small groups (you can group up informally with the people sitting nearest you - or across the room if that's how you want to do it). Compare notes. Discuss. Post your answers as comments to this blog post, and be sure to include all of your names on the post so all of you get credit.

• Look up some of Springfield's other zip codes -- 62701, 62703, 62704 and 62707. What neighborhoods are included in each? Do any of the zip codes include neighborhoods of different income levels and/or ethnicity? How do their demographics vary (for example in 62703 and 62707)? Would you want to break down that zip code by smaller divisions like census block or street?
  
  
• How well do Claritas' categories fit people in the neighborhoods you're familiar with? What, if anything, are the marketers leaving out? What do they emphasize?
  
  
• How useful, in general, do you think demographic segmentation is in analyzing a smaller metro area like Springfield? How much of it can you trust? What would you want to be suspicious of? What else would you want to know? What other kinds of information could you gather?