In today's economy, large and small manufacturers are looking for the most efficient way to market their product while staying effective and competitive. The idea of stretching marketing dollars may be the wrong term. Instead, focusing marketing dollars in the right location can reap high rewards.
Think of it as smart marketing. Instead of blanketing the U.S. with the same campaign, marketing and product, many high-profile technology manufacturers now look to Geo-Segmentation as a solution for determining the best locations within each market to place their product, as well as the best overall markets in the U.S. to start grassroots efforts. This new method saves marketing dollars, while increasing the moment of sale by being in the right place, with the right message.
Geo-Segmentation answers many of the questions manufacturers have when initially attacking the market with a new product. One of the new trendy approaches is to create unique messages by market, depending on the demographic and lifestyle segmentation landscape.
Suppose you have just invented the technology product of the century, and now you would like to take the product to market in several geographies across the U.S. You know you want to target the audience that is technology-savvy and who keeps up on the latest and greatest in gadgets; however, beyond that, your knowledge of who to target and where to find them is very vague.
You start with a pilot effort in two large markets: Atlanta and San Francisco. According to projected Census 2010 data, the population for both of these markets, using the CBSA (Core Based Statistical Area) boundaries, is very similar: San Francisco coming in at a population of 4.3 million, and Atlanta with a population of 5.6 million. It would seem the marketing strategy for these two geographies would be very similar based on size of market alone. However, there are great differences in the demographic profile from Atlanta to San Francisco that can easily be uncovered using GIS.
Although these two markets have similar aspects, including areas of affluence and importance of higher education, the biggest difference is the "who," or lifestyle of the people who are drawn to these two markets.
The "who" is critical for understanding the right message, approach and inventory to use in a go-to-market plan. Segmentation operates under the assumption that people with similar tastes, behaviors, spending habits and lifestyles will seek others with the same taste. This critical information lends an understanding of the fundamental differences in the "who" between Atlanta and San Francisco metro areas.
In Atlanta the lifestyle group that rises to the top is "Family Portrait," gaining 22 percent of the population. For San Francisco, the lifestyle group that is most populous is "Upscale Avenues" at 29 percent of the total population.
The two groups are very different.
- "Family Portrait," the top group in Atlanta, is considered one of the fastest growing U.S. LifeMode groups. This is a family-centric group, and it shows in their purchasing behaviors and lifestyle choices. The neighborhoods are saturated with homeowners who have an ethnically diverse background. More than 30 percent of the residents are of Hispanic descent in the Atlanta market. On the weekends you find them at parks, zoos and shopping for their family.
- In San Francisco, the majority population "Upscale Avenue" group is known for their affluence and success, and they have certainly earned it with years of hard work attaining an education. Instead of single-family homes, they gravitate toward high-rise living in condos and lofts. On the weekends you find them golfing, staying physically fit by running and lifting weights, and always looking toward the next night out with friends.
Suddenly the marketing message for these two audiences is drastically different, along with product mix and attention to inventory.
A fresh approach to a retail go-to-market plan looks at and caters to the different segments by market, sending a clear message to the consumer, "We know who you are." Let's face it, shoppers are becoming savvier, requiring manufactures and retailers to do the same. Those who take their customers' lifestyle and spending habits seriously will reap the benefits of increased sales.
