Standard Metropolitan Statistical Areas

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Since the mid-twentieth century, a population movement from rural to urban areas has occurred. Because many urban areas cross political boundaries, the U.S. Office of Management and Budget has defined three metropolitan statistical areas. Originally, in 1949 the standard designation was the Standard Metropolitan Area; in 1959 it was changed to Standard Metropolitan Statistical Area. In 1983 the name was changed to Metropolitan Statistical Area (MSA) and represented a city of at least 50,000 people, with a surrounding rural population. In 1990 Metropolitan Area was used to refer collectively to MSAs, Primary Metropolitan Statistical Areas (PMSAs; more than a million people with strong internal economic and social links), and Consolidated Metropolitan Statistical Areas (CMSAs). If two or more PMSAs are geographically linked, they are referred to as CMSAs.

The United States has twenty CMSAs, with New York, northern New Jersey, and Long Island being the largest. Further, the term core based statistical area (CBSA) has referred collectively to micropolitan statistical areas and MSAs since 2000. At that time, metropolitan areas were defined so that each CBSA includes at least one 10,000-inhabitant urban area; each MSA has at least one 50,000-inhabitant urbanized area; and each micropolitan statistical area has at least one 10,000- to 50,000-inhabitant urban cluster. The U.S. Census Bureau reported that 560 micropolitan statistical areas and 362 MSAs had developed in the United States, as well as 5 micropolitan statistical areas and 8 MSAs in Puerto Rico, by June 2000. 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 that interests marketing people includes: 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.

A number of examples demonstrate 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 amount of spending, specific 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. Therefore, the needs and buying habits of women must be factored into any marketing plan.

Urbanization and population mobility are two other factors that are considered in marketing plans. Because it is easier to market goods and services in highly urbanized areas, marketing plans are more effective there. Mobility provides opportunities for national advertising for regional branding. 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; in the early twenty-first century that number has almost doubledand women own more than one in four of U.S. businesses with paid employees. Marketing implications include work clothes for women, more meals eaten outside the home, and easily prepared convenience food. The list of demographic and geographic variables and their marketing implications are infinite.

Using population data, however, has limitations. They may be dated because of the time lag from collection to availability; also, census data are collected only every ten years. Some data may be too broad and, thus, hide marketing opportunities. Finally, using demographic and geographic variables, which are easily gleaned from data on MSAs, ignores two very important segmentation variables: psychographic and behavioristic variables.

see also Economic Analysis


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Mary Jean Lush

Val Hinton

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Standard Metropolitan Statistical Areas

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