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Where You Live Gives Marketers Clues to Buying Habits

A powerful demographic marketing tool called consumer segmentation is proving more and more that...You Are Where You Live.

December 15, 1996|KIRSTEN M. LAGATREE | SPECIAL TO THE TIMES; Lagatree is a freelance writer in Falls Church, Va. She is the author of the book "Feng Shui: Arranging Your Home to Change Your Life" (Villard, 1996)

If you've got a wedge of brie in the refrigerator, an Infiniti in the driveway and a country club membership to your name, chances are that come Sunday morning, you'll be watching "Face the Nation." You may also be thumbing through your latest issues of Inc., Travel and Leisure magazines.

You may well live in one of the upscale suburbs of Los Angeles. You're a member of a group known as the Winners' Circle.

Or maybe you have a sports utility vehicle in the garage and a home gym in the next room. You watch "Murphy Brown" and follow the Wimbledon tennis matches. You read Time magazine, listen to all-news and adult contemporary radio stations during rush hour, go snow skiing and do most of your entertaining at home.

You probably live in a suburban neighborhood along the California coast. You are dubbed a Mid-Life Success.

If either of these "lifestyle profiles" sounds familiar, you may be wondering how somebody found out so much about you. Welcome to the world of consumer segmentation, where every questionnaire you answer, every magazine you subscribe to, every warranty card you fill out and many of the purchases you make add another piece to the picture of who you are, based on what you buy.

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And it doesn't stop there. Chances are that your neighbors frequent the same restaurants you do, stock their pantries with the same brands of cereal, take similar vacations and tune in to the same television programs. Your address reveals a fair amount about who you are and how you spend your money.

In other words, you are where you live.

As those who keep track of this data for a living like to put it, "birds of a feather flock together." Indeed, that adage is at the core of some very sophisticated marketing data that both reflect and influence the way we live.

Collecting and analyzing the data--and crafting the colorful nicknames that tag each lifestyle--is the $100-million-a-year business known as consumer segmentation.

David Tedrow is director of consumer segmentation for Equifax National Decision Systems in San Diego, which, together with Claritas, based in Arlington, Va., enjoys 90% of the industry's market.

Tedrow said that when his family moved to San Diego from the East Coast, his neighborhood didn't really change.

"The architecture, size of the lots and so forth might be different in the new neighborhood," he said, "but the choices were still based on the quality and location of schools, how close were we to Home Depot, things like that."

Mike Mancini, a senior vice president for competitor Claritas, agrees. "People tend to move into neighborhoods with people similar to themselves. Young marrieds want suburbs, good schools, affordability. Young singles look for hip neighborhoods in more urban areas."

Because of these basic truths, Equifax, Claritas and a couple of their smaller competitors are able to describe and predict the lifestyles of you, your neighbors, your Kansas City cousins and your old college chums in San Francisco. Virtually anyone with a ZIP Code can be typed by the huge and complex system.

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Here's how it works:

Claritas with its Prizm method and Equifax with its Microvision system begin by analyzing demographic data from the 1990 Census. Each adds information gleaned from Nielson ratings, Arbitrons, consumer product and opinion surveys, product warranty cards, magazine subscriptions and dozens of other public and private information sources.

What emerges is a portrait of our society broken down by what are often called "tribes." Your tribe is your household plus those who share your ZIP Code (usually 2,500 to 7,500 households). For more pinpoint marketing, the segments can be broken into smaller geographic levels like census block (250 to 500 households) or ZIP Code plus 4 (from five to 12 households).

Members of your tribe will tend to have similar lifestyles and buying patterns, and each tribe is given a distinctive name.

At Claritas, you'd fall into one of 62 colorful designations like Money and Brains, Norma Rae-Ville, American Dreams, Kids and Cul de Sacs or possibly Shotguns and Pickups.

Equifax aims to keep the nicknames slightly more conservative. Still, you could find yourself tagged with any of its 50 lifestyle designations, including Bedrock America, Movers and Shakers, Urban Singles, White Picket Fence or Stars and Stripes.

All of this fascinates journalist and marketing analyst Michael J. Weiss, who has written extensively about Claritas and its clusters (his latest book is "Latitudes and Attitudes," Little Brown, 1994).

In fact, Weiss maintains, "Today you can see the country not as 50 states but as 62 distinct lifestyle types." These methods of typing, he said, "are very helpful for explaining how diverse we have become in this country. . . . [These] kinds of clusters, with names like Greenbelt Families and Big Fish-Small Pond, are a lot more reflective than just saying, 'Oh, I live out in the suburbs.' "

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