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         Department-Level Demographic Targets
                  Age Groupings
                  Regional Groupings
                  Historical Groupings
                  Key Intersections

Department-Level Demographic Targets

People with similar cultural backgrounds, needs, and perspectives naturally gravitate toward one another, and usually choose to live in neighborhoods offering affordable advantages and compatible lifestyles. These neighborhoods can be grouped into clusters that exhibit similar demographic and behavioral characteristics, which can then be used to identify and locate marketing opportunities.

The Nation's most widely recognized and accepted neighborhood lifestyle segmentation system is PRIZM from Claritas (http://www.claritas.com). PRIZM is a market segmentation system that defines every neighborhood in the U.S. according to 62 distinct lifestyle types or clusters. Each PRIZM Cluster combines detailed demographics with product, media, and lifestyle preferences to create an accurate portrait of the people living in America's neighborhoods.

The starting point in the creation of PRIZM is the U.S. Census. The PRIZM model is recreated when the census is completed every 10 years. PRIZM cluster assignments to neighborhood geography are performed annually using the latest geographic rosters, updated demographics and behavioral data.

The primary geographic unit for demographic factor analysis and system development is the census block group, the smallest neighborhood geography consistent with statistical reliability and data availability. Block groups average 250-550 households.

Factor analysis of census data reveals several dozen demographic and lifestyle variables in six categories that explain most of the statistical variance between neighborhood types-social rank, household composition, mobility, ethnicity, urbanization and housing.

Cluster analysis of these factors produces the basic neighborhood types. These basic clusters were tested, refined, and calibrated with actual consumer purchase data. Behavioral tests and enhancements to PRIZM tapped millions of consumer purchase records from multiple sources covering auto buyers, magazine subscribers, real estate transactions, consumer credit, direct marketing response, and consumer expenditure data.

We recommend performing a thorough demographic analysis of the existing organization as a method for establishing a baseline. The core questions involve treating the inside of the organization as if it were a marketplace and asking the following questions:

• Who are my employees?
• What are they like?
• Where can I find them?
• How can I find them?
• How can I keep them?

- John Sumser © TwoColorHat. All Rights Reserved.

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