The Census Bureau defines a metropolitan area as a geographic area consisting of a large population nucleus, together with adjacent communicates that have a high degree of economic and social integration with that nucleus. This definition implies a boundary around each large city that takes in most of its suburbs. Nearly eight out of ten Americans live in metropolitan areas, while over half the population lives in cities of more than 1 million, with the ten largest population centers accounting for approximately 25 percent of the total US population. However population has generally moved toward exurbia out of the central cities and even beyond the larger metropolitan statistical area. Such trends have important implications for many firms. For example, Church’s restaurant chain for many years opened its fried chicken outlets only in inner cities, primarily across the Sunbelt. according to one of its founders, the chain’s philosophy involved locating stores where there was a crying need for such an operation and where real estate was cheaper, since money was needed to build and equip the stores. While other regional and national entrepreneurs adapted to the changing environment by opening in the suburbs Church’s maintained its approach, so most of its stores are still located in the inner cities.
Although traditional US population migration patterns have followed that of people moving from the country to the city, then to the suburbs, and finally to the exurbs, there are some countertrends. For example, half of those people leaving rural areas are going to the suburbs rather than to the cities and some of those leaving the suburbs are going back to central cities. Many US cities have benefited from this gentrification movement in which young professionals are reclaiming deteriorating neighborhoods convenient to downtown.
How do suburban consumers differ from those in the cities? Family with a high level of education and generally more affluent than the others that remains in the city.
Thus, there are substantial differences in the demographic characteristics and hence in the consumer behavior patterns of suburban versus urban consumers. The marketer needs to be aware of such differences because they may affect the strategy used for a product or brand.
With population migrating to the suburbs and spilling over the relevant political boundaries (such as towns and cities) old descriptions of market areas based on such political entities have become obsolete. Consequently, the federal government now uses the concept of a metropolitan statistical area (MSA) as a geographical unit for measuring market data. An MSA is regarded as a large population nucleus that includes adjacent areas that have a high degree of economic and social integration with that population nucleus. These MSAs are classified into four levels (A, B. C and D), based on total population size. More than 350 MSAs have been identified by the US government. In addition, there are areas designated as primary metropolitan statistical areas (PMSAs) which are urbanized county clusters linked together economically and socially within MSAs of 1 million of more population. Areas designated consolidated metropolitan statistical areas (CMSAs) are composed of two or more PMSAs within the most populous MSAs. More than one third Americans live in the country’s twenty-two CMSAs.
For the marketer, metropolitan areas represent geographically concentrated target segments that hold great market potential. They are the keys to allocation of not only advertising dollars, but also federal funds. The nation’s metropolitan areas have begun to merge as suburbs of one extended into suburbs of another. Such a development gives rise to the concept of a new type of super city termed megalopolis or interurbia. This process will continue in the years ahead.
Demographic Differences between Central cities and Suburbs
1) Mostly black
2) Half of households occupied by renters
3) Total spending power half that of suburbs
4) About two thirds are nuclear families
5) Median income of $26,000, less than 30 percent have income at least $ 40,000, almost 20 percent have income under $10,000
1) Mostly white
2) Over 70 percent of households occupied by owners
3) Total spending power twice that of central cities.
4) Over three quarters are nuclear families
5) Median income of $ 35,000; over 40 percent have income at least $ 40,000, only 8 percent have income under $10,000