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Earlier this month, Hundai Motor America began displaying shiny new models of its Santa Fe sport-utility vehicle inside the Las Vegas airport. Months earlier, it mailed thousands of invitations to homeowners along specific blocks in places like Baltimore and Minneapolis offering them a chance to test-drive its sleek Sonata. Why? Because "target marketing" based on the 1990 census data pinpointed those neighborhoods and Las Vegas as locales that might be highly receptive to these particular Hyundai vehicles. Now, once again, marketers across the country are on the edge of their seats for the fresh census figures, the most definitive, detailed demographic snapshot ever produced of this growing nation. Chock full of data on the country's 281,421,906 people, the 2000 census will provide an intimate look at population swings, demographic groups, regional migrations and changing family structures. It also promises unparalleled measurement of the populations of Asian Americans, Hispanics and other ethnic groups. For the first time, respondents were allowed to classify themselves as being of more than one race; as a result, the Census Bureau will publish data on the total of 63 racial categories. A long form, sent to one in six households, asked about such diverse topics as commuting time, plumbing facilities and languages spoken at home. In short, the U.S. census is about to become an indispensable atlas for marketing departments throughout corporate America. Employing brand-new intranets and forecasting software, many companies are poised to plug in the government data and exploit the national census as never before. Coming from a bureaucratic outfit, the release of new data won't be speedy. The Census Bureau disclosed its first figures in December, sending out only the state population totals, which determine congressional representation. More detailed population data, down to census blocks of 25 to 50 households each, will start arriving next month. Much of the richest information, such as income, education and property value, as collected on the long form, won't come out until late next year. but even the early returns are tantalizing to marketers. The first batch of data showed that the total U.S. population jumped 13.2% from 1990, and revealed that some six million more Americans existed than bureau demographers had estimated just three months earlier. Nevada was the fastest-growing state, with a 66.3% growth rate; the Arizona population leapt 40% from 1990; other booming states included Colorado, Utah, Idaho and Georgia. Another juicy tidbit: A sharp rise in the U.S. Hispanic population - expected soon to become the nation's largest minority group-helped fuel Western growth. How all this translates into savvy marketing varies from company to company. Sodexho Marriott Services Inc., which provides food service to office buildings and universities, analyzed 1990 census data to create menu programs tailored to the students on a given campus. Starbucks Corp. crunches sales and census data in a complex algorithm with online software, which offers a "thumbs-up" or "thumbs-down" response to each address entered as a potential new-store site. Planners can also instantly see all the surrounding shops, other proposed locations and even competitors' sites. And Blockbuster Inc., a subsidiary of Viacom International Inc., scrutinizes area households to decide how many copies of a new romance or video game to stock in a particular store. "The census is really sort of our data gospel," says Woody Bendle, Blockbuster vice president of strategic systems. Separately, the census is a perennial hot potato for congressional redistricting, and politicians are already squabbling. The 1990 data, and the projections based on it, tended to understate the number of ethnic minorities and misplace millions of Americans. Government statisticians now believe about eight million Americans -mostly minorities living in inner cities - weren't counted in the 1990 census. Democrats are pushing for the Census Bureau to release adjusted figures based on statistical "sampling" methods, which they believe do a better job of counting those lost minority households in urban centers. Republicans want the existing numbers to stand. The president is expected to intervene next month to prevent states from using sampled numbers of redraw congressional districts. At stake: congressional boundaries and the distribution of federal funds. companies, meanwhile, will be looking to the new census to track today's most carefully watched trends and forecast tomorrow's. Many are wondering, for example, whether hordes of Baby Boomers will migrate to rural areas as they reach retirement age. A few years ago, everyone was asking about senior citizens and looking to design health-care programs and assisted-living facilities, says Jon Winslow, a marketing direction at MapInfo Crp. His company, based in Troy, N.Y., transforms census data and other information into maps so clients can plan store locations or testmarket new services. Now, he sees a lot of requests about well-to-do teenagers. "Kids in their teens are spending more money," he says. Indeed, a host of companies such as MapInfo have sprung up with the sole mission of helping to crunch and analyze census data. Claritas Inc. of San Diego, the granddaddy of census marketers, cross-references census figures with consumer surveys and its own grassroots research for everyone from Procter & Gamble Co., Dow Jones & Co. and Ford Motor Co to the local dry cleaner. Claritas then forms partnerships with so-called "list houses," which sell customer phone and address data from large databases; a client such as Hundai Motor Co., a unit of Seoul, Korea-based Hundai Corp., can then select and purchase mailing lists cross-references with specific clusters. A look at how Hundai, a distant No. 10 in the competitive U.S. auto market, has used census data shows just how these lists can help translate into actual sales for marketers. With figures in hand David Axline, Hundai's manager of database marketing, plans too recommend precisely which fast-growing towns would be prime locations for new dealerships. by cross-referencing the census information with buyer profiles, he will even known whether a lot on the north or east side of town will lure more prospects likely to buy the entry-level Accent or the more upscale Sonata. Hundai got heavily involves with census-based marketing two years ago, when it sought to target mailings to specific neighborhoods to produce more test drives. For the last two years, Hundai has used the Claritas PRIZM Lifestyle Segmentation software program, which divides Americans into 62 "clusters," or consumer types, all with catchy names. The classifications marry basic census data such as age, race and median income with lifestyle information, such as magazine and sports preferences, taken from consumer surveys. Among Hyundai's favorite targets is a cluster called "Kids & Cul-de-Sacs." They are upscale, suburban families with a median household income of $68,900 who tend to shop online, watch "The X-Files" and visity Disney theme parks. According to Claritas, such families are likely to live in areas like West Covina, Calif., and Sterling Heights, Mich. Another major target cluster: "Bohemian Mix," professionals aged 25 to 44, with a median income of $38,500, who are likely to shop at the Gap, watch "Face the Nation" and read Elle magazine. For such information, Hyundai spends about $200,000 annually. Mr. Axline knows not only what customers tend to do and buy, but through census information, he understands exactly to which neighborhoods across the nation they are likely to gravitate. Most important, the predictions have begun to pay off. In a mail campaign for the Sonata last summer, Hundai chose ZIP Codes with a high percentage of promising clusters and sent test-drive offers to those areas, instead of blanketing entire cities. Within weeks in those markets, Hundai had increased its sales as well as the number of people showing up for a test-drive. That cut in half its costs per vehicle sold, an important measure of investment returns. With this ammunition, Hyundai can use census data to dig up markets that match its most successful regions for future campaigns. It can look for areas with demographics similar to New York City, Baltimore, Columbus and Minneapolis, each of which had a very high percentage of prospects that took a Sonata for a spin. More nuance judgments can be made: using the data, Mr. Axline surmises that the older couples may be drawn to a new warranty program that offers more security. "Sometimes things pop up and make you think, where did that come from?" he says. "then you look a little deeper, and it starts to make sense." Finding out what fizzles is equally valuable. The "Urban Achiever" cluster, composed of white-collar, middle-class couples who tend to live in cities, go to rock concerts and read Gourmet magazine; seemed to be a perfect fit with the Sonata. yet they failed to show up in droves for test drives. The disappointments show that all the census data and sophisticated analysis can never exactly predict human behavior. Plenty of other factors -time of year, statistical aberrations, consumer quirks-can make expected buying patters misbehave. It was only after more than a decade of building brand recognition that Hyundai felt it could directly solicit people using census information. "We had some rough years, brand-wise, in the late '80s and early '90s." says Mr. Axline. "Hundai just got a very negative image as building a cheap car that was unreliable." Many auto-industry observers agree that Hundai has made steady gains in quality. Reviews of the 1999 Sonata, for example, found it far better than the previous model. But the company still has some distance to travel. In the J.D. power and Associates 2000 Initial Quality Survey, which measures defects reported after 90 days of car ownership, Hyundai ranked near the bottom. To track its image, the company asked Claritas to compare its popularity among different clusters in 1998 and 1999. Hundai found that its sales and test drives are growing among more affluent, better-educated groups, such as "Pools&Patios." By studying the shift, the company can adjust its advertising and marketing campaigns from year to year. "The advertising is kind of doing the air support, casting the practice in military terms. "And then the direct mail is more like the infantry, the guys going in and doing the one on one." Updated: Thursday, September 6, 2007. | ||||||||||
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