Introduction and the Research Problem
Alan R. Andreasen proposed a study titled “Geographic Mobility and Market Segmentation,” published in the Journal of Marketing Research in 1966.
The study highlights the value of geographic mobility as a dimension for consumer market segmentation. Besides, the author discusses a tentative theory related to geographic mobility and shows evidence about the purchasing power of customers for specific products and services. In addition, the study suggests the likely scenarios that can make customers switch from a particular brand, product, or store due to geographic aspects.
Further, the author discusses that market segmentation has advanced through the years but to improve marketing efficiency and its effectiveness, it is essential to segment buyers according to knowledge, attitudes, and behavior towards a specific product. At the same time, it is crucial to consider geographic, economic, social, and personal variables. However, various studies have grouped according to geographic, social, and personal variables and changing status over time. Moreover, these variables have been treated only in the present status. The measurement of change has been performed based on the occupational and social class mobility and family life changes, respectively. In contrast, marketers have readily accepted geographic location or residence as the most crucial factor in determining consumer attitudes and behavior, but these factors have not yet received theoretical attention. Therefore, the primary aim of the research is to identify whether geographical mobility has an impact on the profitable dimensions in customer market segmentation.
Research Problem Solution
First, the author explores the general dimensions of geographic mobility in an economy from which the population’s characteristics like mobile geographical segment are studied. In addition, the author revealed that about 20 percent of the population change residences every year. Next, the study discovers the number of people moving within the same country and other countries. Finally, the author pinpoints the additional elements like the age of the population that is moving to these locations to attain generalized information on movers.
From these findings, the author suggests that the information on non-movers and the mobile population combined with the youth factor (18 to 34 years of age) of the population can be a critical component for market segmentation of the products. In addition, the study explored a hypothesis that demonstrates the long-distance mover groups are significantly superior to the non-mover group in terms of spending power, the potential for future increase in their spending power, purchasing behavior, and the future changes in their purchasing patterns (see Figure 1).
Figure.1 Different Variable for Market Segmentation
The study also sheds light on a tentative theory for geographic mobility that focuses on whether mobility is determined by opportunities presented by the environment or it is a mere subjective willingness to change location. In this context, the author explored three criteria, namely (1) very few have the opportunity for changing location in their life irrespective of job necessities, marital status, or other personal reasons; (2) fewer population have the opportunity to more than once in the lifetime; (3) and lesser percentage of the population will be subjectively willing to change the location to a new community despite the given opportunity. Therefore, the author suggests that geographic mobility in long-distance is relatively unique and helps understand customer attitudes and behavior. However, the study claims that the two components of opportunity and willingness to move theory must be explored before testing the hypothesis.
- Opportunity to move: The study claims that the opportunity to move is mainly related to internal or external factors that lead to individuals seeking opportunities to move. The external factors include new or present job opportunities, including the military. In addition, these individuals or heads of the household may be classified with attributes like proven managerial capabilities, potential managerial competence, technical and intellectual skills, moral claims on management, or hold influential positions in large global organizations. From such considerations, it can be identified that most long-distance movers are individuals that hold managerial or technical occupations with higher than average educational backgrounds and income scales. Similarly, internal sources of long distances are confined to the physical and financial capabilities of the individuals. Therefore, these capabilities can be categorized as dissatisfied individuals due to present employment locations or other social reasons. In addition, these individuals have an attraction to other communities, such as the labor market standards, favorable climate for retirement preferences, and possible nearness in terms of location to friends and relatives. Finally, these individuals may also be motivated by scholastic ambitions. Thus, these individuals can be classified as movers with higher positions, higher education, and income with a solid preference for moving their asset positions.
- Willingness to move: When considering the factor of “willingness to move,” the author emphasizes that is moving causes a significant impact on individuals’ lifestyles. As such, these changes also determine the common purchasing patterns and behavior. However, there are risks associated with willingness to change the household as these people are wary of new friends in a new community or the difficulty of finding a new home that is adequate to the requirements. Therefore, individuals who understand these factors and are ready to undertake the risks are willing to move. Similarly, the willingness to move is directly proportional to the extended risks involved in their relocation decision.Further, the author suggests that these risks comprise the magnitude of the change in a particular household due to the relocation, such as geographical region changes, city type and size, occupation and income, social status, marital status, family size, and more. At the same time, the uncertainty and lack of information in deciding to relocate to a new location are critical factors for consideration. Furthermore, the extent of depth in connection with the old society must be integrated into the analysis and the strong motivation behind an individual’s decision to move. Finally, it is essential to determine the nature of help the individual received from relatives and friends, and the extent of help that may be available in a new community determines the social and psychological aspects of a decision.
Therefore, the willingness to move component provides critical information. For instance, geographic mobility involves individuals willing to move to long distances but look for a similar community. Next, the geographic relocation does not instantly change the occupation, income, and household status during the move. Furthermore, these individuals possess are well-informed about the new community before their decision, and such individuals have experience in long-distance mobility In addition, these individuals are highly motivated by a potential opportunity to improve their income and occupation, and they move as per their social status aspirations.
Moreover, other characteristics include minimal involvement socially and professionally within the previous communities of residence. However, the author emphasizes that these individuals have private sources to aid them when moving to a new community. On the other hand, the study reveals that most individuals that are willing to relocate comprise a significant percentage of youth; therefore, they are prepared to take risks of moving as they are more adventurous or want to recover from previous failures (see Figure 2).
Figure.2 Mobility Status According to Age, Sex, Color in 1960 by US Bureau of the Census
Findings of the Research
The findings from the research outlined the tentative theory about various determinants of long-term geographic relocation and mobility. In addition, the hypotheses suggest that the household and individual characteristics are critical components when long-distance mobility decisions are undertaken. Besides, the study conducted a study on Philadelphia data of long-distance movers to examine the characteristics and test the hypotheses. This examination presented various factors that could contribute to general market segmentation. For instance, it was identified that the major exception was witnessed in the form of social factors that determines the long-distance mobility decisions.
In addition, the study summarizes the answer to the primary research question on whether long-distance geographic relocation offers unique market segmentation opportunities. The findings presented below highlight critical areas that can result in appropriate and accurate customer segmentation:
- Relatively younger population in the early stages of their family cycle.
- Well-educated individuals.
- Higher status and occupation.
- The income is above the average income scale.
- These individuals are part of the higher social classes.
- Socially active individuals with higher social class aspirations.
- These individuals have experiences of geographical relocation.
- Decisions to move are inspired by higher income.
The author suggests that these findings offer significant evidence that the individuals willing to relocate to long-distance locations represent a quality market segment compared to other populations or groups. In addition, the high purchasing power because of higher education and occupation ensures that these customers are likely to have increased purchasing power in the future. Therefore, such customer segments provide unique opportunities for any goods and services. As a result, these segments can be considered profitable customers who offer tremendous value as they can afford more expensive, durable, or non-durable goods and have preferences for sophisticated leisure services. To conclude, the author pinpoints that geographic mobility can act as an effective index, but it is essential to understand that the geographic mobility may differ from household to household as each may represent a different group. Nevertheless, the group of customers actively part of the geographic mobility segments represent unique market opportunities for superior furniture markets, clothing, slipcovers, durable consumer items like electronics and automobiles, and more.
Future Work Suggestions and Implications for Practitioners
The study also offers a pathway for future practitioners as the author highlights that the active geographic mobility groups may have high purchasing behavior and preferences, but they are likely to switch brands because of their relocation decisions. Therefore, these groups are highly likely to migrate from known brands to an environment of potential unknown brands. For this reason, it is necessary to expect constant brand and store switching as the preferred brand may be absent in a new community. On the other hand, as these movers are migrating to different geographical regions; therefore, the purchasing patterns differ as a particular product that is appropriate in one location may not be feasible in another. Similarly, the purchasing patterns may differ when these individuals change occupational and social status. In this case, the changes will occur to upgrade their purchasing behavior. Therefore, future studies can focus upon avenues to target such customer groups with the help of information and communication-based approach using newspapers and other forms of information to highlight the characteristics of a brand and product as per the community preferences.
Furthermore, the mobility factor in marketing strategies can be implemented by focusing on measuring positions in a lifestyle and the changes occurring over time. Besides, marketers should design their market segmentation policies by considering geographic mobility as an alternative approach. Finally, it is essential to consider pricing, products, channels, and the promotional strategies that are explicitly targeted at long-distance mobility groups, emphasizing the products and service requirements of these customers, including the vulnerability they present to the brand due to constant switching.