To improve targeting and marketing efforts, a tactic such as customer segmentation can be employed. While there are several different types of target audience segmentation, geographic segmentation is often overlooked. Still, its prevalence in modern business and marketing methodology speaks for itself.
To properly apply a geographic segmentation strategy, you will need to become familiar with the ins and outs of the term first.
Let’s take a look at why geographic segmentation is so important, how we define geographic segmentation, and what segmentation strategies you can utilize for your business.
What Is Geographic Segmentation?
Geographic segmentation is the practice of classifying or grouping your clients according to their geographic location.
This process of categorizing customers may be done according to the country where they live, or smaller geographical units such as regions, cities, and even specific areas within them.
The main aim of geographic segmentation is to seek out specific buyer personas and be able to accurately target them with the appropriate messages.
For instance, people who live nearby in certain areas of the world are more likely to share similar traits and can be segmented into one group. Therefore, business and marketing experts can focus on specific regions and adapt to others.
This definition highlights the value of geographic segmentation when it comes to marketing efforts. Knowing when and how to communicate with your target audience is one of the most important parts of any marketing strategy.
Key Takeaways
Geographic segmentation is the division of a target market into different segments. Thus marketers can start the development of targeted messages for a specific segment that might be the most profitable;
People who inhabit similar geographic locations are more likely to have similar values, desires, and cultural backgrounds, making marketing efforts more effective when tailored to those segments;
Climate-based segmentation takes the tendencies of the weather in a specific area into consideration when developing a marketing strategy.
How to Define Geographic Segmentation?
Geographic segmentation is a tactic often used in marketing to target goods or services to customers who reside in or frequent a specific area. It operates under the assumption that locals have similar demands, desires, and cultural backgrounds.
Geographic segmentation is one of four main types of customer segmentation, along with demographic, psychographic, and behavioral segmentation. While it is sometimes overshadowed by the likes of demographic segmentation, it remains an important part of many marketing plans.
Thanks to the similarities that locals share, marketing managers can develop promotional materials and improve messaging to suit the customer profile of a specific area.
Diverse geographical factors frequently affect the relevancy of a product and the effectiveness of marketing. By matching those goods and marketing tactics to certain areas, you can reach more relevant customers while saving valuable time and funds.
Why Is Geographic Segmentation Important?
Any ambitious marketing effort would do well to include an effective geographic segmentation strategy.
While the advantages this type of segmentation brings are manifold, one of its most prominent benefits is its impact on targeting.
1. Enhanced marketing precision and efficiency
Geographic segmentation allows businesses to target specific areas, tailoring marketing messages to reflect local consumer preferences and cultural nuances.
This precision not only makes marketing campaigns more relevant and compelling but also improves resource allocation, ensuring that efforts and budgets are focused where they can achieve the maximum impact.
2. Increased customer engagement and satisfaction
By addressing the specific needs and preferences of a regional audience, businesses can enhance customer engagement.
This approach leads to more effective promotions and product offerings that resonate well with the local market, boosting customer satisfaction and loyalty.
It fosters a deeper connection between the brand and its customers, making marketing strategies more effective in driving customer actions.
3. Competitive edge and improved profitability
Geographic segmentation provides businesses with a competitive advantage by allowing them to establish a strong presence in selected markets.
This targeted approach helps businesses stand out in crowded markets, adapt quickly to local market trends, and effectively counteract competitors’ moves.
As a result, businesses not only enhance their brand’s reputation but also see an increase in profitability due to higher conversion rates and sales in these strategically chosen regions.
Geographic vs Demographic Segmentation
While geographic and demographic segmentation are closely related and often employed together, they divide the target audience into categories based on different criteria.
Demographic segmentation analyzes data such as the age of customers, gender, level of education, and income. On the other hand, geographic segmentation categorizes customers based on their physical location, such as a country or region.
Both types of data are highly relevant and valuable when improving marketing messages and creating tailored materials to share with the target market.
Here is a comprehensive overview of geographic vs demographic segmentation:
| Aspect | Geographic Segmentation | Demographic Segmentation |
|---|---|---|
| Definition | Dividing a market based on location. | Dividing a market based on population characteristics. |
| Criteria Used | Location (country, state, city, region), climate, population density, language. | Age, gender, income, education, occupation, marital status, ethnicity. |
| Examples of Segmentation | Targeting customers in urban vs. rural areas, marketing differently based on climate zones. | Creating campaigns for different age groups, tailoring products for specific income levels. |
| Marketing Applications | Localized advertising, region-specific promotions, climate-appropriate products. | Personalized marketing, targeted advertising based on life stage or economic status. |
| Advantages | Helps in addressing regional needs and preferences, effective for location-specific businesses. | Allows for precise targeting based on measurable traits, enhances personalization. |
| Challenges | May require multiple localized campaigns, can be complex with diverse regions. | Requires accurate demographic data, potential privacy concerns with data collection. |
Top Strategies for Effective Geographic Segmentation
Within geographic segmentation, several strategies are often used to provide deeper insights into a company’s target audience and improve marketing.
The best type of geographic segmentation will greatly depend on the region you are focusing on and the specifics of your product or service. Consider applying some of the following types to your marketing strategy.
1. Population-based
Companies may frequently analyze the factors that are closely related to geographic location.
This includes population density, and other population-related characteristics such as the beliefs of a certain customer segment, all of which can serve as valuable data for marketing.
2. Climate-based
Another common factor that is closely related to geographic location is the specific climate of a region. The term climate-based segmentation refers to the marketing of goods that fit a specific region’s environment, which is why clothing brands may opt to focus more on swimwear in hotter regions and more on waterproof clothing in rainy parts of the world.
3. Urban and rural
Naturally, both product development and marketing of said products will be different for urban and rural areas.
Customers from urban and rural regions may have completely different priorities when it comes to the same product, which is why this type of segmentation is so valuable.
4. Cultural
Cultural segmentation involves tailoring marketing strategies to align with the cultural practices and values of different regions.
This can include varying advertising campaigns during local festivals, holidays, or significant cultural events, as well as aligning product offerings with local tastes and preferences.
This strategy helps build a deeper connection with the audience by respecting and reflecting their cultural context in the brand’s messaging and offerings.
5. Economic
This strategy examines the economic conditions of different geographic areas, allowing companies to adjust their pricing, product features, and marketing messages according to the purchasing power and economic stability of the target market.
For instance, businesses can introduce segmented pricing where they will adjust the prices based on the tier the market belongs to. This approach ensures that marketing efforts are economically appropriate and more likely to result in sales.
Additional Tips & Tricks
- Effective market segmentation is not only about identifying the different needs of the customer segment in question. This is also helpful while developing and applying the marketing strategy for that market segment;
- Cultural preferences affect a market more than it may seem at first. It may be wise to identify key cultural elements that are important in a certain market in order to avoid making a potentially expensive error down the line;
- Different groups will always make up the customer base of a company. More precise market segmentation can reveal useful characteristics to leverage in your marketing strategies.
The Bottom Line
Geographic segmentation is a way of categorizing the target market into segments based on the geographic location where customers work and live. The common characteristics of the consumers found in a specific market are highly useful in the development of marketing strategies.
Today you’ve learned what geographic segmentation is, why it is important, strategies for geographic segmentation and you’ve got a few tips & tricks. Taking all this knowledge into consideration you are ready to determine whether geographic segmentation is the approach you need for your company or organization.
Geographic Segmentation FAQs
There are many ways that brands can use geographic market segmentation to adapt to the circumstances of the local market. One typical example is the food that restaurants offer in specific regions. On islands, seafood is a staple food choice to market and sell, while in landlocked countries other choices may appeal to consumers better.
There are many different types of market segmentation besides the ones mentioned in this article. However, when compared to the main types of market segmentation, geographic segmentation may have one key advantage – it is much easier to determine a consumer’s location than to obtain other types of data.
Simply put, yes, geographic segmentation is very cost-effective. It eliminates wasting money on advertising to uninterested market segments, and by targeting the correct part of a market it ensures greater profitability.
Cities have higher population densities than suburban or rural locations. That is why businesses that offer tangible products may be able to distribute their goods to more customers at a lesser cost. Opting to market to residents of cities as opposed to suburban or rural areas is good for businesses whose distribution system is centered in those areas.
