Geographic segmentation is a component that competently complements a marketing strategy to target products or services on the basis of where their consumers reside. Division in terms of countries, states, regions, cities, colleges or Areas is done to understand the audience and market a product/service accordingly.
Geographic Segmentation Characteristics
People in different parts of the world, display different characteristics. A marketing strategy created by dividing the target market into segments on the basis of factors such as economics, food habits, clothing habits, languages, traditions and many other traits is known as geographic segmentation.
A classic example is – people living colder continents such as Europe are interested in warm clothing, heating devices etc., almost throughout the year, whereas, people living in hotter continents such as Australia, are interested in air conditions, beach vacations, breezy outfits and cold drinks.
Each continent or country is further divided into places with distinction in terms of culture, traditions, languages etc. and there can further be a geographical segmentation. Geographic location is an integral factor that determines market positioning and product sales. Irrespective of an organization’s market share or product success rate, it’s extremely important for them to conduct market research before launching new products/ services or introducing better or newer features.
Geographic Segmentation Examples
- Products based on season: Regions such as Canada and Russia, that are cold throughout the year, will see a huge number of warm clothing traders promoting and selling their products. They focus on targeting their products only to locations in Canada and Russia. Due to such targeted selling, it becomes easy for traders to make profits. These traders will fail to make profits if they target warmer parts of the world, such as Australia.
- Size and type of region: There are countries in Asia, such as India, where people speak different languages in different states. This is the primary reason for successful Western fast food outlets to devise new strategies to target local flavors and costs to flourish in the Indian market. A strategy designed around geography will help these outlets compete with local players and grow in a market as diverse as India.
- Food inclinations: With the change in the region, there is a drastic change in food preference as well. In the U.S., there is a constant supply of seafood across the east and west coast, which are promoted all throughout the year. In Asian countries, such as China, food habits are highly dependent on religious ceremonies. For example, the Chinese eat dumplings during the Spring festival to convey their relationship with God. Local food chains produce food by keeping these aspects in mind to make sure they do not suffer loses with the change in occasions.
- Launch products or services in new regions: Geographic segmentation is used when an organization wishes to launch a product/service in a new geographic location. For a Western burger giant to launch a new outlet in underdeveloped countries such as, Bangladesh, where most citizens are habituated to breads such as, naan, roti and not the ones that the burger giant offers, it’s crucial to understand how to establish or mold their products to suit the palate, traditions and culture of this geographic segment.
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Advantages of Geographic Segmentation
- Enhanced focus due to targeting: Geographic segmentation is an effective method to improve focus on target audience. As a division based on geographical characteristics is involved, organizations tend to create more focused marketing strategies to convert local consumers into successful customers.
- Immediate market growth: In situations where an organization has a marketing strategy for a particular location, it becomes additionally convenient for this organization to apply the same strategy to neighboring locations which demonstrate similar geographical characteristics. Expanding marketing operations and developing corresponding strategies for locations with unknown characteristics is much more time and resource consuming than expanding to locations that indicate traits similar to the existent target market.
- Improved communication: As targeting is based on geography and the traits that change with a change in geographies, marketing and promotional communications for local audience need to be according to the specialized nature of this geographical segment. Better communication happens when there’s clarity in regards to what the audience expects out of a product/service.
- Increase profits: Geographical segmentation gives an organization an essential early competitive edge in localized markets, increases brand recall value and also helps in providing better customer service which in turn leads to better customer retention rates. For organizations that have limited reach, geographic segmentation is a strategy to focus their resources on accurate target audiences and receive better revenue results.
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