Just to clarify, market segmentation is essentially the process of defining and grouping consumers into smaller subsets based on common attributes, like their needs, wants and motivations, for example. These carefully formed segments allow marketers to make more informed and actionable decisions, such as reaching the right person with the right content at the right time.
But don’t be fooled, there’s more to market segmentation than meets the eye. Typically, there are 4 dominant types of market segmentation that marketers will delve into. And these sets then have their own defining characteristics, specifications and goals. The type of market segmentation a brand chooses to use also depends on the function of the brand itself; the brand personality, the product, the service or the communication type.
I’ll break it down a little.
The 4 most prominent forms of market segmentation are…
In this post, we’re going to focus on geographic segmentation.
What is geographic segmentation?
Geographic segmentation fundamentally entails grouping users based on their location. Where behavioral segmentation categorizes users based on their behavior on a website or app; psychographic segmentation organizes consumers on the basis of common interests and personality traits, and demographic segmentation focuses on basic demographic information such as age, gender or income.
Geographic segmentation is put into play when a user’s location is likely to influence their communication with the brand, their buying behavior or their consumer wants and needs.
So how does geographic segmentation compare to other market segmentation types? Well, similar to demographic, geographic tends to be objective. By this I mean that it is based on facts about the individual. An example of this would be ‘User X lives in a town in Colombia, South America, which typically gathers between 50-200mm of rain per month, and has an average temperature of 20-30 degrees C.' With this information, a marketer can segment and target the individual based on their location’s climate, and decide to promote, say, lightweight raincoats or robust umbrellas. In comparison, psychographic and behavioral segmentation are much more subjective.
Geographic information about consumers can be so valuable, and even essential, to marketers aiming to target the right groups. You might be thinking… can location really have that much of an impact on how or what is marketed to a person? Well, the answer is yes. Because geographic segmentation generally encompasses 5 key areas that can be essential to market success. And that’s what we’re going to dive straight into now.
5 Aspects of Geographic Segmentation that Really Count:
With geographic segmentation, location means more than just a user’s country. It also refers to world regions, different states, counties, cities and neighbourhoods.
The good thing about geographic segmentation is that it benefits both large and small businesses. Large businesses who may have international markets will use geographic segmentation to identify and target the different needs of people in distant locations. While small businesses benefit by focusing their marketing efforts on specific areas of interest, allowing them to dodge those unnecessary expenses.
This takes into account whether the individual lives in an urban, suburban, exurban or rural area. Urban generally describes city areas, suburban is the area on the outskirts of the city, exurbs are further outside of the suburbs and rural relates to the countryside.
To demonstrate the potential differences in the needs of those consumers with different urbanicities, SurveyGizmo uses the great example of a bicycle company: Suppose this cycle company wishes to sell its products to individuals living in urban and rural areas. To do so, geographic segmentation would be their first, and potentially only, stop. Their segmentation research is likely to find that those in the urban areas prefer lightweight bikes, as the slightness of the frame, and the small tyres, allow the cyclist to be agile among traffic. Whereas rural cyclists may prefer robust, heavy-duty bikes which have thick tyres, perfect for navigating mountains and rough terrain.
Urbanicity also accounts for an area’s population density, which is significant for brands trying to decipher whether products will be in high or low demand. For example, high-density cities, like New York, are likely to have a higher demand for fast-food products compared to areas dominated by farmland. So the marketing strategies put in place for each location will be entirely different.
Climate is a big one for brands to take into account. It’s such a key aspect of geographic segmentation, as products and services that are relevant to each climate are likely to be just so different. According to the National Geographic there are, typically, 5 climate groups which are then divided into sub groups. Without further delay, here they are:
Within tropical climates, there are 3 subgroups: wet, monsoon, and both wet and dry. Tropical regions are definitely one of the most extreme of the climate groups. But if you’re in the umbrella business and you market to this climate, you’ll never be out of a job.
Mild, or temperate, climates, as the name states, offer mild-er weather. Like the typical Mediterranean climate, where the summers are hot and the winters are cold and rainy. Marketing to this climate might be slightly easier as the seasonal weather is so predictable.
Polar climates exist in areas surrounding the Arctic Ocean, Greenland and Antarctica. Places like Alert in Canada can experience temperatures of around -30°C at the height of winter, and highs, if you can call them that, of around 6° in summer. So it’s safe to say that it’s pretty cold, pretty much all of the time.
So, if you’re a clothes manufacturer or a brand selling outdoor attire, geographic segmentation in polar climates is going to be relatively straightforward. As it would be fair to assume that consumers in these parts are all quite keen to don those super-cosy coats.
Phew, glad we got that covered. As you can see, climate is quite a large factor for brands using geographic segmentation.
Cultural differences and preferences have a huge role to play in geographic segmentation. This is mostly because culture in itself isn’t simply defined by the country a person lives in. Culture can be formed or influenced by things like religion, communication, environment and agreed social behaviors and norms. Cultural preferences also tend to shape our morals, ideals and, often, overall identities.
Culture can dictate things like the activities we engage in, the music we listen to or the food we eat. Have you ever wondered why or how McDonald’s is just so successful at home and overseas? It doesn’t matter which city you go to in whichever part of the world, you’re likely to come across a McDonalds.
But if you’re expecting to get just the old classics we know and love, think again. McDonald’s is really really good at geographic segmentation and targeting. They’ve realized that not every country or culture will enjoy the same foods, so they tailor their products to suit each market that they grow into. For example, in Japan you can get a Teriyaki burger. India offers a McSpicy Paneer burger, which features the traditional Indian cheese, paneer, and in New Zealand you might be lucky enough to stumble upon the classic New Zealand Georgie Pie.
While the primary common language of the world is English, not every country is bilingual, or wants to read an ad in their second-tongue. Language, therefore, affects things like labeling, digital communication, promotional material and so on.
For a global product, it’s important to take language differences seriously, and to make sure the translation is precise and on point. To explain a little further, take this example from Colgate. In the 1960’s, the oral hygiene brand decided it wanted to expand its new product into the French market. And, with the backing of the American Dental Association, it did just that. The product that Colgate launched was called Cue. And after having already promoted the product, they then realized that the word Cue, in French, was also the name of an infamous pornographic magazine… it’s not easy to come back from that one.
Meticulous geographic segmentation and research can definitely be the difference between brand success and an embarrassing translation-blunder.
It’s all of these different aspects and considerations behind geographic segmentation that make it such an integral tool for any successful, global brand. There are a lot of advantages of incorporating geographic segmentation into a global marketing strategy. For one, it’s easy to analyze as geographic information is objective and is generally factual. It’s effective for both large and small companies and it’s essential for any brand expanding overseas or starting a chain.
It does have its drawbacks, however. Geographic segmentation is based on facts about places or individuals. But it doesn’t take into account consumer behavior, and it doesn’t account for the possibility that people who live in the same area might not actually like or want the same things.
Overall, geographic segmentation is undoubtedly one of the most effective forms of market segmentation for any brand looking to go global. Even local brands can benefit from geographic segmentation. Much like with demographic segmentation, alone it can seem quite clinical; objective with no insight into the personalities of consumers, but when paired with the likes of behavioral or psychographic segmentation, the possibilities are endless.
Essentially, incorporating any form of market segmentation into your marketing strategy is going to benefit the brand in some way. The better you know your consumers, and the more personalized offer you can provide, the greater chance your brand has of seeing success, and achieving those sought-after actionable insights that will put you ahead of your competitors, and skyrocket you to success.
If you're new to the world of Market Segmentation, or just need a quick refresher, then get started with this free guide: The ABCs of Market Segmentation: A Beginner's Guide. 💌 Don't hesitate to get in touch with me directly via firstname.lastname@example.org with any of your questions or comments you may have!