When we travel across the world, we must have noticed that the store shelves are not only stocked with the same kind of products.
Here we will learn about geographical segmentation and its advantages. But first, let us understand what precisely geographic based marketing is.
Geographical based marketing is when a business divides its market based on geography.
There are plenty of ways that a market can be geographically segmented. Such as on the basis of city, country, state, or region.
Moreover, the market can also be divided into rural, suburban, and as well as the urban market. In short geographical based marketing is a process of grouping customers based on where they live.
Companies start to segment their target market geographically when they need to focus on a specific area.
Geographical based marketing is also a useful tool that helps small companies. Small business or growing business can target their customers specifically and focus majorly on marketing their products.
Since you will find that people living in different locations are bound to display different characteristics and at the same time have varied needs and wants, geographical location plays an integral part in determining market positioning and product sales.
This type of marketing segmentation is divided based on various geographical units, such as climate, cultural preferences, population, and more. Apart from this, it is also essential to understand why it is necessary.
Why is geographical marketing important?
It is also totally accurate that product applicability depends on the different geographic variables. But matching these products and techniques to specific locations eventually means that you are reaching more potential customers and not spending much time on the budget.
This is applicable for larger multinational businesses as it helps them to be more aware and understand location-based aspects of a specific target market. This helps them to be mindful of the various needs of the customers in different regions.
Furthermore, geographical marketing or segmentation is also ideal for small or growing businesses with limited revenue. They serve customers in the local and regional territory.
Geographical marketing or segmentation is quite easy to execute. It is easy to understand someone’s location, perhaps than to determine different behavioral tendencies.
Geographical Segmentation Parameters
Now we all know that this type of segmentation depends upon the regions or areas. Below are the various parameters.
- Country: Few companies make a product which is specific to only certain countries. Hence this helps to target customers of only particular countries.
- City: Here, companies select only specific cities to market their products or services.
- Urban/Rural: Here, certain products are offered only to the urban population, and few are rural specific.
- Climate or Weather: The companies identify the customers based on regions with similar climatic conditions. Areas such as hot, cold, humid snowfall, rainfall, etc.
- Population Density: This depends upon several people in an area or a region.
Examples of geographical based marketing
- Regional Based Marketing:
When companies start marketing their products by region, they need to keep in mind the regional preferences totally in one area, and this type of geographical marketing is known as local or regional marketing.
For example, you can see this type of marketing in the seafood industry, basically in the USA. It is true that seafood is preferred by people all over the country but broadly marketed in South and Southeast Asia.
You will get a fresh supply of seafood all-round the year in these areas, which make the catering demand of clients secure and effective.
- Country Based Marketing:
Certain companies provide products that are specially used in some countries only. These products are marketed as it helps marketers to target the specific people living in the area.
- Population-Based Marketing:
Here the marketing campaigns are designed based on population, which can be the density of people or population of a specific area.
For instance, products or services that use geographical marketing includes local salon that targets their services and products to the specific area, for example, the local population living in neighborhood or proximity.
To explain further, let’s understand with the help of another example of population-based marketing.
You must have heard about the head covering scarf industry. These types of companies mainly target the population that wears a scarf that is the Muslim community.
Moreover, in western countries, such a company will target the population where Muslim women are present in the majority.
- Climate Based Marketing:
Now let us discuss what precisely climate-based marketing is. It refers to a product that complies with the particular climate of an area.
Few examples of climate-based marketing include – specific swimwear brand that majorly targets the hot areas with beaches and resorts, whereas raincoats and umbrellas that focuses on the field that receives excessive rainfall.
Moreover, you will come across certain ice-cream companies that market their products heavily in hot areas where the sale of ice-creams and cold drinks are more in summers.
Another example is winter apparel. These companies should market their products in areas that are cold all year long. This way, these companies will generate more business and revenue.
Moreover, for example, Walmart advertises its winter products in winter months and summer gear in the summer months.
- Urban and Rural Based Marketing:
In urban and rural-based marketing, products are generally produced to serve the needs and requirements of people living in a rural and downtown area.
For instance, if we take an example of a detergent company, these types of companies will market their low-cost products in rural areas simply because the customers are less, which means that the purchasing power is comparatively less.
Here people are more interested in buying products with high quality and of low cost.
Similarly, if we take the population in urban areas, here, the clients usually prefer products with high quality even if they have to pay a bit more.
Hence, companies market their low-cost products in areas that have low purchasing power and high-cost products in those areas that have high purchasing power.
- Cultural Preferences:
These companies market culture-based preferences. Individual fast food companies and restaurants are a significant example of aesthetic preferences.
Here are some examples of cultural preferences. McDonald’s serve beer to the customers in German countries but not in the US. This portrays drinking preferences in these two cultures.
Moreover, these restaurants have included local food in their menus in a specific location. Another example is McArabia in the Middle East countries that serve banana pie in Brazil MCVeggie Salsa bean burger and a few other items in India.
- Size and Type of Region:
In India, you will find people speaking in different languages in different states. Hence, western outlets plan new strategies to target local flavors to flourish in the Indian market.
- Launching new products or services in new regions:
Geographic based marketing is used when an organization plans to launch a product or services in a new geographic location.
Starting a new burger giant outlet in underdeveloped countries such as Bangladesh, where most people are used to loaves of bread, roti, and naan.
Why is the size of the community the critical factor?
The size of the community plays an essential role in geographical segmentation. For instance, a company might produce lawnmowers to rural areas where the majority of the people have a yard. Still, to target the people living in the city, one needs to market weed trimmers or leaf blowers for manicuring lawns or sidewalks.
Hence, population density plays an essential part in deciding on transportation with rural clients who require more personal vehicles than urban dwellers.
Geographical Segmentation Characteristics
We all know that people living in different parts of the world have different characteristics. But the question is how we can build up a marketing strategy.
A marketing strategy is created by dividing the various target market into multiple segments which depends based on factors such as economics, food habits, languages, clothing factors, and others.
For instance, people living in hot climatic conditions are more keen on air conditioner beaches, summer outfits, cold drinks, and ice-cream.
Moreover, each country is further divided into places with distinction in terms of traditions, culture, languages, etc.
Location plays an integral part in determining the market position and sales. But in the end, it is essential to conduct market research before launching any new product or service even while you are introducing any new special features.
Advantages of Geographical Based Marketing
Geographically based marketing helps large companies target the various needs and wants of the customers in different regions. This method is used by both large national or international markets to understand the location-based attributes that consist of a specific target market.
Increases focus due to targeting: if you want to improve focus on a target audience, then Geographic segmentation is an effective method that will help you achieve.
The organization strives to create a more focussed marketing strategy to convert local consumers into successful potential customers.
Better and improved communication: marketing and various other communications for local audience needs should be according to the specialized nature of the geographical segment.
Communication will only take place when there is an accuracy to regard what the audience is expecting out of s service or a product.
Increase profits/revenue: Geographical based marketing gives a company a new competitive edge, especially in a localized market. It increases brand value and also helps in better customer service, which leads to better conversion rates.
If you have an organization that has limited reach, then geographical based marketing or geographical segmentation is an effective strategy that helps put more focus on resources on the right target audience and, in return, get a better profit and revenue.
- Densely populated areas can provide you with a massive market for a company to offers products or services.
- Since geographical areas are defined through climate, topography, etc. hence it becomes easier for companies to identify them and find out potential customers.
- It helps to identify customers living in a similar region who mostly have everyday needs, requirements, and wants.
- It will enable companies to concentrate their spending in a particular region, which will further enhance brand visibility efficiently.
Disadvantages Of Geographical based marketing
No doubt, geographical marketing is beneficial, but it comes with certain drawbacks as well. Let us dive into to know the cons:
- This does not peak into the buying behavior, needs, wants, and requirements of the customers as people living in the same region might have different preferences.
- The second disadvantage is that the weather keeps on changing and there have been climatic changes also. Hence just having geographical segmentation will not be an appropriate solution for marketing companies.
Geographically based marketing or geographical segmentation is easy to perform
When you compare geographical segmentation with other means of segmentation such as demographic segmentation or behavioral segmentation, then this segmentation is easy to perform and execute.
It is a lot easier to regulate in which geographical region someone lives in than it is to determine the variable element or the behavioral tendencies.
Geographical segmentation is, no doubt, one of the most effective forms of market segmentation for any brand or company looking to go global.
Not just international or national, even local brands get to benefit from geographical segmentation on a larger scale. Hence, incorporating any form of market segmentation into your marketing strategy is going to help the brand in some way or the other.
You will get to know your customers and will personalize your brand as well.
Hence, if you are creating your marketing strategy, this is something that you should take into consideration. That is why we have geographical segmentation in marketing campaigns.
It doesn’t matter whether you are coordinating with other types of segmentation or on its own, it is essential to target services or products based on where your customer resides.
If you want to make a more personalized order, then you need to know your customers better, and then there will be a higher chance of getting the desired outcome.