Geographic Segmentation is the grouping prospective customers by postal code, city, country, radius around a certain location, climate or whether they are in an urban or rural environment. The principle behind it is that people in the same location are likely to have similar needs, wants and cultures.
You might wish to group your customers by:
- Location (postal code, area, state, city, country etc)
- Time zones
- Language
- Climates and seasons
- Population type and density
Three use cases for Geographical Segmentation
- Local/Delivery lines – One of the most obvious use cases for Geographical segmentation is where a business has different units or is restricted by geography. If you were a Pizza restaurant in South London, it would be no use advertising in North London for example. Geographical segmentation is very easy to implement and can quickly help with targeting. If you were an automotive manufacturer, you might target rural areas when selling 4X4 cars and urban areas when selling compact cars for example.
- Cultural differences – Different regions have distinct cultural differences, language and rituals. Some are more obvious than others. In the west, the colour white typically symbolises purity, cleanliness maybe even peace where in the east it symbolises bad luck, mourning and death. Despite many of these being fairly easy to research, brands have still made some fairly big blunders when advertising abroad. By adopting colloquialisms can help endear a brand to a particular region.
- Pricing – It’s easy to overlap geographical information with earnings data in order to better understand potential pricing. There is generally a trend where people who live in cities and suburbs have more spending power than those in rural areas, but it’s important to think of supply/demand as well. Those in rural areas may pay a higher price for groceries if there’s only a few major shops as an example.
Pros
There are plenty of practical reasons why you would segment by geography. This could be legislative, where your product/service can only be sold in one area and not another. It could also related to shipping, so as to understand the furthest distance your product could be shipped without incurring additional costs. Climate may demand that you modify your offering, for example air conditioners would be sold in hot countries but could be modified to space heaters for cold ones. Language differences are another obvious reason you would need to change your approach. Geographic data is vert easy to obtain and can easily be applied to most of your existing software/systems, and so it would be counter-intuitive not to use this lens when targeting potential customers.
Cons
Whilst there are still many practical reasons why you would segment by geography, whenever we are thinking about cultural differences , its very easy to get sucked into stereotypes and generalisations. It may be easy for us to consider India to be a ‘hot’ country but of course there are a variety of climates at play within. While the world is becoming increasingly digital, geography may have less and less impact on the way that services need to be delivered and where potential customers are found. Audiences have become accustomed to influences from different cultures, with content delivered in different languages and so geography may not have the impact it once did.
