What Is Geographic Segmentation?
Geographic segmentation is a process of grouping customers based on where they live. Companies segment their target market geographically when needed to focus on a specific area. Geographic market segmentation tends to optimize the marketing strategies of a business by matching products and services to different regions, cities and countries where the customers live.
All of these parameters help companies to geographically target markets where specific customers or more buyers of their products are present. This provides an effective direction for marketing activities towards those areas that benefit the most.
Generally, this type of segmentation is practiced by organizations that work on a large scale. Through this form, companies offer different marketing messages to local customers and a different message to international customers based on their preferences and likings. Geographic segmentation is also an effective tool that can be used by small companies. Small businesses can target their specific customers and focus primarily on marketing their products. This also allows them to devise market strategies that will stretch both company’s budget and customer base.
In addition to this, rural and urban customer preferences towards a single product are also different. Geographic market segmentation is the right marketing strategy to use as it helps in targeting areas where more buyers of a product are located.
Examples of Geographic Segmentation
As explained earlier there are various geographic segmentation variables. Some common types of market segmentation variables used by companies to market their products are discussed with below examples.
Geographic Segmentation Regional Preferences and Needs Exists
When companies market a product by region, they must keep in the mind the regional preferences heavily in one region as compared to other regions, this type of segmentation is referred to as regional segmentation.
An example of geographic segmentation can be seen in the seafood industry. In USA, even though seafood is preferred all over the country, however, seafood is extensively marketed in the South and Southeast regions. This is due to the fact that fresh supply is available in these areas all year round, and catering to the demands of customers in these areas is easy.
Country Based Segmentation
Some companies offer products that are specifically used in some countries only, such as snow shovels are used in snowy areas only. Such products are marketed using geographic segmentation as it helps marketers to target the specific people living in that area.
For example, Dart and True Temper are companies that market their snow shovels in countries with cold temperatures and where snowfall is a normal occurrence. There is no point in marketing snow shovel in areas that are either warm or mildly cold areas with no snowfall.
Population Based Segmentation
Companies also design their marketing campaigns based on geographic segmentation making population its parameter. This can be the density of population or the population of a specific area.
Examples of products or services that use geographic market strategy include local salons that target their services and products towards the population of a specific area e.g. local population living in the vicinity. Another example of population-based segmentation includes head-covering scarves company that basically targets the population that will want a scarf, e.g. Muslim women. In western countries, such companies will target population where more Muslim women are present to buy their product.
Climate Based Segmentation
Climate-based segmentation refers to marketing products that adhere to a certain climate of an area. Examples of this kind of geographic market segmentation include swimwear brands that are targeted for hot areas with beaches and similarly, raincoats for areas that experience excessive rainfalls, etc.
More common examples of climate-based segmentation are of Walls and Igloo Ice cream companies that market their products heavily in hot areas where sales of ice creams sore high in summers.
Urban and Rural Based Segmentation
Products that serve different needs and wants of people living in rural and urban areas adopt rural and urban segmentation to convey their message to potential customers. For example, a detergent company will market its low-cost detergent product in rural areas because the purchasing power is lesser. People are more interested in products that are of high quality and of low cost.
Similarly, in urban areas, customers prefer their detergent products to be of high quality, fragrant and have other similar qualities even if they cost a bit higher than their almost equivalent low costing substitutes. Thus companies market their low-cost products towards areas with low purchasing power and their high-cost products towards areas with high purchasing power.
Geographic Segmentation Example McDonalds
McDonalds divides its market into geographic segments, for example, different countries, states, regions and cities. McDonalds sells burgers and target local markets and with customized menus. Let’s say, instead of using beef, in India McDonalds burgers are made from chicken due to religious beliefs.
McDonald's already introduced Maharaja Mac Burger (Big Mac) with no beef and pork due to Hindu Muslim population.
Similarly, in Mexico more quantichilli chili sauce is used.
Geographic Segmentation of KFC
KFC has an international presence and has a number of outlets in different countries. Keeping in view the geographic need of the customers, KFC sells it product the reach the target market worldwide.
For example, In India, KFC is fulfilling its customers demand geographically. In South India, vegetarians are the main selling products, while in North India focus Chicken products.
KFC has a wide geographic segmentation in Australia. Having more than 640 outlets and serves more than 2 million customers a week. Currently, KFC has employed 34000 Aussies.