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Geographic Segmentation

A video explaining in more detail the process and purpose of geographic segmentation.
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The global marketplace has opened up an array of opportunities for commercial organizations, but this also means that levels of competition are more intense than ever. Even large organizations need to concentrate on those parts of the wider market that they can hope to penetrate with their value propositions. If they spread themselves too thin, then their prospects of aligning their products and services with the needs and expectations of buyers in the marketplace are greatly diminished. There is no single way to divide up or segment a market. Their geographic segmentation is one of the most tried and tested means by which this can be achieved. Let’s take a closer look.
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The era of mass marketing is dead and market propositions need to be carefully targeted. A scattergun approach to marketing makes little sense and runs the risk that the organization will spread itself too thin and fail to capture the imagination of customers. The need for targeted marketing becomes more pronounced as competition in many markets increases and as financial departments put the squeeze on their marketing colleagues to ensure that they can deliver tangible and measurable returns. One of the basic ways in which marketers can segment the market, that’s divide it up into smaller components, is by dividing markets into geographically defined units, which might include countries, cities, or even smaller areas.
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By looking in depth at the geographic attributes of a particular market, decision-makers can focus much more narrowly on the needs and wants a particular consumer groups who they would like to meet. Large accompanies, one can think of Coca-Cola or McDonald’s, may be inclined to consider countries or groups of countries as individual markets that may call for customized marketing and business development plans. Geographic variables may look not only at the region in question, but may also consider population sizes within these areas, population densities within these catchments, and also perhaps the specific climates affecting groups of potential consumers. For organizations that operate across national frontiers, segmenting marketing efforts according to geographical boundaries is frequently an indispensable first step in the segmentation process.
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A value proposition that could work well in France will need to be reconsidered for the German market where there are linguistic differences and perhaps relevant cultural factors to consider as well. At the regional level, a simple yet somewhat crude attempt to segment the market by location may work well where there are well defined variations between specific areas. Massive levels of inequality are an unfortunate fact of life in many big cities around the world. Marketers need to target those specific urban communities that can afford to buy the goods and services on offer.
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As a basic means of segmentation, however, a geographic approach is unlikely in and of itself to offer a narrowly focused enough foundation upon which to build an effective target market strategy. Geographic considerations often need to be combined with other types of segmentation variables in order to help decision makers proceed with confidence. Now let’s summarize. A geographic approach to segmentation is a useful way for marketers to break big markets down into smaller groups that they would like to target. Segmenting by geography is often essential because there are cultural and other environmental differences across national frontiers and even within discrete national boundaries.
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The approach can be effective for smaller businesses which may not have the required level of resources to operate in many areas. However, a geographic approach to segmentation is by itself often insufficient in defining viable target markets. Now, here are the five key points. One, a geographic approach to segmentation is a useful way for marketers to break big markets down into smaller groups that they would like to target. Two, segmenting by geography is often an essential part of the process. Three, the approach can be effective for smaller businesses which may not have the required level of resources to operate in many areas. Four, a geographic approach to segmentation is by itself often insufficient in defining viable target markets.
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Five, marketers can look at geographic considerations in conjunction with other variables.

Now, let us summarise the key points of geographic segmentation:

  1. Geographic segmentation is a useful way for marketers to break down big markets into smaller groups they would like to target.

  2. Segmenting by geography is often the first phase of the process.

  3. The approach is essential for smaller businesses, which do not have the required level of resources to target large markets.

  4. Geographic segmentation by itself is not sufficient for the identification of viable target markets.

  5. Marketers should look at geographic segmentation together with other methods and approaches to segmentation.

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Strategic Marketing: Segmentation, Targeting, Positioning

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