What Is Geographic Segmentation in Marketing? - Definition, Advantages & Examples

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  • 0:01 What Is Geographic…
  • 0:33 Advantages of…
  • 1:22 Examples
  • 2:20 Lesson Summary
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Lesson Transcript
Instructor
Shawn Grimsley

Shawn has a masters of public administration, JD, and a BA in political science.

Expert Contributor
Jerry Allison

Jerry holds a Doctor of Business Administration and a Master’s in Mathematics. He has taught business, math, and accounting for over 25 years.

During your travels across the country, you may have noticed that store shelves are not stocked exactly the same. In this lesson, you'll learn about geographic segmentation and its advantages. A short quiz will follow.

What is Geographic Segmentation?

Geographic segmentation is when a business divides its market on the basis of geography. There are several ways that a market can be geographically segmented. You can divide your market by geographical areas, such as by city, county, state, region, (like the West Coast), country, or international region, (like Asia). You can also divide the market into rural, suburban, and urban market segments. And, you can segment a market by climate or total population in each area.

Advantages of Geographic Segmentation

So what are the advantages of geographic segmentation? Let's look at some.

  • It's an effective approach for companies with large national or international markets because different consumers in different regions have different needs, wants, and cultural characteristics that can be specifically targeted.
  • It can also be an effective approach for small businesses with limited budgets. They can focus on their defined area and not expend needless marketing dollars on approaches ill-suited for their target geographic segment.
  • It works well in different areas of population density. Consumers in an urban environment often have different needs and wants than people in suburban and rural environments. There are even cultural differences between these three areas.
  • It's relatively easy to break your market down to geographic segments.

Examples

Let's look at some examples of geographic segmentation.

A multinational clothing company divides its market geographically based upon climate between the Southern Hemisphere and the Northern Hemisphere. It will rotate its marketing efforts in the Northern Hemisphere between the seasons. However, in the Southern Hemisphere, it will focus on marketing for warm weather clothing.

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Additional Activities

Geographic Segmentation Thought Questions

Discussion Question

Consider people who live by the ocean and those who live around the mountains. What products would be used by people around the ocean that would not be used by those who live around the mountains? Why do you think this is? What products would be used by people who live around the mountains and would not be used by those who live by the ocean? Why do you think that is? How do you think a business that sells products to both regions would market its products?

Research Project

Use the Internet to research McDonald's restaurants. First, find the menu for where you live. Then find the menu for a McDonald's restaurant in Minnesota (unless you live there, then use Montana) and then a menu for a Mcdonald's in Georgia (unless you live there, then use Arizona). Are the menus the same? What differences are there? Why do you think there are differences? Now find the menus for McDonald's in Germany, India, and Japan. Are these the same as McDonald's where you live? What are the differences? Based on your findings, how do you think McDonald's advertises in each of these places? Write a report about your findings.

Research Project

Dunn Broke Cars sells cars in the United States and Europe. Use the Internet to find the types of cars in both places. Why do the countries have different types of cars? Given this knowledge, which types of cars should Dunn Broke advertise to the US market and which types of cars should Dunn Broke advertise to the European market?

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