It is not possible to construct one set of universal criteria for all target groups. The reference market should be divided into separate segments having a common denominator. One of the criteria is market division into geographic units, i.e. countries, regions, cities, or districts. Owing to such segmentation, marketing activities can be even more effective, while advertising message customised.
Geographic segmentation vs territorial marketing
Geographic segmentation not only divides the market into geographic units, but also allows to distinguish recipients based on features of the area where they live. These include above all the climate, population density, and area characteristics (urban, suburban, rural). Advertising activities may be carried out in one or several geographic areas. In the latter case, however, local recipient preferences must be taken into account. The market distribution is of particular importance if a given company wants to introduce a new product or service to the local market. Then it is necessary to know the needs and expectations of the consumers concerned.
Geographic segmentation can also be used for local business promotion. It has to do with territorial marketing, but the notions are not the same. Place marketing is used, among others, by regions, cities, voivodships; however, in this case borders may be blurred. Promotional activities can be targeted both at residents and local enterprises, but also at tourists, new entrepreneurs, or residents. Simply put, territorial marketing assumes both meeting internal and external needs of the groups, striving for economic development.
User segmentation criteria
The market division into separate territorial units is aimed at understanding the needs of recipients and matching relevant advertising messages. People in different parts of the world show various characteristics, have different habits, food preferences, or traditions. When grouping users, it is also worth considering climatic conditions. In some regions, consumption is shaped strictly by the climate – in Eastern Europe, where for most of the year there are not many hot days, the greatest demand will be for warm clothes or heating devices. An example of a successful RTM (Real Time Marketing) campaign is advertising rainwear if rain is forecast in a given region. Local data should be collected as accurately as possible and it is necessary to respond quickly to changing conditions – not just weather.
Segmentation is also of great importance when we direct the message to Poles living in Poland, Polish communities abroad, or foreigners living in Poland. In this case, we may deal with cultural differences, various eating habits, or leisure time preferences.
How to use geosegmentation?
Geofencing is a good method of promoting services within geomarketing. This is especially true for restaurant, beauty parlour, and shop owners. Geolocation advertising will also work in the case of cinemas or shopping centres. To do this, one should create a virtual space around one’s premises. Geofencing uses a Wi-Fi network, GPS system, GSM, or RFID radio identification. If a potential customer is within a monitored environment, he or she will receive an invitation, a service discount or another encouraging benefit. Geolocation advertising relies on users’ local data, if they have the geofencing application enabled.
Local data is an extremely valuable repository of knowledge. We can use it to easily segment customer groups and then benefit from the geomarketing goodness. Having local data, one can plan a strategy for locating retail outlets – it may turn out that it is not profitable to situate a business in the planned area. Geomarketing surveys provide valuable information on demand for given products or services. Knowing customers’ preferences and needs in a given region is the starting point for a coherent and thoughtful marketing strategy that will increase the chances for local business success.
