Geographic Segmentation

Geographic segmentation is relatively easy to perform because the individual segments can be clearly defined on a map. It is a sensible strategy to employ when there are distinct differences in climatic conditions, access to transportation, proximity to round-the-clock service or repairs—as well as such geographic considerations as varying regional tastes or unique culture-based habits and behaviors.

Geographic segmentation even extends to facial features used in advertising. When Kodak originally introduced one of its cameras worldwide, the company quickly learned through adverse market feedback that potential consumers in many countries around the globe, from the Philippines to India, from Hong Kong to South Africa, could not relate to the white girl portrayed in the advertising. Kodak promptly modified its advertising by using local models, which contributed to a phenomenal success story.

Internationally, blocks or clusters of countries can often be approached in a similar fashion, particularly if they share the same language and cultural heritage. For instance, in Latin America the same advertising media are often appropriate for several countries.

While there are numerous cultural differences in many of those countries there are common problems with shared features, known as cultural universals. These include economic issues, marriage and family rituals, educational systems, religious observances, and supernatural beliefs.

Geographically, you can segment by region, city size, population density, or other geopolitical criteria. However, such segmentation is effective only if it reflects differences in need and buying patterns. Some entrepreneurs, for example, can adjust their advertising efforts to target very narrowly defined groups.

For instance, Panera Bread Company, a restaurant chain, has maintained prices and in some cases increased them even during a recession-wracked economy. Its management bucked conventional industry wisdom by avoiding discounts. Instead, they targeted customers who can still spend an average of about $8.50 for lunch, where other chains offered meals for as little as $5.

Further, Panera has been able to persuade customers to pay premiums because it has been improving the quality of its food. “Most of the world seems to be focused on a segment of the population who are unemployed. We’ve focused on the 90% that are still employed,” stated a senior Panera executive.

< Prev   CONTENTS   Source   Next >