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.

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.