Question

Customer segmentation is imperative when trying to send messages to a target market. Segmenting consumers enables your team to stretch the budget by reaching the most ideal visitors who are likely to become leads, without wasting money on impressions that will never turn into conversions. Geographics and psychographics go hand-in-hand with basic demographic data in order for marketing professionals to adequately analyze their audience. Psychographics is the analysis of consumer lifestyles to create a detailed customer profile, and when combined with geographic and demographic characteristics, it develops a more 'lifelike' portrait of the targeted consumer segment! New technologies have made it easier for us to build relationships with consumers, however the sheer detail that you are able to collect can be overwhelming. It can be difficult to collect and even confirm accuracy when collecting data.

what are the advantages and disadvantages of using geographics in segmentation? How do demographics and psychographics work in this equation to affect distribution channels?

Answer 1

Geographic segmentation is a strategy of marketing in which the target audience has different choices and taste based on their location. It has a vital role in large scale industries to find out potential customers from different area and places all over the world or within the country.

The market can be divided by geographical areas such as city, county, state, region, country, or international region that enables companies to target varying wants and needs of the customers in different regions. Below are the advantages and disadvantages of using Geographic in segmentation.

Advantages Nowadays companies are going highly digitized so it is very easy to segment the market using geographic. We can easily target the audience of different segment using zip code, postal code, phone number area code etc. It helps small businesses to build a good brand in the local or regional area with small budget which is very cost effective for small companies. It also plays a vital role in large scale companies. By knowing the regional taste and preferences of each state and city, a large scale company can easily get to know about the potential customers and business buyer in each market.

Disadvantages In this segmentation, generally companies assume that all customers have similar needs in a geographic area. For example Italian people also may have their sub-division in interests like some of them are more religious and some are more into sports. Therefore geographic segmentation is typically tough to determine the potential customer for large scale companies some extent.

Distribution channels are the “4 ps” (product, price, promotion and placement) in marketing. A retailer can select the products based on his own preferences if the retailer’s needs are similar to his customer.it is possible only when he is able to categorized the market by using segmentation strategy. Demographic segmentation describes who the customer are based on age, gender, income and education etc. for example, a toy making company can target the customer according to age factor as 2-3 years children will be most potential customer for them rather than 20-40 age group. With the help of demographic segment, marketers evaluate the marketing mix. They make recommendations about whether to change, decrease, or increase the goods or services offered. Based on demographic data, marketers may adjust product features, distribution strategy, or other factors in order to reach a market segment that has the most potential. Psychographic segmentation is based on different interests, traits, attitudes and lifestyles of the end consumers. A garment retailer can easily come to know about the need of the potential customer in urban and rural areas based on their lifestyle and interest.

So based on the Demographic and psychographic segmentation, companies can easily achieve the target by spending less money on distribution channels. It also helps to remove the chain of distribution channels which is cost effective for the marketer. If a marketer know about the need and want of a particular market then he can easily sell his products via direct marketing. He can build his own website to sell the product in a potential market.