What is geodemographic segmentation?

Geodemographic segmentation is supremely essential in marketing. It is, in fact, the very first stage in the ensuring that you are able to market your products well. In very simple terms, without any detailed explanation, it means to define your target audience and target buyers.

It is a segregation based on not just one or two but several factors of consideration such as the age group, locality or region of residence, occupation, gender, and similar other elements. What follows next is a quantitative comparison. It is an assumption that the differences within the group will be way lesser than those existing between the various groups.

This is what leads to a state of so-so homogeneity and makes marketing of products customer specific. Thus, this is extremely important because if you do not know who to target, then how do you publicise your product and ensure that items are sold in the market. After all, sales ensure profit and keep the company’s profits flowing in.

The technologies employed for the above-mentioned task are:

• Geographic Information System (GIS): It is a device used in business for analysing and understanding information that consists of a geodemographic database, digital maps, computer and software.
• Database Management Software: This is a program which is computer based. Information is recorded, kept up to date and organised for later use and manipulation.

Principles governing Geodemographic Segmentation

Two principles on which geodemographic segmentation is based on, are:

• The first principle on which geodemographic segmentation is based is that people putting up in the same neighbourhood are inclined to have similar tastes and interests.
• The second principle on which geodemographic segmentation is based is that two neighbourhoods with similar characteristic features can be put into the same category. This is, irrespective of the distance between the two.

Advantages of Geodemographic Segmentation

There are several advantages of geodemographic segmentation:

• Effectiveness: This means that top companies can ensure that their marketing strategy is on point. Once the target group is defined, it is easier to know how to make the product fit into the outline of their needs. Thus, the effectiveness of the company is assured. The primary motive is to make the product sell by making the potential buyers believe that their needs can be fulfilled by the particular item. Consumer profiles are thus easier to understand and interpret.
• Ease of operations: This means that once the target group is known, accordingly steps can be taken to ensure that their attention is caught for the product. For example. In case of an item for kids, the advertisements can be vibrant and free toys may also be provided. On the other hand, if the target is the aged, then accordingly means may be adopted. It is very important to understand the taste of the potential clients. In fact, in order to ensure ease of operations, the marketing teams may also be divided accordingly and they may further appoint and allocate responsibilities. Thus, a hassle-free execution of the assigned task is made possible.
• Optimum utilisation of resources: Geodemographic segmentation ensures that there is no waste of time or resources. Once the target is known, steps of marketing are taken accordingly. There is no waste on the trial and error method where there is no surety of what is going to work and what isn’t. Proper planning is done beforehand to save time, energy and efforts. There is a harmonious execution of all plans.
• Lack of pressure: This pertains to those who are working for the company. Proper and timely allocation of work helps to cut down on the workload. This means that everyone knows what their role is and what is expected of them. They can this focus on their own work and not be confused as to how things are to be done.

Disadvantages of Geodemographic Segmentation

• The very assumption that all those in a particular group, are bound to have similar needs is a big disadvantage. It is not necessary that this will be the case. No two humans think alike or have the exact same needs. Thus, geodemographic segmentation leaves very little scope to cater to individual differences. In fact, they are totally ignored. This, it is not necessary that the segregation is bound to yield good results for the company. Everyone has a different lifestyle, daily situations to face and problems to solve. Thus, these are overlooked in case a company engages in geodemographic segmentation.
• Various tastes cannot be met through geodemographic segmentation. This is so because what may appeal to one person, may be terrible in the eyes of someone else. At times, even if a product fits the needs of everyone, it fails to meet the tastes of people. This is where a matter of choice steps in. While the first disadvantage pertains to a compulsion, this is one where the masses have the freedom to pick. Thus, there may be times when competing brands and companies come up with something more appealing to the senses. A big factor regarding this could the pricing of a product. At the end of the day, the pocket pinch matters the most to the common man.
• At times, the information collected may be skewed. This means that it may be faulty or the population in one are may consist of too many people of the same age or profession or other likewise element. For example, in a locality of factories, the main population will be labourers and the working class while students will be the main population in a region dominated by universities. Thus, the skewed population can yield skewed data. In such cases, there is an overall misinterpretation of the area. Other factors that lead to such errors may also be a migration of population and sex ratio between the males and females. Problematic geodemographic segmentation can, in turn, lead to reduced accuracy of operations and adoption of incorrect and ineffective marketing methods. This defeats the entire purpose of the task and proves to be a total waste.

Thus, geodemographic segmentation is significant and needs to be done strategically and wisely. Though it has both pros and cons, it can prove to be of great help to maximise the sales and profits incurred by the company.