Posted: May 25th, 2022

Geographic segmentation’s normal use case

Marketing Management

1. In a perfect world, a marketer wants to understand the target market as much as possible. Typically, only knowing one type of information about the target market is necessitated by data deficiency in the other areas.

Demographic information has the most obvious use cases, such as when the product is designed specifically for a target group, and would be relatively useless for others. An example of this might be if you are selling something that is specifically targeted at seniors you want to know that seniors are buying, but also where and how to reach them. Products that target specific ethnic groups are another good example if you import an unusual spice from West Africa that nobody else knows what to do with, the ideal scenario is to target an area with a lot of West African people. Another use case would be products like alcohol that have age restrictions. You have to market alcoholic beverages, typically, in a way that specifically does not appeal to minors.

Geographic segmentation’s normal use case is for a small business. Where it would be awkward or onerous to sell outside of a certain geography, a business would want to ensure basic geographic targeting to avoid attracting customers it could not serve.

Psychographic targeting refers to targeting based on people’s lifestyles and behaviors. There are some products where lifestyle-based marketing is most effective. This can be a means to differentiate a product in a field where there is otherwise not much differentiation. Psychographic targeting can actually influence the product itself, as is the case with automobiles, where automakers will sometimes try to build vehicles that appeal to particular psychographics, if those groups are large enough.

The final segment is behavior, which can be different from psychographic. An example of this might be a crossword or Sudoku book. The behavior of the purchaser is to typically buy on impulse, so these books are sold adjacent to the checkout at the grocery store, or in airports and train stations the product only appeals to people working off of certain behavioral cues, and that makes a big difference in the marketing of the product.

2. The first major segmentation that is required in Europe is by language group. Many companies that package in Europe simply choose to produce one package for all of Europe, where key things on labels are provided in all EU languages. Paliwoda (2007) points out that when the EU expanded it created a much more diverse Europe, forcing marketers to rethink their approach to the common market.

However, marketing in different countries goes beyond simply having more languages on the label. Each European country will have its own sets of consumer behavior and its own preferences with respect to distribution, advertising and other elements of the marketing mix. Thus, the best approach is to be narrower with geography, usually focusing on one of the larger markets and then expanding from there.

The second means of segmentation should be by psychographic, though this might depend on the country. If you are selling skateboards, for example, the psychographic is going to be fairly consistent across Europe, even if other factors are more variable. If you are choosing to market across Europe, then finding the common threads among your customers will be key to marketing at scale.

There are still going to be limits, especially with psychographics, because of the differences of marketing across Europe. If you limit geographically, you create a limit where you might be ruling out some easy wins in other nations. But if you go broad geographically and target psychographically, you might miss the mark on messaging, or distribution, and otherwise create difficulties for yourself. The best approach to Europe is really not to think that “we’re expanding to Europe” but to break down the market more finely.

3. The role of marketing in ensuring high customer loyalty is really to repeat the messaging that attracted the consumer in the first place; to remind them, even when they are not actively in a purchase cycle, of why they chose that brand in the first place. So a lot of it will be repetition of value props at the right time, in the right place (Investopedia, 2018).

For Aeropostale, social media is the venue, because that will help fans of the brand to stay in touch with the brand in between buying cycles. Making sure that customers are engaged with the company’s social media should have positive impacts.

Winn Las Vegas likely benefits more from targeted promotions. In particular, if a customer doesn’t come as frequently as in the past, a comeback campaign would be a good way of re-starting that relationship. But so would emails reminding them that they usually come at a certain time.

A college or university might wish to market to its alumni for money. This can be done regularly. A mailing list can provide electronic or hard copy material to alumni, and there can be regular pitches via email newsletters, that tell long form stories about the good that the school is doing with the alumni donations.

Subaru owners have a long buying cycle. The key for Subaru will be to stay in touch at regular intervals, probably with lifestyle messaging, or just a regular touch-in (i.e. “Hey, how’s your Subaru treating you?”). The key for Subaru here is to track owner sentiment, because the company needs to make sure that owner sentiment is positive so that the current owners give Subaru first dibs on the next purchase, even if that is several years ago. This is more of a customer relationship / service-oriented marketing approach.

GE home appliances should take a similar approach to that of Subaru. Given long buying cycles, fostering a relationship by being attentive to owner needs in between buying cycles is important. The difference with GE appliances is that there are new appliances and upgrades, both of which can be sold to existing happy customers in between buying cycles for specific items. Thus, there is an opportunity to combine customer service outreach with offers, deals and awareness pieces that help to promote other GE products.

References

All Business (2018) What demographics and psychographics mean for small business marketing. All Bustiness.com. Retrieved August 28, 2018 from https://www.allbusiness.com/what-demographics-and-psychographics-mean-for-small-business-marketing-426-1.html

 

Investopedia (2018) Brand loyalty. Investopedia. Retrieved August 28, 2018 from https://www.investopedia.com/terms/b/brand-loyalty.asp

 

Paliwoda, S. (2007) The marketing challenges within the enlarged single European market. European Journal of Marketing Vol. 41 (3/4)

 

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