Geographic Location – A Basis for Demographic Segmentation

Geographic location can often provide the basis for an effective a priori segmentation strategy. A firm with modest resources can dominate, if it so chooses, a small geographic area. Its distribution within the limited area can be Internet. Local media such as newspapers or spot television can be employed, and it is possible to buy space in regional editions of major national magazines. In fact Coca Cola with the inclusion of different Indian cultures in their advertisements with Aamir Khan is a wonderful example of “think globally and act locally”.

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In recent years, it has become increasingly possible to learn something about a company’s target consumers simply by knowing the postal zip code in which they live. Census-based demographic data on households has been analyzed by various companies to yield “average profiles” for households in different segments, or groups, of zip codes. In fact the cities and towns in India have been classified on certain basis. So a classification of Delhi might be classified as belonging to the same cluster as the classification of Mumbai, because they are very similar to each in terms of their scores on these variables. An advertiser can examine these scores of each classification cluster and identify which ones are most likely to respond to an advertising or direct marketing effort.

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