Geographic segmentation is when a business divides its market on the basis of geography. There are several ways that a market can be geographically segmented. You can divide your market by geographical areas, such as by city, county, state, region, (like the West Coast), country, or international region, (like Asia). So what are the advantages of geographic segmentation? Let's look at some.
It's an effective approach for companies with large national or international markets because different consumers in different regions have different needs, wants, and cultural characteristics that can be specifically targeted. It can also be an effective approach for small businesses with limited budgets. They can focus on their defined area and not expend needless marketing dollars on approaches ill-suited for their target geographic segment.
It works well in different areas of population density. Consumers in an urban environment often have different needs and wants than people in suburban and rural environments. Compared to other means of segmentation such as psychographic segmentation, demographic segmentation, or behavioural segmentation, geographic segmentation is relatively easy to perform.
Simply put, it’s a lot easier to determine which geographic region someone lives in than it is to determine the variable elements of their psyche, or their behavioural tendencies. The geographic location of someone’s residence is an objective fact, while the variable elements of their personality and what pushes them to purchase is much more subjective in nature.
Location-based marketing has become increasingly popular and more affordable—making it a valuable tool for businesses large and small. The main reasons small businesses need to consider using geomarketing are:
It helps generate more business: The goal of any marketing campaign should be to attract more customers. Location-based marketing can help you do that by getting your business in front of consumers when they are most interested in purchasing your product or service. For instance, if you are a local fitness instructor, your clientele are people within your city. Therefore, you can create Facebook advertisements that are limited to people within your specific zip code—which increases the likelihood of reaching potential leads.
Makes segmentation easier: Segmentation is a marketing activity that involves grouping customers based on shared interests, activities, or attributes. Location is one of the best ways to segment a group. If you can determine where someone is at a given moment, you can create a message that is tailored to that specific location—making it more relevant to that consumer.
Provides a better return: Good marketers work smarter, not harder. Therefore, you should always strive to increase your return-on-investment with any marketing activities. Collecting, analysing, and using location data can help you generate more engagement on your promotions and improve the return on your advertising dollars.
AirRentalz has harnessed location-based marketing within its platform. We are connecting local businesses with hosts which allows us to advertise service providers to potential guests who will be staying with a host in a specific area. By connecting hosts with local and other businesses we can deliver greater experiences for their guests by presenting them great places to eat, visit, sight see and do activities while they are holidaying or staying in that location. More importantly, we can time our messaging to ensure they are delivered at the most opportunistic times.
By harnessing the power of data by location, AirRentalz is taking location-based marketing to the next level for the short-term accommodation industry and the businesses that this industry supports.