What is Geodemographic Segmentation?

Geodemographic Segmentation is the study of the population and its features split geographically into regions. It entails the use of clustering algorithms to group statistically comparable neighbourhoods and places.

The census is the primary source of data for this study. Due to the census data’s high frequency, additional sources such as country court judgments, property valuation, and household council tax bands data are also utilised.

Meaning of Geodemographic Segmentation

Geodemographics may play a significant role in market segmentation in the realm of marketing. Following this segmentation, it is possible to ascertain the prevalence and preference of each category. Among them, the locations with the highest desire can then be selected and targeted for marketing and selling.

Why Geodemographics is Important?

Geodemography is a synthesis of demography, geography, and sociology with the objective of classifying them for use in business, social research, and public policy. It is the examination of population characteristics that are classified geographically.

Demography is the scientific study of populations. The variables are size, division, age and gender mix, literacy rate, and other human aspects. Geography is the study of the relationship between place and space in relation to the variety of physical and human phenomena.

Geodemographic segmentation refers to a set of techniques for categorising and describing neighbourhoods or areas based on the assumption that people who live in close proximity have comparable demographic, socioeconomic, and lifestyle traits.

Optimal resource utilisation: Geodemographic segmentation guarantees that no time or resources are wasted. Once the target has been identified, marketing measures are conducted in accordance with the objective. There is no use in wasting time on the trial and error technique because there is no way of knowing what will work and what will not.

Principle in Geodemographic Segmentation

The basic ideas of geodemographic segmentation are as follows:

  1. Persons who reside in the same neighbourhood are more likely to share comparable qualities than two random people.
  2. Neighbourhoods can be classified based on the characteristics of the people who live there. Even though they are far apart, any two neighbourhoods may be classified as belonging to the same group, i.e., they include comparable sorts of people.

Advantage of using Geodemographic Segmentation

Effectiveness

This implies that leading businesses may be confident in their marketing approach. It’s easy to figure out how to make the product fit into the shape of their demands after the target group has been identified.

Ease of Operation

This implies that after the target group has been identified, appropriate procedures may be followed to guarantee that the product captures their attention. As an example. When advertising a product for children, the adverts might be colourful, and complimentary toys may be included.

Optimum Utilization of Resources

Geodemographic segmentation guarantees that no time or resources are wasted. Once the target has been identified, marketing measures are conducted in accordance with the objective. There is no use in wasting time on the trial and error technique because there is no way of knowing what will work and what will not.

Lack of Pressure

This refers to people who are employed by the firm. Workload reduction is aided by proper and timely job allocation. This implies that everyone is aware of their responsibilities and expectations. They can concentrate on their own job without being confused about how things should be done.

Disadvantage of using Geodemographic Segmentation

The sheer idea that everyone in a group has the same wants is a major flaw. This does not always have to be the case. No two people think the same way or have the same wants. As a result, geodemographic segmentation provides limited room for accommodating individual variances. In reality, they are completely disregarded. This does not mean that segregation will always provide positive consequences for the firm.

Geodemographic segmentation will not be able to cater to a wide range of tastes. This is because what appeals to one person may appear to be dreadful to another. Even though a product meets everyone’s needs, it may not appeal to everyone’s tastes. This is where a matter of choice steps in. While the first disadvantage is based on compulsion, this disadvantage is based on the masses’ ability to choose.

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