What is the Difference Between Demographic and Geographic Segmentation

The main difference between demographic and geographic segmentation is that demographic segmentation categorizes customers based on factors like age, education, income level, and ethnicity, while geographic segmentation categorizes customers based on their geographical location.

Market segmentation refers to the process of dividing a target market of a product or service into smaller, more defined categories. In this process, customers are categorized into different groups with similar characteristics like age, gender, location, and interests. Furthermore, there are four main types of market segmentation: demographic, geographic, psychographic, and behavioural segmentation. 

Key Areas Covered

1. What is Demographic Segmentation
      – Definition, Features
2. What is Geographic Segmentation
     – Definition, Features
3. Difference Between Demographic and Geographic Segmentation
     – Comparison of Key Differences

Key Terms

Demographic Segmentation, Geographic Segmentation

What is Demographic Segmentation

Demographic segmentation groups customers together by focusing on certain traits such as gender, age, income, ethnicity, occupation & family status. Moreover, this is one of the most popular market segmentation methods. Some of the factors we consider in demographic segmentation include:

• Age
• Gender
• Income
• Occupation
• Family Situation
• Annual Income
• Education Level
• Ethnicity
• Ethnicity

The above factors are mainly used to segment customers (in B2C marketing). But in B2B (business-to-business) market segmenting, factors like company size, industry, and job functions are also considered.

When compared to behavioural and psychographic segmentation, demographic segmentation only requires few data points. However, it’s more nuanced than geographic segmentation.  Since demographic information mostly involves statistical and factual data, it’s comparatively easier to uncover this data.

What is Geographic Segmentation

Geographic segmentation refers to grouping your customers based on the region on their geographic location. This is more and simple and easier to conduct than other segmentation methods.  Moreover, we can do this segmentation in a number of ways. We can group them by their country, region, city, or even postal code. Moreover, the size of the region we target should depend on our needs as a business. Larger businesses target bigger areas, but for small businesses, it might be safer to stick to smaller areas.

We can use the following six factors to create customer segments in geographic segmentation.

1. Location (country, state, city, ZIP code)
2. Timezone
3. Climate and season
4. Cultural preferences (specific to a geographic location)
5. Language
6. Population type and density (urban, suburban, exurban or rural)

Let’s look at an example to understand geographic segmentation. If someone is opening a restaurant in Beijing, they will have to focus on factors like language and cultural preferences. In fact, these factors differ from region to region.

Difference Between Demographic and Geographic Segmentation

Definition

Demographic segmentation refers to grouping customers together by focusing on certain traits such as gender, age, income, ethnicity, occupation, and family status, while geographic segmentation refers to grouping your customers based on the region on their geographic location.

Factors to Consider

Age, gender, income, occupation, family situation, annual income, education level, and ethnicity are some factors to consider in demographic segmentation while location (country, state, city, zip code), time zone, climate and season, cultural preferences, language, population type and density (urban, suburban, exurban or rural) are the factors to consider in geographic segmentation.

Advantages

Demographic segmentation offers more variation than geographic segmentation, but geographic segmentation is easier and more simple.

Conclusion

Demographic segmentation refers to grouping customers together by focusing on certain traits such as gender, age, income, ethnicity, occupation, and family status, whereas geographic segmentation refers to grouping your customers based on the region on their geographic location. Therefore, this is the main difference between demographic and geographic segmentation.

Reference:

“What Is Geographic Segmentation & How Can You Apply It in Campaigns?” Instapage.com, 20 May 2021, Available here.
“How to Use Demographic Segmentation In ECommerce Marketing.” Yieldify, 13 May 2021, Available here.

Image Courtesy:

1. “Map of Russian postal codes” By Hellerick – Own work (CC BY-SA 3.0) via Commons Wikimedia
2. “Demographic segmentation” By BronHiggs – Own work (CC BY-SA 4.0) via Commons Wikimedia