Geodemographic Segmentation

In attempting to fully understand the concept of geo-demographic segmentation, it is imperative to split the term into two and try to give a brief explanation of each as well as the meaning of segmentation.
Strydom (2000), defines segmentation as the division of a heterogeneous market into fairly homogeneous subsets or segments of customers who normally have similar needs and likely to respond in a similar way to the market offering. Basically, geo-demographic segmentation converges with the geography and demographics of a particular group of people in an identifiable area. According to Charlie Nelson (2001), this process is concerned with grouping consumers according to characteristics such as age or household structures. Geography, on the other hand, is concerned with the location or area where people live. In most cases, people who live in the same area are assumed to have similar socioeconomic characteristics. In some instances, they use similar transport and shopping options hence they tend to live together in an identifiable geographical area. Therefore, geo-demographic segmentation can be summed up as the overall process or attempt to identify groups of small areas that have people with similar demographic characteristics. In most cases, different products are developed on the premise that people with similar interests income levels tend to live in the same areas hence it would be easier to reach them.
In view of the definition of geo-demographic segmentation outlined above, it can be noted that the approach is mainly concerned with identifying geographical locations with people who share similar needs. According to Thomas Exter amp. Ian Mosley (2004), geodemographic segmentation or clustering involves classifying small geographic areas, for example, block groups or neighborhoods into relatively homogeneous market segments.

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