Geographic region

Dividing total consumer markets by geographic region is useful for many tourism and hospitality organisations. It can be used in terms of pure geographic region, for example, in the case of airlines targeting whole populations within a 50 mile radius of the airport, or a tourist attraction targeting whole populations within a 2 hour drive. Alternatively a combination of geographic and demographic – geodemography – can be used. For example, the majority of young, single professionals in the UK are based in London and the South East whilst people in the North East of England tend to have lower household incomes. Segmenting markets using a combination of demographic and region-specific can make marketing more effective.

Dividing total consumer markets into segments according to demographic characteristics is the most commonly used method of segmentation. Information on the demographic characteristics of the general population is readily and freely available and for this reason it remains the most cost effective way in which total consumer markets can be segmented.

However, the aim of market segmentation is to identify similarities in behaviour amongst groups and people sharing the same demographic profile can sometimes vary considerably in their behaviour. For this reason behavioural and psychographic characteristics are often viewed a having a greater impact. Nevertheless, demographic characteristics are often used as the primary basis on which the other segmentation methods are developed. This is because behavioural and psychographic segmentation techniques can entail a high level of involvement and therefore they can be expensive. Furthermore, demographic information is often still needed alongside behavioural or psychographic characteristics in order to direct marketing communications geographically so that they can effectively appeal to those segments within specific geographic regions of a country.