Geographic Segmentation vs Demographic Segmentation – What’s the Difference?
Geographic segmentation is not the only type of marketing segmentation – in fact, there are three other types that are commonly applied to help identify groups of customers with common characteristics: demographic, psychographic and behavioral segmentation.
Demographic segmentation divides a target market into different groups based on statistical data. This data can include things like age, gender, family situation, location, income, education level, ethnicity, and other factors. Companies can access demographic information about consumers through different sources, including through the United States Census Bureau, the Small Business Administration Office of Entrepreneurship, through market research websites, or from companies that do public polling.
Psychographic segmentation tries to divide a target market into categories based on psychological characteristics such as traits, values, motivations, beliefs, interests, and lifestyles. This data is not readily available, so organizations may have to conduct in-depth research into their customers to identify and accurately understand psychographic segments.
In B2B sales, target prospects may have different psychological influences and motivations depending on their roles and responsibilities. A sales manager might be motivated to maximize revenue, while a COO is motivated to maximize operational efficiency and a CFO wants to achieve great financial results. Dividing customer segments by their shared needs and values is psychographic segmentation.
Behavioral segmentation is the practice of grouping target prospects according to their past interactions with the marketing organization. This common practice requires marketing organizations to effectively track interactions between individual prospects and the brand across multiple marketing touchpoints. Marketers may group consumers according to their brand interactions, behavior on a website, purchasing patterns, or spending habits.