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Definition: Geodemographics

Geodemographics is the study of the population and its characteristics, divided according to regions on a geographical basis. This involves application of clustering techniques to group statistically similar neighbourhood and areas. The main source of data for this study is the census. However, periodicity of census data being high, other sources like country court judgements, property valuation and household council tax bands data are also used.

In the field of marketing, geodemographics can be of immense importance in segmentation. Following such segmentation, the prevalence and preference of each group can be determined. Among these, the high preference areas can then be identified and subsequently targeted for marketing and sale.

Geodemographic segmentation in marketing relies on the following assumptions of consumer behaviour:

1. People residing in the same area and in same conditions will naturally have similar requirements and similar demands than are two people located far apart.

E.g.Snow shovels for removing snow will be sold to colder geographic areas rather than to consumers in the tropical belt.

2. People from same neighbourhoods will have similar characters even when widely separated.

E.g. Spicy curry can be sold to an Indian consumer who has migrated to Europe for long.

Geodemographics also finds use in demand and sales forecasting.


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