Definition of a Geographic Target Market

Marketing is an important part of any business and often the source of major expenses. To use its marketing budget more effectively, a business can employ a targeted approach based on market research and segmentation. Geographic target marketing is one such approach that can help a business reach customers and promote itself more efficiently and at a reduced cost.

A target market is a group of potential customers who share certain attributes and receive special attention from a business's marketing efforts. Target markets may include likely buyers or consumers who are not yet familiar with a business's products but would have a chance to become likely buyers if they became more aware. A geographic target market relies on the physical location of a consumer's residence, place of business or site of visiting to determine whether the consumer falls within the business's targeted group.

A business can act on its geographic target market in a number of ways. Businesses may choose to open new locations or initially establish themselves in specific locations where the demographic of nearby consumers fits with a profile of likely customers. Other businesses offer goods and services that are more likely to attract customers in certain types of geographic locations. For example, a ski shop is more likely to have strong sales in a location where it snows throughout the winter and there are ski resorts nearby.

Besides choosing where to do business, a company can use geographic target marketing to decide where to spend its advertising dollars. Geographic regions that include more potential customers or represent a new, untapped market are more appealing to businesses than geographic locations that have lower population densities or fewer customers from a target demographic. For example, technology companies may invest more heavily in advertising in urban locations and near college campuses, while lawn and garden businesses would get more mileage out of their advertisements by placing them in suburban and rural locations.

Businesses can define their own target markets or rely on outside marketing firms to supply data and help make decisions. Marketing firms compile demographic data and perform surveys based on existing businesses and market trends to determine the best locations to do business or invest in marketing. A business that performs its own market research can still target particular geographic locations by collecting customer addresses to determine where more potential buyers might live or noting the locations of customers who order products online or over the phone to learn about where interest is high and identify potential locations for expansion.