Geographic segmentation is a way of grouping people within a market using geographic variables such as countries or regions. Multinational companies use geographic segmentation to focus on how consumer needs differ by country. These are grouped according to population size instead of geography. Geodemographic segmentation combines geographic and demographic data to define market segments. Psychographic segmentation groups people or organizations according to similarities in consumer lifestyles, interests, activities, and opinions.
Psychographic segmentation provides clues to what goes on in consumers' minds.
The necessary data on consumer attitudes and lifestyles can be difficult to collect. Behavioral segmentation can be effective in any market, as long as you understand how the behavior influences consumer buying behavior. Marketers can also use brand loyalty in behavioral segmentation. Every major industry group has a two-digit SIC code and can be further divided into more specific categories. SIC codes are widely accepted and fairly simple to use, but the system doesn't meet every marketer's needs.