Grouping a market by country, region (northeast, southeast), or areas within a region is known as segmentation.

You’re correct in identifying that dividing a market based on geographical criteria such as country, region, or specific areas is known as market segmentation. This strategic approach allows businesses to tailor their products, services, and marketing efforts to meet the needs of different customer groups more effectively.

Geographical segmentation is particularly useful as it considers factors such as local customs, climate, culture, and preferences, which can significantly influence consumer behavior. For instance, a company may choose to market snow gear in the northeast region of the United States where winters are harsh while focusing on swimwear in warmer regions like the southeast. This strategy helps to optimize marketing resources and improve customer satisfaction by delivering more relevant offerings to each specific segment.

In summary, market segmentation, and specifically geographical segmentation, plays a crucial role in developing targeted marketing strategies that can lead to increased sales and customer loyalty.