When you ask about grouping consumers, you are asking about market segmentation, which is the process by which individuals are identified and targeted as sharing similar characteristics that are important to product marketing. If grouping consumers is market segmentation, then the inverse is also applicable: market segmentation is grouping individuals along lines of shared similarity.
One of the categories for market segmentation (groupings) is the geographic variable. It is a variable because different individuals, though clustered with people in similar geographic units, are identified by different geographic features. For an illustration of this difference surrounding similarity, think of someone in the geographical area of Texas compared to someone in the geographic area of Vermont: those in Texas can be grouped in a similar geographic unit, while those in Vermont can be grouped according to their similar geographical unit, though those in Texas are in a surprisingly different geographical unit from those in Vermont thus cannot be grouped together according to geographical features.
There are essentially four sub-categories of the geographic variable though some sources may expand on particulars more than others. The basic four are:
- Region: by continent, country, state, or even neighborhood
- Size of metropolitan area: segmented according to size of population
- Population density: often classified as urban, suburban, or rural
- Climate: according to weather patterns common to certain geographic regions ("Market Segmentation," NetMBA.com)
Other marketing experts expand on these initial four: "climate, terrain, city size, population density, and urban/rural areas ... region, metropolitan size and inhabitants" (Williams).
Thus it is clear that geographic variables can be used to group consumers in segments according to needs and responses that differ by world area, or nation because national cultures emphasize different materialistic values; region because consumer needs can differ from one region to another, e.g., winter boots in Vermont or Texas; states for the same reasons as for regions plus political, cultural, and demographic reasons; city size because needs in metropolitan cities vary greatly from needs in rural cities; postal codes because postal code distinctions identify variances in socioeconomic levels (relevant also to psychographic and demographic variables) that correlate to needs; climate because of the illustrated differences between Vermont and Texas pertinent to different climate zones across longitudes and over latitudes; distance because of varying social, cultural, political and economic needs and responses between countries and across continents.
"Market Segmentation." NetMBA.com, Internet Center for Management and Business Administration, Inc.