Marketing91

  • HOME
  • Marketing Concepts
    • Marketing
      • Retail Tutorials
      • Market Research
      • Customer Management
    • Strategy
    • Management
    • Advertising
    • Branding
    • Business
    • Finance
    • Sales
    • Career Guidance
  • Digital Concepts
    • Blogging
    • Search Engine Optimization
    • Social Media Marketing
    • Facebook Marketing
    • Internet Marketing
    • Ecommerce
  • Brands
    • Marketing Mix of Brands
    • SWOT analysis of Brands
    • Brands Strategy Analysis
    • Business Models
    • Brand Competitors
    • TOP 10
  • Courses
Home » Marketing » Usage based segmentation and its application in Marketing

Usage based segmentation and its application in Marketing

May 22, 2018 By Hitesh Bhasin Tagged With: Marketing

About 3 decades back, the tetra pack as well as sachets were difficult to come by. However, now when you go to a retail store, you will find both – Milk & soft drinks being sold in tetra packs, and shampoo as well as hair oil being sold in sachets. Before the customer concept, these were packaging sizes were unheard of.

Once marketing was customer oriented, it was important to understand the consumption pattern of customers and thereby come out with unique ways to meet these usage patterns. And hence, usage based segmentation was established.

The concept of usage based segmentation is simple. For any product, the need and consumption level of customers will be different. Its like comparing the diesel consumed by a car vs the diesel consumer by a truck or a bus.

Some people like biscuits a lot and their consumption of biscuits is higher, whereas others might like cookies equally. Hence the biscuit guy is unlikely to buy cookies and vice versa. For the company, it becomes important to segment the guy who buys biscuits in large volume, otherwise they will land up targeting a person who likes cookies instead of biscuits.

I started with the example of Sachets because they are a clear indication of the customization that marketers are doing as per demand by customers. You will find Pepsi and Coke being sold in large bottles of 2-3 liters also. Whereas Shampoos, which are used only a handful at a time are being sold in small sachets so that people can carry them while traveling. The reason for such packaging is also usage based segmentation.

Why did Ola cabs and Uber cabs become so popular? They realized that there are many people who use taxi’s and at the same time, majority of these people have to hustle to catch a cab. Voila! “Call a taxi to your doorstep” was born for people who frequently use taxi’s but dont have it available at doorstep. Whenever you analyze usage based segmentation, you can find a particular usage type demanded by the market but which is not being provided by your brand.

Here are some excellent examples of usage based segmentation in action

  • Ultrabooks (Macbook air) launched by Intel and Apple looking at the long sitting hours of some of their customers.
  • Robust packaging of oil and other such day to day items which are used heavily by customers.
  • Maggi being packed in increasing sizes like 8 packs, 12 packs because of increasing consumption / usage by customers.
  • Production planning happening on the basis of usage by customers. The higher used items being produced more then the lesser used ones.

Pareto Analysis and Usage based segmentation

Usage based segmentation works on the Pareto Principle. It says, that a marketer should concentrate on the top 20% of their customers who are giving them the most turnover and using the product in the largest quantity. Similarly, with this type of segmentation, the marketer may also find segments which are untapped by anyone else.

So ideally, Pepsi should take a number of its total customers (Let us assume 100). Now out of this 100, 80% of consumption is happening by 20 people. So by the Pareto principle, Pepsi will make its marketing strategy such that these 20 people as well as like minded customers are targeted. Consequentially, more such people will be attracted and these 20 people will remain with the company, thereby giving the company a tremendous boost.

Seasonal sale and Usage based segmentation

Seasonal sale can be an excellent example of usage based segmentation also. As the season of a product hits, the demand for the product rises manifold. Thus marketers can also target seasonal products based on usage segmentation.

An example can be a company which is selling home appliances. Such a company can sell its fans during the summers, water purifiers during rainy seasons and finally geysers during winters. Thus, the usage patterns of each product will be different, and with the help of usage based segmentation, different customers can be targeted at different times.

Share this post:

Share on Facebook Share on Twitter Share on LinkedIn Share on Email Share on WhatsApp
Digiaide Marketing and Digital Marketing Courses

Related posts:

  1. 4 types of Market segmentation and how to segment audience with them?
  2. Role of Packaging in Marketing and sales of a product
  3. The 7 Steps of Market segmentation – Process of segmentation
  4. Beginners guide to Market segmentation
  5. How to decide your segmentation strategy? And which segment to target?
  6. 6 Types Of Customer Segments to Target
  7. Behavioral Segmentation | Behavioral Targeting
  8. 6 Advantages of Segmentation
  9. Demographic Segmentation – Meaning, Factors, Data and Example
  10. 19 different types of target markets based on segmentation

What Do You Want To Learn About? (Start Here)

  1. Marketing Hub
  2. Management Hub
  3. Marketing Strategy
  4. Advertising Hub
  5. Branding Hub
  6. Market Research
  7. Small Business Marketing
  8. Sales and Selling
  9. Marketing Careers
  10. Customer Management
  11. Top 10 Lists
  1. Internet Marketing
  2. Blogging
  3. Search Engine optimization
  4. E-commerce
  5. Facebook Marketing
  6. Social Media Marketing
  7. Business Model of Brands
  8. Marketing Mix of Brands
  9. Brand Competitors
  10. Strategy of Brands
  11. SWOT of Brands
GET DAILY MARKETING UPDATES

About Hitesh Bhasin

I love writing about the latest in marketing & advertising. I am a serial entrepreneur & I created Marketing91 because I wanted my readers to stay ahead in this hectic business world.

Comments

  1. fadzai says

    hie Hitesh… I’m a lower six student and I’m finding it difficult to understand the whole concept of market segmentation and how it benefits the production manager and the marketing manager

    Reply
    • Hitesh Bhasin says

      https://www.marketing91.com/market-segmentation-guide/ Here you go. Its a beginners guide to Market segmentation. Hope it helps.

      Reply
  2. Brewster.Sunny says

    Old people who rely on the encouragement of others to fight are not strong; those who are encouraged by others to struggle are simply cowards

    Reply

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Advertisement
Recent Posts
  • Budgetary Slack – Role, Causes and Drawbacks
  • Capitalization – Definition, Importance and Types
  • Brinkmanship – Definition, Examples and Tips
  • Community of Practice – Definition, History and Types
  • Collaboration – Definition, Importance, Types and skills
Advertisement

Marketing91

MORE INFO

  • About Marketing91
  • Privacy Policy
  • Cookie Policy
  • Disclaimer
  • Terms of Use
  • Advertise
  • Contact us
  • Sitemap
  • ISO 9001:2015 Certified

LEARNING SERIES

  • What is Communications
  • Types of Communication

WE WRITE ON

  • Marketing
  • Small Business
  • Management
  • Internet Marketing
[email protected]

Copyright © 2022 Marketing91 All Rights Reserved