What are different types of product marketing segmentation?


What are different types of product marketing segmentation? Give one example?


Description: Macintosh HD:Users:bohemianme:Downloads:20-Green-Chai-Tea-NEW_1024x1024.jpgGreen Tea has seen tremendous growth in demand for last few years  and therefore our company M/s ABC has launched “Green Chai” which is intended to be sold in Indian Market in two flavors i.e. Lemon and honey.


The main benefit of Green Chai is that it is naturally rich in antioxidants which helps in reducing harmful effects that stress and pollution may have on your body.


Price for each tea bag is set at INR 4 each bag.


Availability of package is 10, 20, 30 and 50 units.


Segmentation in a business to consumer market ( when businesses create products for consumers directly ) is the process of dividing the audience or market into smaller groups of customers  having targeted traits which can be any of following: Behavioral, Demographic, etc. or they have similar demand patterns.


In order to sell Green Chai efficiently, we need to identify the target audience or the right market. To achieve this, we need segment the audience in different ways:


1.     Geographic Segmentation

a.     In this, we divide the target market into different geographical units such as countries, states and regions. Target audience can fall into multiple units. Since everyone loves drinking tea, and health conscious people are there in all geographies, our marketing strategy would be geographically neutral.

2.     Demographic Segmentation

a.     This is important type of segmentation as it will help us target different demographic variables of the target audience like age, gender, income, occupation, education, etc.

b.     Some of the targeted properties of the audience are:

                                               i.     Gender – Since both Males and Females are health conscious so the segmentation would be gender neutral.

                                              ii.     Age – Typically working professionals to mid-level people to even senior citizens are health conscious these days and therefore the segmentation would be “anyone over 22 years”.

                                            iii.     Income – Since normal tea costs quarter of what Green Chai does, the audience be full of people earning more than average. In Indian standards, person earning more than INR 3,00,000 annually.

                                            iv.     Education – Since Green Chai is bought by health conscious people, we can consider anyone who is minimum graduate – a target audience.

                                              v.     Social Class – Green Chai is mostly common in upper middle class and therefore people belonging to it will be target audience.

c.      These numerous combinations will help us get reach to our intended audience. Furthermore we will be able to measure the audience size.

3.Psychographic Segmentation

a.     It is about Psychographics is the study of lifestyle of individuals which is the way we live. It involves various studies and developing dimensions for mapping the lifestyle patterns and segmenting using those.

b.     Once of the methods is called AOI Framework which shows lifestyle pattern as a mix of activities, interests  and opinions with demographic explanations.

c.      Another Model is VALS ( Values and Life Style ) Model which are of 2 types – VALS-1 and VALS-2 which are most appropriate for western markets than the Indian one.

                                               i.     They are classified on basis of resources available at their disposal.

                                              ii.     Innovators are the set of the audience who are achievers, proactive, responsible. Their buying pattern shows their taste and they purchase niche high end products and are early adopters of new technology.

                                            iii.     Thinkers are mature users and are moved by their values, ideas. They value knowledge, care and they purchase durable and functional products which gives good return on investments.

                                            iv.     Achievers are successful and goals focused which is their career and family. Their preference lies in premium and high priced products reflecting their achievements.

                                              v.     Experiencers are young, impulsive and seeks excitement. They spend large sum on fashion and personal care products.

                                            vi.     While, people with lesser resources are Believers, Strivers, Makers, Survivors which are strugglers and are generally not happy with change and they follow brand loyalty.

                                           vii.     Since “Green Chai” is on premium side, it will require audience, which is health conscious, pricing has not a concern but the quality, Innovators, Thinkers, Achievers, Experiencers would be target audience.


Behavioral Segmentation


In this, market is divided into several buyer groups on basis of purchase decision and product usage made by us ( the consumers).

1.     Modern Consumers – These consumers actively look out for new herbal / organic products brought to the market. They are early adopters and are health conscious.

2.     Organizations – There are many organizations which actively work towards making their employees healthier and they partner with vendors / product manufactures to showcase the product.

3.     Gyms, Health Clubs– People who regularly workout at gyms are encouraged to consume Green Tea and even they understand the benefits.



Also there is volume segmentation where the audience is divided by the quantity of their consumption and are labeled as heavy users, moderate users and light users.


Benefit Segmentation


This divides the audience into type of benefits seekers. Firstly, we identify the benefits of the product and then map the audience with those.


In this, we will conduct exploratory research to develop a complete listing of possible value in segmenting the target market.

Therefore we have to  develop a sensitive and reliable scale to measure attitude dimensions. Then national sampling is done to cluster the respondents by their activities and attitudes.

Clusters are developed and being described in terms of their behavior, lifestyles, demographics, etc.


Benefits Segment




Favored brands

Economy ( Low price )


Heavy users

Value oriented

New products launches, economy editions, Green Chai


Men, Women

Moderate users

Prevention of health issues, Conservative

Green Chai, Himalaya Green Chai

Aesthetics, Good Smell, Luxury

Men, Women, Senior professionals

Moderate to heavy users

Health Conscious, Workaholics

Organic India ( 10 times costlier than Green Chai ),


Young Adults ( 18-22 year olds )

Low frequency

Curious about the product, health conscious

Green Chai



 Green Chai is moderately priced which makes it easier for people to experiment with the segment of Green Tea and is well suited for customers looking for affordable Green Tea options. While providing health benefits, it is saving a lot of money of consumers and therefore provides good return on investment.