Usage segmentation divides consumers into groups based on their consumption patterns and rates of a product. It categorizes consumers as non-users, light users, medium users, or heavy users. Companies then target specific usage groups, often focusing on heavy users who provide the most revenue. Usage segmentation is demonstrated through products packaged in different sizes tailored to consumption levels, like shampoo in travel sachets or Maggi noodles in multipacks. It aims to meet the top 20% of customers who generate most of the turnover according to the Pareto principle. Seasonal sales also exemplify usage segmentation by targeting products to demand cycles.

1. Usage Segmentation

2.  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 segmentation was established.
 Usage rate segmentation divides consumers according to how
much they use a product.
 They are divided into groups of non-users and light, medium,
and heavy product users, and companies often seek to target one
heavy user rather than several light users.

3. Examples:
 Sachets are a clear indication of the customization that
marketers are doing as per demand by customers.
 Pepsi and Coke being sold in large bottles of 2-3 liters, and
Shampoos which are being sold in small sachets so that people
can carry them while travelling. The reason for such packaging is
also usage based segmentation.
 Maggi being packed in increasing sizes like 8 packs, 12 packs
because of increasing consumption / usage by customers.

4. 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.

5. Seasonal sale and Usage based segmentation
 Seasonal sale can be an excellent example of usage
based segmentation.
 As the season of a product hits, the demand for the
product rises. 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

6. Usage based segmentation and its application in
Marketing
 About 3 decades back, the tetra pack as well as sachets were
difficult to come by.
 Now in a retail store we 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
packaging sizes were unheard of.

7.  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.

8. References
 www.dovepress.com/usage-rate-segmentation
 www.dobney.com/Research/segmentation

9. Thank You