Demographic Segmentation
Segmentation based on demographics such as age.A retailer finds that a promotional campaign was most successful with women in their 20s. They use this information to target these customers with similar campaigns.
Price Sensitivity
Segmenting customers based on their price sensitivity.A retailer has sales on Wednesdays and finds that price sensitive customers are willing to change their shopping habits and are likely to attend this sale. Customers who are insensitive to price are willing to pay higher prices to shop at their convenience. This allows the retailer to serve both price sensitive and insensitive segments.
Geographic Segmentation
Dividing customers based on location.A restaurant chain finds that customer satisfaction is low in a particular city. They subsequently investigate the management and customer service practices in this city to determine a cause.
Psychographic Segmentation
Psychographic segmentation is based on how people think such as their interests and values.A brand of tissue paper offers a fully recycled product for customers who are concerned about the environmental impact of their purchases. The same brand has a cheaper non-recycled product for price sensitive consumers who aren't willing to pay more for some perceived environmental benefit.
Behavioral Segmentation
Dividing customers based on what you have observed about their behavior.A ecommerce retailer mails out a coupon for 10% off all fashions to customers who have recently abandoned a shopping cart with fashion products in it.
Firmographic Segmentation
Dividing business customers based on characteristics of their business such as industry or number of employees.A Customer Relationship Management platform offers a version of their products for retailers and restaurants that includes point of sale functionality.
