To segment a market you begin by defining the market as a whole. The market as a whole, for Audi, is any person with a driver's license. The next step is to examine the four bases of segmentation (geographic, demographic, psychographic, and behavioural) and decide which, and how they are relevant to the particular product. Audi mainly utilizes Geographic, Demographic, and Psychographic Segmentation.
Geographic segmentation
Is geographic segmentation relevant to car buyers? Yes. The first decision Audi's marketers would make is which cars to market in which countries. Europeans, for example, drive much smaller cars than Canadians. Within a country like India, Audi might also segment the market into rural and urban areas. People who live in rural areas are more likely to buy a Audi A3 than a Audi A7.
Demographic segmentation
What about demographic segmentation? Demographics is a general term for any measurable information about consumers that allows marketers to group them into segments. Age is a relevant demographic for car buyers. The very young and the very old do not drive, and in between, say, from ages 20-70, the choice of car will be partly influenced by the person's age. Take the Audi A6, for example. A 20 year old is more likely to choose this car than a 70 year old because it is more flashy. There's more to demographics than simply age, though, such as segmentation by gender. Are women more likely to buy certain Audi models than men? Are men more likely to buy certain Audi models than women? There's also segmentation by income. A person's income level is a major influence on their choice of car. A young man just starting his career, or an older man working in a low-paying job, might desire an Acura NSX, but at $89,000 U.S., neither could afford to buy it. Family status, whether a person is married and whether they have children, is also a demographic factor that influences their choice of car.
Psychographic Segmentation
Psychographic segmentation is dividing the buyers in the market into groups based on social
class, lifestyle, or personality characteristics. These variables heavily influence purchase making decisions. When it comes to social class, Audi aims for Upper Middle Class to High class people, because it is a luxury brand. Peoples interest in various products can be
determined by their lifestyles, and indeed people can often express their
lifestyles through the goods that they consume like cars. Psychographic
segmentation has demonstrated its use as a practical marketing tool in consumer
markets.
An Audi product can be put into two categories . The first type of product it can be referred to as is a shopping product. It is more expensive than a convience product but also because it is a product that cnsumers will invest in. It fits their lifestyle compatibility, and desired benefits. It would be a heterogeneous shopping product, because the
prices, quality, and, features (of cars) vary so much. This could be said for someone
that is considering buying a Audi and might compare it to Honda, but
to even compare a Audi to a Honda would be blasphemy. It is also a specialty product because it is an expensive luxury car company and doesn't have as many stores as a convenience product does. A consumer will look to find a luxury model Audi and will not substitue a Audi with a Honda if their main priority is a luxury high end car. 
With the way Audi has been marketed and branded consumers have this concept of an Audi car being a specialty product because of its price range and luxurious, prestigious look. Those who have an Audi A6 , S8 or any Audi model for that matter are very reluctant to accept substitutes to fill in for an Audi, which
definitely has an exclusive image. Audi is "quality, luxurious, and truth in engineering" as informed by their commericals and spokesman. An Audi dealership helps create this image because they
have this boutique, prestige feel as any exclusive product would. This is where Audi has achieved greatness and is the envy of
many marketing professionals. Although some Audi models such as the A8 or S8 are more expensive and have
this very stylish, elegant, and upscale feel, some of their other models such as the A6, or A4 are reachable and
accessible to what one might call the "average" person who just might be looking for a lower end model. The models that have
helped launch the brand into this status have definitely been the A8, S8, R8, A7 and S7 and TT RS which are all their top line models. 
Marketing managers can use sales promotions to increase the effectiveness of their promotional efforts and to offer incentives to buy. In terms of sales promotion, Audi doesnt promote itself as much as other car companies (such as Toyota, Honda, and Nissan etc) when it comes to sale promotions and deal offers that
happen at the dealership level. The reason for this is because Audi has already established itself as one of the most luxiours car brands in the world along side with other luxury car brands such as BMW, and Mercedes and does not feel the need to promote sales knowing they will still attract customers regardless of promotional sales. Although, Audi will hold special incentives such as the "Audi Owner Loyalty Incentive" for returning Audi customers that currently own or lease any model year 2001 or newer Audi vehicle. Based on which 2012 Audi vehicle you choose , this loyalty offer extends $500-$1,500 towards the lease or $1,000-$3,000 towards the purchase of the customers next Audi vehicle. With all that said Audi's main focus is on personal selling.
