Tourism market segmentation

TOURISM MARKET SEGMENTATION

Prepared by: Ma’am L

TOPICS

• MARKET SEGMENTATION• WHY MARKET IS SEGMENTED• IDENTIFYING MARKET SEGMENTATION• BENEFITS OF MARKET SEGMENTATION• CRITERIA USED FOR DIVIDING MARKET SEGMENTS• WAYS TO SEGMENT MARKET• MARKET SEGMENTATION DECISION PROCESS• SPECIALIZED TOURIST SEGMENTS• MEASURES FOR TOURIST SATISFACTION

MARKET SEGMENTATION

“identifying tourism customers and deciding on how to meet their wants and needs”

“learn more about the customers”

“making the heterogeneous market into a homogenous market”

MARKET SEGMENTATION

“the process through which potential customers with similar needs and characteristics are

grouped together so that a tourism organization can apply marketing strategies for the selected market segment efficiently”

WHY MARKET IS SEGMENTED?

• Travel market is too large to reach efficiently• Travel market is to diverse to communicate• Breaking up the market will make it easier to

manage

IDENTIFYING MARKET SEGMENTATION

• WHO – who are in the market segment that we would like to have?

• WHAT – what are their requirements?• WHEN –when do we promote to our market

segment? • WHERE –where do we promote the product?

Through which distribution channel?• HOW – how do we develop marketing strategies

to reach the market?

BENEFITS OFMARKET SEGMENTATION

• Understand the needs and wants of customers

• Allocate marketing expenses efficiently• Further develop products or services• Develop marketing strategies more precisely

WAYS TO SEGMENTTHE MARKET

• Location of residence• Demographics

• Equipment ownership• Important product attributes

• Lifestyle attributes

CRITERIA USED FOR DIVIDING MARKET SEGMENTS

• Geographic Segmentation – grouping potential customers based on their location; oldest and simplest basis for market segmentation

• Psychographic Segmentation – grouping on how they live, their priorities, their opinions, their attitudes and their interests

Personality – introvert/extrovert, cognition, innovativeness

CRITERIA USED FOR DIVIDING MARKET SEGMENTS

• Demographic Segmentation – gender, age, ethnicity, occupation, educational level, income, household size and family situation

• Socio-Cultural Segmentation – religion, social class, family lifestyle, status

• Product-Related Segmentation – benefits people seek in the good or service, the amount of good or service used and degree of company loyalty

MARKET SEGMENTATION DECISION PROCESS

1. Select segmentation approach2. Create detailed profile of segment

3. Forecast market potential of each segment4. Estimate likely market share of each

segment5. Decide which segment to target and design

appropriate marketing mix

SPECIALIZED TOURIST SEGMENTS

1. Business and Professional Travelers-backbone/bread and butter

2. Incentive Travelers3. SMERF Groups

-Social, Military, Education, Religion and Fraternal

4. Mature Travelers5. Special-Interest Travelers

MEASURES FOR TOURIST SATISFACTION

MEASURES FOR TOURIST SATISFACTION

SATISFACTION EQUATIONActual Service > Expectations =

Actual Service = Expectations =

Actual Service < Expectations =