Week 7: Market Segmentation & Tourist Behaviours
Target market & Segmentation
* Segmentation: grouping consumers into segments based on similar characteristics.
* Breaking down into certain criteria.
* Targeting: choosing the one or more segments that are mostly likely to respond positively to a promotional message.
* The way you select the segment.
* Choose segment that is cheaper, more effective, and easier to achieve.
* Undifferentiated strategy:
* Sending the same promotional message to everyone
* Mass distribution and advertising hence lowering the costs of advertising units, marketing research and product development.
* Most suited for homogeneous, newly introduced products with homogenous markets.
* Differentiated strategy:
* Designing more than one promotional message, with each communicating different benefits.
* For products that vary in design and are in the mature stage of the product lifecycle.
* Concentrated strategy:
* Designing a promotional message that communicates the benefits desired by a single specific segment.
* Effective if companies with limited resources and additional financial and staff resources are available.
Factors in deciding a segmentation method
* Can the segment be:
* Easily identified and measured in terms of purchasing power and size?
* Large enough to be profitable?
* Reached effectively through advertising and promotion?
* Interested in the product service offered?
* Likely to grow in the long-term?
* Grouping tourists locally, regionally, nationally, and internationally.
* Oldest and simplest basis for market segmentation.
* Common for tourism suppliers to market to a limited region.
* Most popular basis of segmentation.
* External characteristics e.g. gender, age,...