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Diploma In International Hotel

& Tourism Management

Module: Introduction to
Marketing
Lesson 5

Segmentation, Targeting and positioning

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 AGENDA
 DEFINITION OF MARKET SEGMENTATION
 CHARACTERISTICS USED FOR SEGMENTATION
 EFFECTIVE SEGMENTATION
 TYPES OF MARKET SEGMENTATION
 GEOGRAPHIC SEGMENTATION
 DEMOGRAPHIC SEGMENTATION
 PSYCHOGRAPHIC SEGMENTATION
 DEFINITION OF MARKET TARGETING
 DEFINITION OF NICHE MARKETING
 PATTERNS OF TARGET MARKET
 DEFINITION OF POSITIONING
 MAJOR POSITIONING ERRORS
 DIFFERENT POSITIONING STRATEGIES OR THEMES
 CONCLUSIONS
Copyright:Shan.G.J
 DEFINITION OF MARKET SEGMENTATION
 Market segmentation is the division of a market into
distinct groups of buyers who have distinct needs,
characteristics, or behaviour and who might require
separate products or marketing mixes
 A market segment is a group of consumers who
respond in a similar way to a given set of marketing
efforts .
 In the hospitality industry, (hotels) segment their
customers into :
-Corporate customers
-Individual on vacation
-Families on vacation Copyright:Shan.G.J
 CHARACTERISTICS USED FOR
SEGMENTATION
Examples of characteristics used for segmentation:
 Gender
 Price
 Interests
 Location
 Religion
 Income
 Size of Household
 Age
 Education
 Occupation
 Social Class
 Ethnicity
 Nationality
 End use (Example work or leisure) Copyright:Shan.G.J
 EFFECTIVE SEGMENTATION
 Set a segmentation strategy-whether short term or long terms
 Start with your own customers- Perform simple data analysis
on each product and service, identifying your main types of customer and
what they look like

 Focus on value first -This lets you cluster customers and create a
high-level investment planning strategy.

 Identify market research requirements- Then brief and

build in the differentiated research into the profiles ensuring at each stage
that the outputs will be actionable.

 Build up a range of segmentation tools- the next stage is

to mix and match these to create a range of segmentation tools.

 Actions from segmentation- If you have built your

segmentation up as recommended from individual data you should be
able to reference each of these segments to individual customers
making all segments actionable. Copyright:Shan.G.J
 TYPES OF MARKET SEGMENTATION
 Geographic segmentations
(addresses to their location)

 Demographic / socio-economic segmentation

(gender, age, income, occupation, education, household size, and stage in the
family life cycle)

 Psychographic segmentation
(similar attitudes, values, and lifestyles)

 Behavioural segmentation
(occasions, degree of loyalty)• product-related segmentation (relationship to a
product)
Copyright:Shan.G.J
 GEOGRAPHIC SEGMENTATION
 This is perhaps the most common form of market
segmentation, wherein companies segment the
market by attacking at geographic area.
Example, corporations may choose to market their brands in
certain countries, but not in others.
Geographic segmentation can take many forms (urban
versus rural, north versus south, seacoasts versus
interior, warm areas versus cold, high-humidity areas
versus dry areas, high-elevation versus low-elevation
areas). These examples also reveal that geographic
segmentation is sometimes a surrogate for (or a
means to) other types of segmentation
Copyright:Shan.G.J
 DEMOGRAPHIC SEGMENTATION
 Gender, age, income, housing type, and
education level are common demographic
variables. Some brands are targeted only to
women, others only to men. Music downloads
tend to be targeted to the young, while hearing
aids are targeted to the elderly.
 Education levels often define market segments.
For instance, private elementary schools might
define their target market as highly educated
households containing women of childbearing
age. Demographic segmentation almost always
plays some role in a segmentation strategy
Copyright:Shan.G.J
 PSYCHOGRAPHIC SEGMENTATION
 Psychographic (or lifestyle) segmentation, based
upon multivariate analyses of consumer attitudes,
values, behaviors, emotions, perceptions, beliefs,
and interests. Psychographic segmentation is a
legitimate way to segment a market, if we can
identify the proper segmentation variables (or
lifestyle statements, words, pictures, etc.).
 For example, if you were designing a market
segmentation questionnaire for an airline, you might
conduct a series of depth interviews to help design the
questionnaire. You probably would include a behavioral
section (frequency of flying, how purchase tickets, who
travel with, cities flown to, where sit, airlines flown,
money spent on airline tickets, etc.
Copyright:Shan.G.J
 DEFINITION OF MARKET TARGETING
 Market targeting is the process of evaluating each
market segment’s attractiveness and selecting one or
more segments to serve.
 A target market is a group of customers that
the business has decided to aim its marketing efforts
and ultimately its merchandise towards. A well-
defined target market is the first element to a
marketing strategy. The target market and the
marketing mix
 Once these distinct customers have been defined, a
marketing mix strategy of product, distribution,
promotion and price can be built by the business to
satisfy the target market.
Copyright:Shan.G.J
 DEFINITION OF NICHE
MARKETING
A niche is a more narrowly defined customer
group who seek a distinct set of benefits.

Identified by dividing a segment into sub

segments, distinct and unique set of needs,
requires specialization, and is not likely to
attract too many competitors.

Copyright:Shan.G.J
 PATTERNS OF TARGET MARKET

 EVALUATING THE SELECTING

 SINGLE-SEGMENT CONCENTRATION

 SELECTIVE SPECIALISATION

 PRODUCT SPECIALISATION

 MARKET SPECIALISATION

 FULL MARKET COVERAGE

Copyright:Shan.G.J
 Question and Answer
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