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 OF
MARKET SEGMENTATION

• Understand the needs and wants of

customers
• Allocate marketing expenses efficiently
• Further develop products or services
• Develop marketing strategies more precisely
 WAYS TO SEGMENT
THE 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 approach
2. Create detailed profile of segment
3. Forecast market potential of each segment
4. Estimate likely market share of each
segment
5. Decide which segment to target and design
appropriate marketing mix
 SPECIALIZED
TOURIST SEGMENTS
1. Business and Professional Travelers
-backbone/bread and butter
2. Incentive Travelers
3. SMERF Groups
-Social, Military, Education, Religion and
Fraternal
4. Mature Travelers
5. Special-Interest Travelers
MEASURES FOR TOURIST
SATISFACTION
 MEASURES FOR TOURIST
SATISFACTION
SATISFACTION EQUATION
Actual Service > Expectations =

Actual Service = Expectations =

Actual Service < Expectations =