Tourism and Hospitality Marketing

1 Market Segmentation and Positioning

Module 4. Market Segmentation and

Positioning

An association can't fulfill the needs and wants of all things considered. It endeavors

to do as such, it might bring about a monstrous channel of organization assets. Division is

basically the way toward isolating a specific market into segments, which show comparable

qualities of conduct. There are various division factors that permits an association to

separate their market into the homogenous gathering.

Course Learning Outcomes:

By the end of the module the students will be able to:

1. Define the meaning of market segmentation;

2. Identify the steps in market segmentation;

3. Create segmenting, targeting and positioning plan strategy; and

4. Evaluate the market segments in tourism and hospitality.

MARKET SEGMENT vs. MARKET SEGMENTATION

Market segment is a group of people that share same culture and/ or character having

similar needs. Each market portion is one of a kind, and advertisers utilize different criteria to

make an objective market for their item or service. Promoting experts approach each fragment in

an unexpected way, after completely understanding the requirements, ways of life,

socioeconomics, and character of the objective customer.

Meanwhile, market segmentation is a process of grouping the consumers according to

their needs and wants in a particular product or service to purchase. Mostly, they are group into
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different categories that will define their characteristics in buying, needing and wanting a product.

The sections made are composed of shoppers who will react likewise to promoting procedures

and who share qualities, for example, comparable interests, needs, or areas.

In market segmentation there are two primary ways: 1.

Identify why do you to segment the market

2. Develop segment profiles.

Therefore, Market segmentation is the way toward breaking your all out objective crowd

into discrete gatherings of clients with comparable characteristics or premiums. The qualities

utilized in fragmenting identify with your division technique or approach. Inside your picked

procedure, certain factors add to the improvement of explicit fragments of clients with

comparative characteristics.

SEGMENTATION STRATEGY

A market segmentation strategy further partitions your objective market into subgroups

that are simpler to oversee. Deciding the correct marketing segmentation strategy for your

business implies utilizing or consolidating segment, geographic, conduct, and psychographic

sections to arrive at a more focused on shopper or business base. The segmentation strategy fits to

the following:

• The differences of market in demographic, geographic and psychological.

• The market is open to any differences of an establishment.

• The establishment is existing for years in the market.

• The establishment is not distinct.

• There are too many competitors of the establishment.

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• The competitors has also their own market segmentation strategy.

SEGMENTATION VARIABLES
There is no most ideal approach to section the market, however, there is no lack of various

approaches to do it. None of the bases of division are fundamentally unrelated. There are two sorts of

approaches in the division of business sectors, similar to customer qualities and shopper reactions.

Below is a portion of the bases of division usually utilized in the travel industry and friendliness

showcasing.

Figure 1. Market Segmentation

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Demographic Segmentation

Demographic start from the word demography which implies an investigation populace.

The populace can be separated into age, sex, pay, occupation, religion, level of instruction, and

family cycle, among different factors. Segment division is one of the most direct bases for

portioning the market and furthermore one of the most important.

Demographic Variables

Age An age is a lot of individuals who are conceived around a similar

time ever, grew up with a comparative sort of encounters with
certain geographic division.
Gender People have unmistakable contrasts in their viewpoint and how
they see the manners by which the market capacities. Indeed, even
the economic scientists are exceptionally clear about the distinction
in the manner of thinking of the two sexual orientations thus, they
fabricate items that are sex explicit.
Family size or life cycle Family structure can be very valuable in the division since when a
relational dynamic changes, its needs and wants frequently do as
well. This largely influences their purchasing choice and your
business procedure.
Income/Occupation Income is likewise one of the significant factors, as this variable
chooses the amount at which the item is valued. The majority of the
item makers remember the income segment fragment while putting
a sticker price on the item.
Education Companies likewise plan their market procedures towards
potential clients dependent on their educational level and other
segment division, for example, occupation, and so on. This is done
in light of the fact that their item offers something that fulfills a
common enthusiasm for these portions.
Religion Marketing is totally extraordinary and depend on the nearby
Race traditions, religions just as nationality. With the tremendous
Nationality changes in universal business, there is likewise an expansion in the
use of segment division based on religion, race, and nationality.

Table 1. Demographic Variables

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Geographic Segmentation

Geographic segmentation is a way to serve your clients in a specific region, place or when

your customer has a particular preference of a service or product in a particular location. It

includes gathering potential clients by nation, state, district, city or even neighborhood. This
promoting approach is normal for private businesses that serve a wide segment client base in a
neighborhood or territorial domain.
Geographic Variables

International

National

Regional

City

Table 2. Geographic Variables

Psychographic Segmentation

The psychographic segmentation is a strategy used to the segment target client,

current or past clients by their mutual character attributes, convictions, values, mentalities,

interests, and ways of life and different elements. Recognizing these significant elements

can be an amazing method for advertising a similar item or service to individuals from in

different various demographics, geography or different characteristics. Each prospect or

customer/client has an alternate psychographic make up. Breaking down that makeup and

gathering comparable qualities is the beginning of psychographic segmentation.

Psychographic Segmentation

Social Class Recognizing people depending on the combination of

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socioeconomic status of a person, for example,

education, occupation, salary, family foundation, and
characteristics.
Life Style Lifestyle segmentation alludes to the direction that an
individual or a group has toward acquiring an item,
work, and play and can be characterized as an example
of characteristics, interests, and conclusions held by an
individual. Lifestyle segmentation has gotten
exceptionally famous with advertisers, in light of the
accessibility of purchaser information, estimation
gadgets and instruments, and the instinctive classes that
outcome from this procedure
Personality Personality attributes of the clients are one of the
psychographic factors utilized in dividing the market.
The ongoing crisis of bars and discotheques, clubs and
resorts are targeted at the individuals of the youthful 18-
25 years old; outgoing, independent people.
Frequently advertisers attempt to create characters for
their brands and items that copy that of their objective
market.
Table 3. Psychographic Segmentation

Behavioral Segmentation

Consumers are partitioned into bunches as per the basic practices they share.

Regularly these practices connect as far as anyone is concerned about, disposition toward,

utilization of, or reaction to an item. Twedt in 1964 recommended that utilization of an

item ought to be estimated legitimately to decide use levels, and that advancement ought to

be pointed straightforwardly at the overwhelming client.

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Behavioral Variables

Occasions This methodology attempts to decide the explanation or

event for buying an item and how it will be utilized. For
instance, carriers commonly portion clients dependent
on the purpose behind a traveler's outing: business
versus personal travel.
Benefits The advantage of a client looks for from obtaining an
item. Advantage float around proficiency, glory,
toughness, economy, resale esteem, and so on. By what
means will the item improve their general way of life?
User Status Looking past "substantial clients," it can likewise be
useful to distinguish portions dependent on a more
extensive arrangement of utilization designs, for
example, non-clients versus ex-clients, or one-time
clients versus normal clients.
Usage Rate Usage rate separates clients into the light, medium and
heavy user clients. The heavy user clients clearly
contribute more to turnover at that point light or
medium clients; the target of an association ought to be
to pull in the clients who will make a more prominent
commitment to organization deals.
Loyalty Status This methodology places customers to be a loyal and
dependent customers on their purchases, examples of
specific brands. A key class is a brand loyal buyer.
Organizations have expected that on the off chance that
they can recognize people who are brand faithful to their
image, and afterward portray different qualities these
individuals share for all intents and purpose, they will
find the perfect objective market. There is still a lot of
vulnerability about the most solid method for estimating
brand dependability.
Readiness Stage Readiness stage recommends that potential clients can be
fragmented by the fact that they are so prepared to buy
an item: uninformed, mindful, educated, intrigued,
burning, and expect to purchase. These phases of
availability are somewhat ambiguous and hard to gauge
precisely, however, preparation might be a helpful focal
point for understanding the client's attitude and how to
bump them toward purchasing, especially when a training
procedure is required preceding buy.
Table 4. Behavioral Segmentation
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Seven Steps in Market Segmentation

Market segmentation is broadly characterized just like a mind boggling process comprising

in two fundamental stages:

1) identification of wide, huge markets

2) division of these business sectors so as to choose the most proper objective markets

and create marketing mix likewise.

Everybody inside the marketing scene knows and talks about segmentation yet very few

really comprehend its hidden mechanics, consequently disappointment is practically around the

bend. What causes this? It has been archived that most advertisers bomb the division test and

start with a narrow mind and a lot of confusions, for example, "all young people are rebels", "every

old lady purchase similar beautifiers brands, etc. There are numerous measurements to be

considered, and revealing them is absolutely an activity of innovativeness.

The most generally utilized model of market division includes 7 stages, every one of them

intended to urge the advertiser to accompany an inventive methodology.

Stage 1: Identify and name the broad market

The greatest test is to locate the correct parity for your business: utilize your experience,

information and sound judgment to appraise if the market you have recently distinguished before

isn't excessively thin or unreasonably wide for you.

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Stage 2: Identify and make an inventory of potential clients' needs

This progression pushes the imagination challenge significantly more distant, since it very

well may be contrasted with a meeting to generate new ideas. What you need to make sense of is

the thing that needs the shoppers from the wide market distinguished before might have. The

more potential needs you can concoct, the better.

Stage 3: Formulate smaller markets

McCarthy and Perreault recommend framing sub-showcases around what you would call

your "commonplace client", at that point total comparative individuals into this portion, on the

condition to have the option to fulfill their needs utilizing a similar marketing mix. By beginning in

having a section with scopes of the significant need you attempt to cover: this will make it simpler

for you to choose if a given individual ought to be remembered for the main portion or you should

shape another fragment?

Stage 4: Identify the determining dimensions

It is significant to review the mentioned steps before doing the following steps. You ought

to have at this point a rundown of need measurements for each market portion: attempt to

distinguish those that convey a deciding force. Exploring the requirements and frames of mind of

those you included inside each market section can assist you with making sense of the deciding

measurements.

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Stage 5: Name possible segment markets

You have recognized the deciding components of your market segment, presently survey

them individually and give them a fitting name. A decent method for naming these business

sectors is to depend on the most significant deciding measurement.

Stage 6: Evaluate the behavior of market fragments

When you are finished naming each market fragment, permit time to consider what

different angles you think about them. It is significant for an advertiser to comprehend

marketing conduct and what triggers it. You may see that, while most segments have

comparable needs, they're as yet various needs: understanding the distinction and

following up on it is the way to make progress utilizing serious contributions.

Stage 7: Estimate the size of each market segment

Each fragment recognized, named and considered during the past stages ought to at

last be given an estimated size, regardless of whether, for absence of information, it is just a

harsh gauge.

STP- STRATEGY STEPS

Segmentation Targeting and Positioning (STP) is a key way to deal with present-day

advertising procedures and shows a connection between the general market and how any

fieldtested strategies its showcasing activities to contend in that market. Ordinarily STP is alluded

to as a procedure where division is grown at first, at least one objective market is chosen and

afterward the situating of the last item or service happens. The general reason for STP is to control

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the business to the arranging and actualizing an marketing mix program which is appropriate for

both the organization and the focused on gathering of individuals.

The STP model is helpful in the developmentt of marketing segmentation plan as it permits

the advertisers to organize their recommendations and afterward point in conveying important

and customized messages in order to get flawless with an alternate sort of crowds

There are fundamental steps in the STP model which are extremely helpful in investigating

the items or service segmentation being offered alongside the manner by which the worth and

advantages of the contribution are passed on to target gatherings. Right now, we will figure out

how to apply segmentation, targeting on and positioning model in any business association

incorporate the accompanying stepss to follow:

Stage 1: Segment the Market

Whatever a business is offering, it can't be everything for everybody. This is the

fundamental idea driving business sector division which includes partitioning different clients into

various gatherings that have basic needs and attributes. Right now, can tailor-make their

advertising draws near in order to meet the necessities of each gathering cost-viably alongside

giving an edge over your rivals.

Sectioning clients can be founded on various viewpoints like segment, conduct,

psychographic and geographic variables. For instance, a movement organization online

masterminds experience excursions around the world. Its clients are partitioned into three

gatherings as it is exorbitant to make assorted bundles for extra gatherings. The primary

segment incorporates individuals who are youthful and hitched couples and who are keen on

ecoaccommodating and reasonable excursions at outlandish spots. The second segment

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incorporates center salary families who are willing for a family-accommodating and safe get-away

arrangement and which likewise makes their outing fun and simple with kids. The third segment

incorporates rich retirees who need to go for an extravagant and beautiful excursion in the notable

urban communities.

Stage 2: Target your Customers

At this progression, organizations need to figure out which section they need to target.

Here, organizations to evaluate various factors, for example, the productivity and viability of each

section, breaking down the potential development and size of each portion and see how well the

organization can serve to the requirements of specific fragments. This progression can be clarified

from the past model where the online experience organization looks at the market size, incomes

and benefits of each portion.

Stage 3: Position the Offering

The last development is position segmentation that expects organizations to decide how

they need to put their contributions to the focused on and most significant client gathering. After

this, the most proper marketing mix can be chosen. Business ought to at first think why the clients

will profit more in buying into their company rather than to their rivals. This should be possible by

recognizing the unique selling proposition (USP) and afterward create a situating plan for seeing

how the various sections will see the items or service. Right now, can locate the best-promoting

model to situate its contributions.

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POSITIONING THE PRODUCT-SETIVE MIX

The way toward making an image of an item in the memory of the customers is called as

positioning. Positioning assists with making early introduction of brands in the minds of target

crowd. In less complex words situating helps in making an impression of an item or services

among the shoppers.

Steps to item Positioning

Advertisers with the positioning procedure attempt to make a one of a kind personality of

an item among the clients.

1) Know your intended interest group well

It is basic for the advertisers to initially recognize the intended interest group and

afterward comprehend their needs and wants. Each individual has differed interests, needs and

wants. No two people can think on similar lines.

2) Comprehend what your clients expect out of you.

The items must satisfy the requests of the people. Distinguish the item includes the advertisers

themselves must be very much aware of the highlights and advantages of the items. It is properly

said you can't sell something except if and until you yourself are persuaded of it.

3) Unique selling Propositions

Each item ought to have USPs; probably a few highlights which are remarkable. The

associations must make USPs of their brands and adequately convey the equivalent to the

intended interest group. The advertisers must themselves recognize what best their item can do.

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4) Know your competitors

An advertiser must know about the contender's contributions. o Tell the people

how your item is superior to the contenders o Keep in mind your competitors. o Tell

the intended interest group how your item is superior to other people. o The

advertisers should consistently endeavor hard to have an edge over their rivals.

5) Approaches to advance brands o Pick the correct subject for

the promotion. o Utilize snappy slogans. o The promotion must

not confuse individuals. o The advertiser must feature the

advantages of the items.

6) Keep up the situation of the brand o For a compelling

situating it is fundamental for the advertisers to keep on satisfying

the hopes of the end - clients. o Never bargain on quality. o Don't

definitely decrease the cost of your items.

o A Mercedes vehicle would not be the equivalent if its value is diminished underneath a

specific level.

o A Rado watch would lose its appeal if its value is equivalent to a Sonata or a Maxima Watch.

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References and Supplementary Materials

Books and Journals
1. Prasanna Kumar; 2010; Marketing of Hospitality and Tourism Services; New Delhi;
Tata Mc Graw Hill Education Private Limited

Online Supplementary Reading Materials

1. Demographic Segmentation Definitions Variable Example;
https://www.marketingtutor.net/demographic -segmentation-definition-
variablesexamples/; 31January2020
2. Example of Geographic Segmentation;
https://smallbusiness.chron.com/examplesgeographic-segmentation-61612.html;
01February2020
3. Market Segment; https://www.investopedia.com/terms/m/market -segment.asp;
31January2020
4. Market Segmentation;
https://trackmaven.com/marketing-dictionary/marketsegmentation/;
31January2020
5. Market Segmentation Strategy Solution;
https://cmgpartners.com/blog/marketsegmentation-strategy/; 31January2020
6. Psychographic Market Segmentation;
https://www.directivegroup.com/digitalmarketing/strategy/market-segmentation/
psychographic; 01February2020
7. Product Positioning Process- Steps in Product Positioning;
https://www.managementstudyguide.com/product-positioning-process.htm;
01February2020
8. Segmentation Criteria and Approaches;
https://courses.lumenlearning.com/marketing-spring2016/chapter/readingsegment
ation-criteria-and-approaches/; 01February2020
9. Segmentation Targeting Positioning STP Model;
https://www.marketingtutor.net/segmentation-targeting-positioning/;
01February2020
10. What is Demographic Segmentation? Why is it necessary for marketing?;
https://instapage.com/blog/demographic-segmentation; 31January2020

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Online Instructional Videos

1. What is Consumer Behavior in Marketing? – Factors, Model & Definition;
https://study.com/academy/lesson/what-is-consumer-behavior-in-
marketingfactors-model-definition.html; 31January2020
2. Maslow’s Hierarchy of Needs- Consumer Behavior;
https://www.google.com.ph/url?sa=t&rct=j&q=&esrc=s&source=web&cd=2&cad
=rja&uact=8&ved=2ahUKEwiFt5aYr63nAhWBGKYKHXVdDV0QFjABegQIDBAF&u
rl=https%3A%2F%2Fwww.youtube.com%2Fwatch%3Fv%3D07WfqHTYg34&usg
=AOvVaw3eH5SsepYgqYq2iuaaStbt; 31Janaury2020
3. What is Consumer Buying Behavior- Definition & Types;
https://study.com/academy/lesson/what-is-consumer-buying-
behaviordefinition-types-quiz.html; 31January2020

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