Module

For Tourism & Hospitality

Marketing

LESSON 2
 TOURISM MARKETING
DEFINITION OF A MARKET

A market is a set of actual and potential buyers of a product. These buyers share a particular need
or want that can be satisfied through exchange relationships. The meaning of the term market has evolved
over the years. To marketing professionals, a market is all actual and potential buyers of a products and
services.

The tourism product is not for all. The tourism industry aims to target a specific set of
individuals. It is for a particular set of buyers, a niche market. There are 3 steps to target marketing:
market segmentation, market targeting, market positioning.

1. Market Segmentation
A market is comprised of varied profiles and characteristics that can be further
segregated.

Characteristics of a Market Segment

1. Identifiable – the people who comprise the segment can be located and identified such as
targeting them would be easy.
2. Cohesive –the consumer should be part of a whole whose specific qualities are common at
all.
3. Measurable –the marketer should be able to estimate the size and potential spending of the
members of the market segment.
4. Accessible – the members of the segment should be accessed by marketing efforts and
promotional activities to be conducted. If they are difficult to reach, efforts to reach out to the
specific segment might be futile.
5. Substantial – segment should be large in order to be substantial. If the segment is small, it
should have a high spending capability to make significant impact on the business’ bottom
line.
6. Actionable – the company has enough resources and commitment to enable effective
penetration to the identified segment to ensure effective positioning.

VARIALBES TO SEGMENT CONSUMER MARKETS

GEOGRAPHIC DEMOGRAPHIC
Nations Age
States Life cycle
Regions Gender
Countries Income
Cities Occupation
Neighborhoods Education
Barangays Religion
Towns Race

PSYCHOGRAPHIC BEHAVIORAL
Special occasions
Social class Benefits sought
 Lifestyle Usage rate
Personality User status
Loyalty status
Buyer readiness

Variable for Segmentation

Geographic – divides the market into different geographic units such as nations, states, Regions,
Countries, Cities, Neighborhoods, Barangays and Towns. Some companies make decisions to strengthen
a foothold on a certain geographic region, concentrating their resources in ensuring deep penetration of a
specific geographic location.

Demographic – refers to segmenting the market based on variable such as, age lifecycle, gender, income,
occupation, education, religion, and race. It is good to segment the market based on demographic
variables because consumers would have similar likes and possible consumption patterns and behavior.

Psychographic – divides consumers based on different psychographic profiles such as social class,
lifestyle and personality characteristics. Different social class will have different tastes and preferences on
what they buy.

Behavioral – it is a good starting point for creating a communication campaign to target specific
segments that would seem viable for the company.

Technographic – this is the fifth variable for market segmentation. With the privilege of the internet and
the world wide web, there is an increasing divide between the users and the non-users of technology in
searching for travel information.

MARKET TARGETING
TARGET FACTORS

1. Segment size – refers to the current sales volume, growth rate, and high profit margin.
2. Attractiveness – refers to the potential impact of the segment to the company. One that is not
saturated and has few aggressive competitors would be structurally attracted.
3. Company objectives and availability of resources – refers to the main reason for its
decision making and the available resources the company will use to make its objective a
reality.

MARKET COVERAGE STARTEGIES

 1. Undifferentiated Marketing – a company ignores market segmentation and goes after the
entire market with only one market offer.

Product Market

2. Differentiated Marketing – approaches the market by targeting several markets segments

using separates offers per segment. Companies may offer several products for different
market segments to capture a bigger chunk of the market.

Product Market

3. Concentrated Marketing – is practiced by companies with limited resources. It pursues

getting a big sale of a small market rather than a small share of a large market. Companies are
able to allot its resources in making its presence felt in specific market with greater impact.

Product
Market

Factors when choosing a market coverage strategy

1. Company’s Resources – these refers to how much money and resources the company
has and which can be allocated to marketing. If the company has limited resources, it is
logical to use concentrated marketing.
2. Degree of Product Homogeneity – if products are standardized and identical, it is more
advisable to go for undifferentiated or concentrated marketing.
3. Market Homogeneity –if there is a diverse market has a lot of similarities, differentiated
marketing is advisable. If a market has a lot of similarities, undifferentiated marketing
may be used.
4. Competitors Strategy –it is important to assess the strategy competitors are using so that
the correct strategy can be implemented to counter their marketing efforts. If competition
is doing undifferentiated marketing, it would be advantageous to do differentiated or
concentrated marketing. If competitors are doing segmentation, concentrated marketing is
a must.

MARKETING POSITIONING
 1. Unique selling proposition (USP) –is a term used to identify what makes the products or
service different from others. This USP may occur due to the product’s physical
attributes, added services personnel, location or image.
2. Competitive Advantage – is the product’s advantage over competitors, which is gained
by offering greater value either by offering lower prices or providing more benefits to
justify higher prices.
3. Top of Mind – is the highest level of recall that a brand receives. It means that the brand
occupies the top spot in a consumer’s mind.

NEW AND EMERGING MARKETS

1. Economic growth in major source markets

2. Increase in disposable leisure time and a longer life expectancy with a sound health to
travel.
3. Changes in living conditions especially city dwellers becoming more inclined to engage
in tourism.
4. Rising educational levels and increase access to information, stimulating curiosity
5. Increasing integration of life.

TYPES OF MARKETS

1. Family market
 Joint decision-making families
 Husband making the decision
 Wife making the decision
2. The senior market
3. The youth market
4. The meetings, incentives, conferences, and exhibition (MICE) market and business
tourism