DTM50153

TOURISM AND HOSPITALITY MARKETING

CHAPTER 4
MARKET SEGMENTATION AND
POSITIONING
By:
Norharnani Zulkifli
Pensyarah DH44
Jabatan Pelancongan Dan Hospitaliti
Politeknik Muadzam Shah, Pahang
 Learning Content

• 4.1.1 Explain the meaning of market segmentation, positioning, target

market and niche market
• 4.1.2 Explain the factors that determine the selection of a market segment
• 4.1.3 Identify the relationship between market segmentation and marketing
objectives
• 4.1.4 Identify target market and niche market
• 4.1.5 Identify market segmentation for tourism and hospitality products
and services
• 4.1.6 Predict and rationalize potential future products or services in tourism
and hospitality industry
 A few years ago, Dunkin’ Donuts paid
dozens of faithful customers in Phoenix,
DUNKIN’ DONUTS Chicago, and Charlotte, North Carolina,
VS $100 a week to buy coffee at Starbucks
instead.
STARBUCKS COFFEE
At the same time, the no-frills coffee chain
paid Starbucks customers to make the
opposite switch.

When it later debriefed the two groups,

Dunkin’ says it found them so polarized that
company researchers dubbed them “tribes,”
each of whom loathed the very things that
made the other tribe loyal to its coffee
shop.

Dunkin’ fans viewed Starbucks as

pretentious and trendy, whereas Starbucks
loyalists saw Dunkin’ as plain and unoriginal.
“I don’t get it,” one Dunkin’ regular told
researchers after visiting Starbucks. “If I
want to sit on a couch, I stay at home.”
4.1.1 Explain the meaning of market segmentation,
positioning, target market and niche market

Figure 1 shows the three major steps in target marketing.

1. The first is market segmentation, dividing a market into distinct groups that might
require separate products and/or marketing mixes.
2. The company identifies different ways to segment the market and develops profiles of
the resulting market segments.
3. The second step is market targeting, evaluating each segment’s attractiveness and
selecting one or more of the market segments.
4. The third step is market positioning, developing competitive positioning for the product
and an appropriate marketing mix.
4.1.1 Explain the meaning of market segmentation,
positioning, target market and niche market
Definition of Market Segmentation
Dividing a market into distinct groups of buyers
with different needs, characteristics, or behavior
who might require separate products or
marketing mixes.
No Market Segmentation
Segmented by Sex Segmented by Age
4.1.1 Explain the meaning of market segmentation,
positioning, target market and niche market
Definition of Market Positioning
 Is the development of a service and a marketing mix to occupy a
specific place in the minds of customers within target markets.
 It is the complex set of perceptions, impressions and feelings
that consumers hold for the product or service compared with
competing product or services.
4.1.1 Explain the meaning of market segmentation,
positioning, target market and niche market
Definition of target market
A set of buyers sharing common needs or characteristics that the
company decide to serve.
4.1.1 Explain the meaning of market segmentation,
positioning, target market and niche market
Definition of niche market
This can be done if the company knows
Created by identifying what a customer wants
what the customer needs and then tries to deliver a better solution
to a problem which was not presented by other firms.

Pasaran niche atau juga dikenali

sebagai pasaran tertumpu
merupakan sebuah segmen
pasaran yang meliputi satu
golongan tertentu dimana
mereka berkongsi minat, hobi,
atau kemahuan yang sama.
Mereka juga boleh ditakrifkan
sebagai satu kumpulan di dalam
sesuatu kelompok geografi.
4.1.2 FACTORS THAT DETERMINE THE SELECTION OF A MARKET SEGMENT

1 Segmenting business
Segmenting or organizational
consumer markets 2
markets
1. TYPES OF SEGMENTING CONSUMER MARKETS

Geographic Demographic Psychographic

Segmentation Segmentation Segmentation

Purpose-of-
Behavior
trip
Segmentation
Segmentation
 Segmenting Consumer Markets
1. Geographic Segmentation:

 Geographic segmentation calls for dividing the market into different

geographic units, such as nations, states, regions, counties, cities, or
neighborhoods.
 Dividing an overall market into homogeneous groups on the basis of their
locations
 Does not ensure that all consumers in a location will make the same buying
decision.
 Help in identifying some general patterns.

9-15
 Segmenting Consumer Markets
2. Demographic
Segmentation:

Demographic
segmentation consists
of dividing the
marketing into groups
based on
demographic variables
such as age, life cycle,
gender, income,
occupation, education,
religion, race, and
nationality.
 Segmenting Consumer Markets
3. Psychographic Segmentation
 Psychographic segmentation divides buyers into different segments based on
social class, lifestyle, or personality characteristics.
 Lifestyle:
People’s decisions about how to live their daily lives, including family, job, social,
and consumer activities
 Segmenting Consumer Markets
4. Behavior Segmentation
In behavioral segmentation, buyers are divided into groups based on their
knowledge, attitude, and use or response to a product.
Partitioning of the market based on attitudes toward or reactions to a product
and to its promotional appeals
a) Occasions
b) Benefits sought
c) User status Pembahagian pasaran berdasarkan sikap
terhadap atau kesan sesuatu produk, dan
d) Usage Rate dengan rayuan promosinya
e) Loyalty Status
f) Buyer Readiness Stage
 Segmenting Consumer Markets
5. Purpose-of-Trip
Segmentation
Recreational purpose (leisure)
a. Holiday,
b. health and sports
c. Religion
d. Study
Business purpose
b. Company business
c. Convention
d. Sales trip
e. Incentive trips
Ex: Businessperson prefer locations close
to their place of business. While on
vacation, these same people look for
logging near attractions.
A market segment should be: READ
ALERT!!!
1. Measurable
measured in terms of sales value or volume (number of customers within the
segment)
Reliable market research to identify the size of a market segment to a reasonable
degree of accuracy
strategists can then decide whether, how, and to what extent they should focus their
efforts on marketing to this segment.

2. Substantial
A viable market segment is usually a homogenous group with clearly defined
characteristics such as age group, socio-economic background and brand
perception.
Longevity is important: no market segmentation expert would recommend focussing
on an unstable customer group that is likely to disperse, or change beyond
recognition within a year or two.

3. Accessible
it is important to consider how the group might be accessed and, crucially, whether
this falls within the strengths and abilities of the company’s marketing department.
Different segments might respond better to outdoor advertising, social media
campaigns, television infomercials, or any number of other approaches.
 READ
ALERT!!!
4. Differentiable:
An ideal market segment should be internally homogeneous (i.e. all
customers within the segment have similar preferences and
characteristics), but externally heterogeneous.
Differences between market segments should be clearly defined, so that
the campaigns, products and marketing tools applied to them can be
implemented without overlap.

5. Actionable: The market segment must have practical value – its

characteristics must provide supporting data for a marketing position or
sales approach, and this in turn must have outcomes that are easily
quantified, ideally in relation to the existing measurements of the market
segment as defined by initial market research.

A good understanding of the principles of market segmentation is an

important building block of your company’s marketing strategy – the
foundation for an efficient, streamlined and ultimately successful approach
to customers, and a means of targeting your products and services
accurately, with the minimum of wastage.
2. Segmenting Business/Organizational Markets
a. Based on Geographical areas
1. Geographic segmentation is a type of market segmentation that groups prospective
customers based on where they live.
2. Market can be divided into: Country, states, districts, zone. North area, south area.
3. People living in the same environment tend to have similar wants and needs, and
geographic segmentation allows marketers to target audiences in a country, city or
region with messaging that appeals to their specific wants and needs
snow shovels will only be
COUNTRIES useful to people living in
in Western countries, pork- snowy areas.
based products are readily POPULATION
embraced – bacon is an DENSITY CITIES
essential part of the English
breakfast. GEOGRAPHIC
SEGMENTATION

warm clothing CLIMATE/

like jackets, VILLAGE
WEATHER
coats, and URBAN/
gloves a lawn mowing service may appeal
RURAL
more to people in the rural areas
who actually have lawns.
2. Segmenting Business/Organizational Markets
b. Based on Business Type
Group into their own group based on their business type.
• Ex: Food outlets, construction companies, shipping
companies etc.
 Segmenting Business/Organizational Markets
c. Based on company size

Usually categorized as small, medium and large based on two

factors which are the number of sales or purchase and the
number of company staff.
Ex: If the company size is large, they are known as the major
account customers. If it is small, they are the minor account
customers.
4.1.3 RELATIONSHIP BETWEEN MARKET SEGMENTATION AND
MARKETING OBJECTIVES

Discrete

Sustainable Measurable

Appropriate Viable
RELATIONSHIP BETWEEN MARKET SEGMENTATION AND MARKETING OBJECTIVES

Discrete (lebih details)

• The selected subgroup must be separated identified by criteria such
as purpose of visit, income, location of residence, or motivation.

Kumpulan kecil yang dipilih mesti dipisahkan

dikenalpasti oleh kriteria seperti tujuan
lawatan , pendapatan, lokasi tempat tinggal,
Measurable (dpt diukur) atau motivasi

• Distinguish the subgroups must be measurable by available

marketing research data or via such new data as can be obtained at
acceptable cost.
Membezakan kumpulan kecil, mesti diukur
oleh data penyelidikan pemasaran yang
disediakan atau melalui data baru seperti
boleh didapati pada kos yang boleh diterima.
Viable (mudah)
• Function of the costs of designing or adapting products for segments,
promoting to target groups and ensuring that perspective customers
can find convenient access to such product once they have been
persuade to buy. Fungsi kos merekabentuk atau menyesuaikan produk untuk
segmen , menggalakkan kepada kumpulan sasar dan
memastikan bahawa pelanggan-pelanggan perspektif boleh
memilih produk yang bersesuaian dan berjaya dipujuk untuk
membeli.
RELATIONSHIP BETWEEN MARKET SEGMENTATION AND MARKETING OBJECTIVES

Appropriate (bersamaan)
• Reflects the inseparability of
service product delivery.
Tidak dapat dipisahkan perkhidmatan
Sustainable dan produk.

• Segment contribute positively or

negatively to the environment mission
of a business.
Segmen menyumbang secara positif atau
negatif kepada misi persekitaran perniagaan.
4.1.4 TARGET MARKET AND NICHE MARKET
TARGET MARKET
a • Segment Size and Growth
Evaluating • Segment structural
market Attractiveness
segment
• Company market Segments

b
Selecting • Undifferentiated Marketing
Market • Differentiated Marketing
Segments • Concentrated Marketing

 Strategy is depends on company

Choosing a resources.
Market  Factors to be considered includes
c Coverage
Strategy product variability, product’s stage
in the life style, market variability
and competitor’s marketing
strategies.
4.1.4 Identify target market and niche market

1. Married adults who vacation with small children have different needs than young
single adults. Club Med developed resorts for families and resorts for couples
without children.
2. Club Med (originally Club Méditerranée) was founded in 1950 in Alcúdia, a tiny
fishing village in the Balearic Islands off the coast of Spain.
3. Its founder, Gérard Blitz, along with Gilbert Trigano, a tent canvas manufacturer,
had the groundbreaking idea of setting up a tented village for sports vacations
with no restrictions in natural outdoor settings.
4. "The aim of life is to be happy and the time to be happy is now:"
4.1.4 Identify target market and niche market
Target market: Your target market is your
ideal client – the person or group of people
you serve. In other words, the group of
people you TARGET with your marketing.
Niche: Your niche on the other hand is
your area of specialty. It’s your service
focus or HOW you help your target market.
 CHARACTERISTICS OF NICHE MARKET

Saiz yang mencukupi Mempunyai potensi Faedah yang amat

dan kuasa membeli pertumbuhan kecil bagi pesaing
yang untung.
1 2 3

Sufficient size and

Negligible interest to
purchasing power to be Has growth potential
major competitors
profitable.

4 5

The firm has defend itself

The firm has the required
skills and resources to
serve
Firma mempunyai
kemahiran dan sumber
untuk berkhidmat yang
diperlukan
against an attacking major
competitor through
customer goodwill it has
built up
Firma mempunyai mempertahankan
diri daripada pesaing menyerang
utama melalui muhibah pelanggan
yang telah membina
 Expanding
Niches
Creating Protecting
Niches Niches

3 TASKS
OF
NICHER
4.1.5 Identify Market Segmentation For Tourism And Hospitality
Products And Services

1. Prestige 2. Escape
Always been attached to
travels.

2. Sexual Means to meet

Opportunity attractive people.

3. Social Meet and interact with

Interaction people.

4. Relaxation Fulfillment for relation.

4.1.5 Identify Market Segmentation For Tourism And
Hospitality Products And Services

Desire to escape from

5. Escape hectic life.

6. Education Have knowledge.

7. Family Family reunion.

Bonding

8. Self-discovery Find “oneself”.

 4.1.6 Predict And Rationalize Potential Future Products Or
Services In Tourism And Hospitality Industry
1. Restrict both INBOUND and OUTBOUND visits. Domestic tourism and travel is set
to EXPLODE.
2. Family travel will boom. The decision makers – ???
3. Activity and experiential vacations will be key.
4. Hotels will take firmer control of room inventory – having best available rates only
on their websites for direct bookings and their own social media platforms. OTA’s
will finally lose their stranglehold on hotel bookings and their huge 25%
commissions.
5. Travel Agents regrettably will see even further business declines in their business
volumes post Corvid-19. Potential travelers will continue to D-I-Y digitally as they
are becoming increasingly computer proficient and savvy surfers.
6. Green travel and care of the environment
7. Business travel and daily commuting will decline as we embrace work-at-home,
corporate business shrink to 4D3N (4 days, 3 nights) during the week and leisure
related business increase to 3D2N.
8. Video conferencing and webinars will increase but face-to-face meetings and
conferences along with trade shows and congresses will survive.
9. As domestic and family travel grows, 5-star hotel occupancies will decline. Mid
range hotels will see the fastest growth.