Chapter 2 Market Segmentation and the Hospitality Industry

Marketing in the Hospitality Industry Fifth Edition (270TXT or 270CIN)

© 2011, Educational Institute

4. Educational Institute (continued) 2 .Competencies for Market Segmentation and the Hospitality Industry 1. Distinguish destination cities from destination markets. © 2011. Explain how feeder cities and city pairs may help focus a company’s marketing efforts. 3. Describe the value of demographic customer profiles for marketing in the hospitality industry. 2. Describe the value of geographic segmentation for marketing in the hospitality industry.

6. Explain how the knowledge gained from benefit and need segmentation can bring hospitality marketers and operations managers into close working relationships. © 2011.Competencies for Market Segmentation and the Hospitality Industry (continued) 5. Explain how combining different market segmentation techniques provides valuable research tools for marketing in today’s hospitality industry. Educational Institute 3 . Describe the value of psychographic segmentation for marketing in the hospitality industry. 7.

What Is Geographic Segmentation? The division of a market generally by: • Region • Zone • State • District • Metropolitan statistical area • Postal code zones (zip codes) © 2011. Educational Institute 4 .

The Value of Establishing Geographic Market Segments It enables marketers to focus the following: • • • • Sales Advertising Public relations Promotional activities … in the most appropriate areas of the country. Educational Institute 5 . © 2011.

the area of the United States west of the Rocky Mts. Example: the western region. and La Crosse could be districts in an Illinois-Wisconsin zone © 2011. Natural borders often define.Regions. Milwaukee. Example: Chicago. Educational Institute 6 . subdivisions of a zone. Example: the Illinois-Wisconsin zone Districts: Geographic areas with a concentration of customers. Zones: Geographic areas smaller than a region (determined by individual companies). and Districts Regions: Established geographic subdivisions of a country. Zones.

and which in turn feed Los Angeles. Phoenix. which feeds Palm Springs. Las Vegas. and NYC © 2011. D. and San Francisco.C. City Pairs: Cities between which a heavy travel pattern exists. Example: Los Angeles. Educational Institute 7 . Examples: Boston and NYC Washington.Feeder Cities and City Pairs Feeder Cities: Principal cities within a region that tend to feed travel to each other..

S. France. Spain 8 © 2011. to Mexico and Latin America Japan to Hawaii and West Coast of U. America Northern Europe to Southern Europe and the Mediterranean West Coast of U.S. North and South U. to Japan and Asia Far East to West Coast of U. Japan to Asia and South Pacific United Kingdom to Germany.S. Educational Institute .S.Some Major World Traffic Flows • • • • • • • • • East Coast of North America to Europe Europe to East Coast of N.

Las Vegas. West Palm Beach. but also with their many centers of business and commerce Examples: New York City. Lake Tahoe. Acapulco. Educational Institute 9 . Los Angeles © 2011.Destination Cities and Destination Markets Destination Cities: have unique attractions unto themselves that create demand for travel Examples: Orlando. Atlantic City Destination Markets: create demand for travel not only with unique attractions they offer.

Educational Institute 10 . such as the following: •Sex •Age •Income •Home ownership •Marital status •Occupation •Education © 2011.Demographic Segmentation Demographic segmentation: the categorization of consumers by like characteristics.

Educational Institute 11 . the factors they hope to avoid) © 2011.Benefit and Need Segmentation Benefit and need segmentation: the categorization of consumers on the basis of the benefits they seek and the needs they expect to satisfy (and. in some cases.

Educational Institute 12 .Psychographic Segmentation Psychographic segmentation: the subdivision of a market based on like needs and psychological motivations of consumer groups •Tends to focus trends into key areas such as activities. interests. and opinions (AIO) © 2011.

© 2011. Educational Institute 13 .Price Segmentation Price segmentation identifies groups of consumers within a market whose purchase of products or services is within the limits of certain dollar amounts.