THE TOURISM MARKET AND
SEGMENTATION
MEMBERS:
Balbuena, Antonio
De la Torre, Ryan
CHAPTER 2 Nazareth, Desiree Mae
Secundo, Julie Ann
2-D
GUESS ME!
Table of Contents
01. 03.
Definition of Market
a Market 05.
Targeting
New and
02. 04. Emerging
Market Market Markets
Segmentation Positioning
Objectives:
At the end of the chapter, the students should be able to:
1. Define what a market is;
2. State the three steps to target marketing;
3. Identify the characteristics of a good market segment;
4. Discuss market coverage strategies and positioning;
and
5. Distinguish the new and emerging markets in the
Philippines.
Introduction
Market coverage strategies and
identifying one's unique selling
proposition and competitive
advantage will greatly contribute to a
successful marketing plan.
A market is a set of actual and
potential buyers of a product.
To marketing professionals, a
market is all actual and potential
buyers of a product or service.
Examples
Students Young adults
Families Couples
Kids Single
Senior Citizens
Low to middle
class consumers
There are three steps to target marketing:
-Market Segmentation
-Market Targeting
-Market Positioning
MARKET SEGMENTATION
-is dividing the market into distinct
groups that might require separate
products and/or marketing mixes.
Each segment is profiled based on its
characteristics.
Characteristics of a Market Segment:
1. Identifiable
2. Cohesive
3. Measurable
4. Accessible
5. Substantial
6. Actionable
1.Identifiable
The people who comprise the segment can
be located and identified such that
targeting them would be easy.
2.Cohesive
The consumers should be part of a
whole whose specific qualities are
common to 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 accessible by the
marketing efforts and promotional
activities to be conducted.
5.Substantial
If the segment is small, it should
have a high spending capability to
make a significant impact on the
business's bottom line.
6.Actionable
The company has enough resources
and commitment to enable effective
penetration of the identified
segment to ensure effective
positioning.
Geographic Demographic
Age
Nations
Life Cycle
States
Gender
Regions
Income
Countries
Occupation
Cities
Education
Neighborhoods
Religion
Barangays
Race
Towns
Psychographic
Behavioral
Special occasions
Benefits
Social class
Sought usage
Lifestyle
Rate user status
Personality
Loyalty status
Buyer readiness
1.Geographic
They divide its target markets into segments by country,
region, and cities, then customizes the menu by local
preferences. These different market segments have very
different preferences and McDonald's does an excellent job of
localizing its products.
2.Demographic
They often target young adults between the age of 15 to 25
by depicting young men or women in their marketing
campaigns.
3.Psychographic
Apple
They utilize psychographic segmentation to create a brand
personality that fits into the perception of their users. With
psychographic data, Apple can communicate luxury,
minimalism, and class to its target audience and also create
marketing strategies for the different psychographic
segments.
4.Behavioral
Starbucks uses behavioral segmentation to target their
regular morning customers with an incentive to get them
back in for another purchase later in the day.
MARKET TARGETING
Market targeting is evaluating each segment’s
attractiveness and selecting one or more of these
market segments in which to operate one’s
business.
THREE FACTORS TO CONSIDER IN EVALUATING
SEGMENTS
-Segment size
-Attractiveness
-Company objectives and
availability of resources
1. Segment size — refers to the current sales volume,
growth rate, and high profit margin.
For example, if the market segment is U.S.
college students, the market size is 20 million as
research shows there are 20 million college
students in the U.S.
2. Attractiveness — refers to the potential impact of the
segment on the company.
Examples:
Market size
Growth rates
Pricing trends
Competition
Overall risk in the industry
3. Company objectives and availability of resources —
refer to the main reasons for its decision-making and the
available resources the company will use to make its
objectives a reality.
Example:
Optimize Brand Positioning
Define brand positioning statement and communication
frameworks by the end of the month so that our team
understands our strategic differentiators from the competition.
MARKET COVERAGE STRATEGIES
In undifferentiated marketing, a company ignores market
segmentation and goes after the entire market with only
one market offer (Kotler et al. 2017).
MARKET COVERAGE STRATEGIES
Differentiated marketing approaches the market by
targeting several market segments using separate offers
per segment.
MARKET COVERAGE STRATEGIES
Concentrated marketing is practiced by companies
with limited resources. It pursues getting a big share
of a small market rather than a small share of a
large market.
FACTORS TO CONSIDER WHEN CHOOSING A MARKET
COVERAGE STRATEGY
-Company’s Resources. Amount of money and resources
the company has which can be allocated to marketing.
-Degree of Product Homogeneity. If products are
standardized and identical, it is more advisable to go for
undifferentiated or concentrated marketing.
-Market Homogeneity. If there is a diverse market,
differentiated marketing is advisable.
-Competitor’s Strategy. It is important to assess the
strategy the competitor is using to be able to counter its
marketing efforts.
MARKET POSITIONING
Market positioning is developing competitive positioning
for the product and an appropriate marketing mix.
A deliberate way by which marketers would want to
position their products in the consciousness of their
prospective customers.
THREE POSITIONING CONCEPTS
1.Unique Selling Proposition
2.Competitive Advantage
3.Top of Mind
UNIQUE SELLING PROPOSITION
USP is a term used to identify what makes the product or
service different from others.
This USP may occur due to the product’s physical
attributes, added services, personnel, location, or image.
COMPETITIVE ADVANTAGE
This is the product’s advantage over its competitors,
which is gained by offering greater value either by
offering lower prices or providing more benefits to justify
higher prices.
TOP OF MIND
It is the highest level of recall that a brand receives.
It means that the brand occupies the top spot in a
consumer’s mind.
The ultimate top-of-mind level a brand can reach is
when it becomes synonymous with the generic (e.g.,
Xerox, Coke, etc.).
POSITIONING STRATEGIES
1. Specific product attributes such as price and special
features can be used to position a product.
2. The product can also be positioned based on its
benefits and the needs the product fills.
3. Positioning the product based on certain classes or
segments of users.
4. A company can decide to position itself against an
existing competitor and present its edge over said
competitor.
NEW AND EMERGING MARKETS
GENERATIONAL TRAVEL MARKETS
Generational segmentation is one of the easiest ways to
segment the travel market.
Using various studies, there are similarities in cohorts’
travel behavior patterns and decision-making.
Generation Characteristics Travel Pattern How to Tap the Market
Portrayed as a "generation of Considered the most lucrative Baby Boomers prefer travel agencies or tour
optimism, exploration and travel market among generations operators.
achievement" due to their sheer size and
affluence. Places importance on the quality of the
Baby Boomers Boomer generation values
accommodation and service, accessibility and
(1946-1964) individual choice, community Boomers, aged 55-75, have an easiness of travel, safety and security, value
involvement, self- average of 27 vacation days a year. for money, tourist information and clealiness.
actualization, and health and
wellness. Cruises are popular with Boomers Boomers are attracted to activities and sites
because of their all-inclusive value. that have cultural and historical themes.
Generation X values Generation X households with
Generation X entrepreneurial spirit, loyalty, children are more likely to travel Generation X travelers are heavy users of
(1965-1980) independence, creativity, and with children than other websites as external information sources.
information generations
Gen Xers are hardworking and
value the quality of work-life They have an average of 26 vacation
Gen Xers enjoy environmental or ecological
balance. days a year as a result of work and
trips. They also desire relaxation-beach
family commitments.
destinations and wellness services can be
Generation X Exposed to a wide array of
offered to this market.
(1965-1980) brands and products, this They like quality, are a major
generation tends to save more market for business travel, and are
They give high importance to word of mouth
compared to other willing to spend.
than a nice brochure.
generations.
Millenials are smart, creative,
optimistic, achievement-
oriented, and tech-savvy.
This generation is seen as the next Word of mouth from friends and relatives
big consumer spending market as influences Generation Y tourist's travel
Because of their community
they make travel their top priority. decision-making.
orientation, they are
Millenials
motivated by "helping others,
(1981-1996) They have an average of 35 vacation The preferred information source of this
improving the environment
(Also called Generation Y) days a year. generation is travel guide books.
and making the world a better
place."
Millenials are most likely to go into Their ideal destinations are Asia and Eastern
debt for travel. Europe.
They are resilient, comitted,
and loyal when dedicated to an
idea, cause, or product.
Generation Z is the largest
cohort alive with over two
billion people globally 26% of Gen Z members, are most heavily influenced
the worlds population. Gen Z is said to have a powerful by social media.
influence on family holidays as their
They has been raised with the parents prefer to consult them They are likely to book hotels based on free
changes caused by the before booking trips. Internet access.
Generation Z Internet, smartphones,
(1997-2012) available network, and digital They have an average of 29 vacation Gen Z travelers are open-minded, bucket list
(Also called Zennials) media. days per year. oriented, and look for off-the-beaten-path
locations.
Zennials are highly educated, This generation are budget concious
socially and environmentally and usually begin their travel When planning a trip, Zennials are mindful of
aware, creative, innovative, without a set destination in mind. the planet and the effects of their travel
and able to multitask in decisions on it.
progressively changing
environments.
Types of Markets:
-Family market
-The senior market
-The youth market
-MICE (Meetings, Incentives, Conference, and Events)
-Business market
-Solo travel market
-LGBTQ+
-Bleisure (business and leisure)
-Wellness markets.
THE FAMILY MARKET
There are three types of vacation decision-makers within the family market: (1) joint
decision-making families, (2) husband making the decision, and (3) wife making the
decision.
Joint decision-making families plan trips withg with the longest period of time and
make use of the widest range of information sources.
Families where the husband makes the decision for the vacation destination are
characterized by spouses with greater age differences. Husband-dominant families
spend the largest amount of money on their vacations.
Wife dominant families form the smallest segment of the family market. If the wife
makes the decision on vacations, it is characterized by a short planning duration taht
uses the fewest information sources for planning.
THE SENIOR MARKET
Also known as the "silver market" or "third-age tourism".
This market also goes by other names such as the mature market,
retirees, or empty nesters. There are assumptions that the senior market
is healthier, wealthier, and more active than previous generations of the
same age. However, there is a danger of categorizing the senior market
into one single market.
The Senior Market also has limitations and constraints taht need to
be taken into account when traveling. These factors include safety and
security, health issues, availability, costs, family responsibilities, poor
information about suitable options, and previous experiences.
THE YOUTH MARKET
Research shows that long-distance youth travelers are primarily
experience-seekers, collecting unique experiences that will serve to build
their self-identity narratives.
Seven factors of travel participation among the youth market:
1. Increased participation in higher education.
2. Increased travel budgets (parental contribution, savings, and work)
3. Work and travel combinations
4. The rise of low-cost/budget airlines
5. Shorter employment contracts leading to significant gaps in
employment
6. The global rise of Internet culture
7. Growth of independent travel guidebooks
THE MICE MARKET AND BUSINESS TOURISM
The Meetings, Incentives, Conferences (Conventions), and Exhibitions
(MICE) industry is extensively and rapidly growing. All these events need a
conglomeration of products and services such as transportation,
accommodations, food and beverage, banquet facilities, entertainment, and
shopping.
Conference tourism refers to all activities associated with planning,
travel to, and participation in conferences and meetings, both domestic and
international. Incentive travel comes in the form of a reward for employees
or business partners;hence, luxury is a natural consequence.
Important elements in venue selection for the MICE market:
*cost *size of the conference
*location and accessibility *configuration of the rooms
*time and duration of the conference *destination image
*technical requirements *leisure opportunities
THE SOLO TRAVEL MARKET
This is one of the fastest-growing markets for tourism as shifts in
social structure and lifestyles, such as self-partnering, childless
couples, and later marriages, continously contribute to the massive
change in travel demands. This type of travel market is often
confused with the free independent travelers (FIT) who are known to
travel with self-booked itineraries and do not join traditional guide
tours. Solo travelers prefer freedom and flexibility but in a more
structured and organized style.
THE LGBTQ+ MARKET
According to the International LGBTQ+ Travel Association
(IGLTA), LGBT tourism refers to the development and marketing of
tourism products and services to lesbian, gay, bisexual, or
transgender people. This market is recognized as a segment taht
travels with greater frequency and higher-than-average spending
patterns.
More than product development and marketing, travel
service providers, such as airlines and hotel chains, sought to assure
the LGBT people who are engaging and participating in tourism
activities that they are welcome and respected.
THE BLEISURE MARKET (BUSINESS AND LEISURE)
It is the blending of business and leisure tourism as
travelers extend their business visit with a leisure trip. It is said
that this trend has two components: (1) spouses or children tag
along on trips for a few days of family fun and (2) lone leisure and
sports activities often by younger travelers.
The leading factors in extending for bleisure depend on the
destination's great entertainment and its "bucket list" or must-
visit sites. Natural and historicak sightseeing also appeal to this
market.
WELLNESS TOURISM
The Global Wellness Institue defines wellness tourism as
travel with the pursuit of maintaining or enhancing one's personal
holistic wellbeing-balance of the physical, mental, emotional, and
spiritual domains of human life.
Wellness tourists can be further classified into two: primary
wellness traveler, a traveler whose choice is primarily motivated
by wellness, and secondary wellness traveler, a traveler who seeks
to maintain wellness while traveling or who participates in
wellness experiences while taking any type of trip for leisure or
business.
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TOURISM AND HOSPITALITY MARKETING
MARIA CRISELDA G. GATCHALIAN-BADILLA, PhD
2021
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Thank You!
Group 1 Presentation
