Chapter 2 Market Segmentation and the Hospitality Industry Segmentation 20… · Psychographic...
Transcript of Chapter 2 Market Segmentation and the Hospitality Industry Segmentation 20… · Psychographic...
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Chapter 2
Market Segmentation and the
Hospitality Industry
Marketing in the Hospitality Industry
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Outline
• Know the reason why we need to segment markets
• Describe the value of each segmentation for
marketing in the hospitality industry (geographic,
demographic, psychographic, benefit and need, etc.)
• How each can be applied to the hospitality industry
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What is Marketing Segmentation ?
a process of dividing the market into different groups of consumers who have common needs and wants.
Marketing Segmentation
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What is Target Marketing ?
• Target marketing is the process of evaluating each
segment’s attractiveness and selecting one or more of the
market segments.
• Positioning is the process of developing competitive
positioning for the product and an appropriate market mix.
Segments Target Position
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Why need Segmentation?
• Market segmentation not only helps us understand
what people want in a product or service, it also
gives a good idea of the price they are willing to
pay and where they want to be served.
• Segmentation offers an opportunity to make more
effective use of promotional media by identifying
those that can reach the target markets effectively.
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Types of Segmentation
Geographic Segmentation
Demographic Segmentation
Benefit & Need Segmentation
Psychographic Segmentation
Price Segmentation
Combining Segmentation
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Group work
• Discuss with you team members about the segmentation you are going to give a presentation
• For example, demographic segmentation
- Write down keywords on the whitepaper
- Describe what demographic segmentation is
-How valuable it’s going be.
• Time: 20 minutes
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What Is Geographic
Segmentation? The division of a market generally by:
• Region
• Zone
• State
• District
• Metropolitan statistical area
• Postal code zones (zip codes)
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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.
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Regions: Established geographic subdivisions of a country. Natural borders often define
• Example: the western region, the area of the United States west of the Rocky Mts.
Zones: Geographic areas smaller than a region (determined by individual companies)
• Example: the Illinois-Wisconsin zone
Districts: Geographic areas with a concentration of customers; subdivisions of a zone
• Example: Chicago, La Crosse could be districts in an Illinois-Wisconsin zone
Regions, Zones, and Districts
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Feeder Cities
• Principal cities within a region that tend to feed travel to each other.
• Example: Las Vegas, Phoenix, and San Francisco, feed Los Angeles.
City Pairs
• Cities between which a heavy travel pattern exists.
• Examples: Boston and NYC, Shanghai and Pairs
Feeder Cities and City Pairs
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Destination Cities and
Destination Markets Destination Cities: have unique attractions unto themselves that
create demand for travel
Examples:
Orlando, Las Vegas, Acapulco, West Palm Beach, Lake Tahoe,
Atlantic City
Destination Markets: create demand for travel not only with
unique attractions they offer, but also with their many centers
of business and commerce
Examples:
New York City, Los Angeles
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Demographic Segmentation
Demographic segmentation: the categorization of
consumers by like characteristics, such as the following:
Sex
Age
Income
Home ownership
Marital status
Occupation
Education
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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, the
factors they hope to avoid)
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Benefit and need segmentation
• Customer segments are categories of
customers who use hotels for identical
reasons and have consumption habits that are
mainly similar
(user status: first time user, frequency user,
potential user, occasion when, how, and why
consumer use an operation)
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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
•AIO (Activities, interests and opinions)
•QSC( Quality, service and cleanliness)
•VALS (Values and Lifestyles)
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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.
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Combining Segmentation
Techniques & Value
• Each of the segmentation approaches has
its advantages and limitations.
• Price sensitivity is always important
• Good quality at a fair price
• Every demographic, psychographic and
economic indicator points to a VALUE as
a key need that marketing must fulfill in
the future.
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Group Homework submit by email
before Sunday May 16, 5 PM
• Background: one five star hotel in downtown will
open a new Italian restaurant soon.
• Using the different market segmentation:
geographic, demographic benefit and need,
psychographic and combining segmentation to
design a market research form to seeking potential
consumer for the restaurant. (Minimum 15
questions)