Hello Future Tourism Expert!

Welcome to one of the most important parts of destination marketing: understanding exactly who you are trying to attract! Don't worry if this sounds complicated. Market segmentation is just a fancy way of saying: "You can't sell the same holiday to everyone, so let's find the best customers for our destination."

This chapter (5.5) explains how destinations divide the huge travel market into smaller, manageable groups and then choose which groups to focus their marketing efforts on. This process saves money and makes promotions much more effective.

Ready? Let's dive in!

Market Segmentation and Targeting (Syllabus 5.5)

1. Understanding Market Segmentation

Market Segmentation is the process of dividing the total potential market for a travel product or destination into smaller groups (or segments) with similar characteristics, needs, and behaviours.

Analogy: Imagine you are fishing. Instead of throwing one giant net hoping to catch everything (which is inefficient), you use different, smaller nets specifically designed to catch certain types of fish. Each "type of fish" is a market segment.

Targeting is the decision about which specific segment(s) a destination will focus its marketing resources on, based on their potential for profit and compatibility with the destination’s features.

Quick Review: Segmentation is dividing; Targeting is choosing.

2. Different Ways to Segment the Market (The Segmentation Variables)

Destinations use several key variables to sort tourists. You need to know these three main categories:

(a) Geographic Segmentation
This divides the market based on where the tourist lives or the region they travel to.

This includes factors like:

Locality, Area or Region: Tourists from nearby areas may prefer short breaks.
Domestic Tourists: Residents travelling within their own country (often easier to target via local media).
Inbound Visitors: Tourists arriving from other countries (require international marketing efforts).

Example: Marketing ski resorts heavily in regions that experience cold, snowy winters is a Geographic approach. Marketing a city museum only to local residents is targeting the 'locality' segment.

(b) Demographic Segmentation
This divides the market based on measurable, statistical characteristics of the population. These are the ‘facts’ about people.

Age and Gender: E.g., Adventure travel for younger adults; quiet cruises for older couples.
Ethnicity: Affects cultural needs, dietary requirements, or preferred holiday timing.
Levels of Disposable Income: How much money they have left after paying necessities. This determines if they can afford luxury resorts (high income) or budget hostels (low income).

Did you know? Families (a demographic group defined by household structure) often require accommodation with self-catering facilities and child-friendly activities, a key need that differs from that of couples or business travellers.

(c) Psychographic Segmentation (Lifestyle)
This divides the market based on personality, lifestyle, interests, values, and attitudes. This is about *why* they travel and *what* they believe in.

Lifestyle: Are they active (seek hiking/sports) or relaxed (seek spas/beaches)?
Socio-economic Factors: Related to class, education, and occupation, which influence taste and spending habits.
Interests: Special interest tourists, e.g., golfers, history buffs, bird watchers.
Morals/Values and Attitudes: Tourists who value ethical travel or environmental preservation are targeted by ecotourism products.

Analogy: Demographics tell you *who* has the money (e.g., a 45-year-old high earner). Psychographics tell you *how* they want to spend it (e.g., on a sustainable farm stay, not a chain hotel).

Memory Aid: The Three G-D-Ps of Segmentation

Geographic (Where they live)
Demographic (Statistical Facts)
Psychographic (Personality/Lifestyle)

3. Developing the Product/Service Mix to Target Segments (Syllabus 5.5b)

Once a destination chooses a target market (e.g., high-income ecotourists), it must adjust its offering (the 'product mix') to meet their specific demands.

A. Products, Services, and Facilities

The destination must ensure its core offerings align with the target group:

Example 1: Targeting Business Tourists requires facilities like fast Wi-Fi, conference rooms, and proximity to airports.
Example 2: Targeting Families requires facilities like interconnecting hotel rooms, kids' clubs, and shallow pools.

B. The Relationship with Market Segments (Type, Quality, and Value)

How the destination is positioned affects who is attracted:

Type of Customer: Understanding the tourist's profile ensures the product appeals directly to them (e.g., offering solo tours for independent travellers).
Quality / Economy / Value for Money: Different segments prioritize different things.
Luxury Segment: Prioritizes quality and exclusive service.
Budget Segment: Prioritizes economy (low cost).
Mid-Range Segment: Seeks value for money (good quality for a reasonable price).

Common Mistake to Avoid: A luxury resort shouldn't market itself as 'value for money'—it confuses its high-end target segment!

C. Accessibility

The destination must be physically and practically accessible to the target segment.

If targeting Older Tourists or Specific Needs Tourists, accessibility means wheelchair ramps, clear signage, and accessible transport links.
If targeting Inbound Visitors, accessibility means strong international flight connections and multilingual staff/information.

D. Sustainability

Incorporating sustainable practices is vital, especially when targeting segments that prioritize ethics (a Psychographic factor).

If targeting Ecotourists, the destination must promote local sourcing of food, offer carbon offsetting schemes, and demonstrate efforts in biodiversity protection.
This appeals to their morals/values and helps build a positive brand image and reputation (a key part of destination marketing).

Key Takeaway: Targeting allows a destination to tailor its entire tourism offering—from the type of hotel room to the cleanliness of the air (sustainability)—to maximize appeal to the specific group of tourists who are most likely to visit.