2/23/2020

“The mythological, homogeneous

Chapter 8 America is gone. We are a
mosaic of minorities.”
Market
Segmentation, -Joel Weiner
Targeting, and
Positioning

©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition ©2006 Pearson Education, Inc. Marketing
Marketing
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for Hospitality
and Tourism,
and Tourism,
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Chapter Objectives Chapter Objectives

• Explain market segmentation and • Outline the process of evaluating
identify several possible bases for market segments
segmenting markets
• Illustrate the concept of positioning for
• List and distinguish among the competitive advantage
requirements for effective segmentation
• Discuss choosing and implementing a
positioning strategy
©2006 Pearson Education, Inc. Marketing
Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
4th edition ©2006 Pearson Education, Inc. Marketing
Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
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Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

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Markets Stages of Marketing

• Mass marketing
• A market is all actual and potential
buyers of a product or service • Product-variety marketing
• Target marketing
• Micromarketing
• Customized marketing

©2006 Pearson Education, Inc. Marketing

Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
4th edition ©2006 Pearson Education, Inc. Marketing
Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

Market Segmentation Geographic Segmentation

• Geographic Segmentation
• Dividing the market into different
geographic units

• Demographic Segmentation – Nations

– States
– Regions
• Psychographic Segmentation
– Counties
– Cities
• Behavior Segmentation – Neighborhoods
©2006 Pearson Education, Inc. Marketing
Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
4th edition ©2006 Pearson Education, Inc. Marketing
Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

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Demographic Segmentation Psychographic Segmentation

• Dividing the market into groups based • Dividing buyers into different groups
on demographic variables based on social class, lifestyle, and
– Age personality characteristics
– Gender
– Income
– Occupation

©2006 Pearson Education, Inc. Marketing

Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
4th edition ©2006 Pearson Education, Inc. Marketing
Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

Behavior Segmentation Requirements for Effective

• Buyers are divided into groups based on their
Segmentation
knowledge, attitude, and use or response to a
product • Measurability
• The best starting point for building market segments
• Types • Accessibility
– Special occasion segmentation
– Benefits sought
• Substantiality
– User status • Actionability
– Usage rate
– Loyalty status
– Buyer readiness stage

©2006 Pearson Education, Inc. Marketing

Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
4th edition ©2006 Pearson Education, Inc. Marketing
Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
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Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

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 2/23/2020

Requirements for Effective

Market Targeting
Segmentation
• Evaluating Market Segments
• Size, purchasing power, profiles
Measurable of segments can be measured.

Accessible
• Segments can be effectively
reached and served. • Selecting Market Segments
• Segments are large or profitable
Substantial enough to serve.

• Effective programs can be • Choosing a Market-Coverage Strategy

designed to attract and serve
Actionable
the segments.

©2006 Pearson Education, Inc. Marketing

Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
4th edition ©2006 Pearson Education, Inc. Marketing
Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

Evaluating Market
Selecting Market Segments
Segments
• Undifferentiated Marketing
• Segment Size and Growth
• Bifurcated Marketing
• Segment Structural Attractiveness
• Differentiated Marketing

• Company Objectives and Resources

• Concentrated Marketing
©2006 Pearson Education, Inc. Marketing
Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
4th edition ©2006 Pearson Education, Inc. Marketing
Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
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Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

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 2/23/2020

Choosing a Market –
Positioning Strategies
Coverage Strategy
• Company resources • Products can be positioned on specific
attributes or against another product
class
• Degree of product homogeneity

• Market homogeneity

• Competitors’ strategies
©2006 Pearson Education, Inc. Marketing
Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
4th edition ©2006 Pearson Education, Inc. Marketing
Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

Choosing and Implementing Product Differentiation

a Positioning Strategy
• Physical Attribute Differentiation
1. Identifying a set of possible competitive
advantages upon which to build a position
• Service Differentiation

2. Selecting the right competitive advantages

• Personnel Differentiation

3. Effectively communicating and delivering

the chosen position to a carefully selected • Location Differentiation
target market
• Image Differentiation
©2006 Pearson Education, Inc. Marketing
Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
4th edition ©2006 Pearson Education, Inc. Marketing
Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

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 2/23/2020

Selecting the Right Selecting the Right

Competitive Advantages Competitive Advantages
• Avoid: • Brand differences should meet the following
– Underpositioning - failing ever to position criteria prior to marketing:
the company at all – Important
– Overpositioning - giving buyers too – Distinctive
narrow a picture of the company – Superior
– Confused positioning - leaving buyers – Communicable
with a confused image of a company – Preemptive
– Affordable
– Profitable
©2006 Pearson Education, Inc. Marketing
Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
4th edition ©2006 Pearson Education, Inc. Marketing
Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

Perceptual Map
Positioning Measurement
• Perceptual mapping is a research tool
used to measure a brand’s position

Positioning map of service level versus price.

(From Christopher Lovelock, Services Marketing, Upper Saddle River, NJ: Prentice Hall, 1996, p.178.)
©2006 Pearson Education, Inc. Marketing
Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
4th edition ©2006 Pearson Education, Inc. Marketing
Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

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 2/23/2020

Best Practices Key Terms

• Carnival Cruise lines • Behavioral segmentation
• Southwest Airlines
• Benefit segmentation

• Competitive advantage

• Competitors’ strategies
©2006 Pearson Education, Inc. Marketing
Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
4th edition ©2006 Pearson Education, Inc. Marketing
Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

Key Terms Key Terms

• Confused positioning • Existing competitor

• Customized marketing • Gender segmentation

• Degree of product homogeneity • Geographic segmentation

• Demographic segmentation • Income segmentation

©2006 Pearson Education, Inc. Marketing
Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
4th edition ©2006 Pearson Education, Inc. Marketing
Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

7
 2/23/2020

Key Terms Key Terms

• Market • Micromarketing
• Market homogeneity • Overpositioning
• Market positioning • Psychographic segmentation
• Market segmentation • Specific product attributes
• Market targeting • Underpositioning

©2006 Pearson Education, Inc. Marketing

Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
4th edition ©2006 Pearson Education, Inc. Marketing
Marketing
for Hospitality
for Hospitality
and Tourism,
and Tourism,
4th edition
4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens