Chapter 7

Tourism Market
Segmentation
and
Targeting

© Dr. Kobby Mensah

Department of Marketing and Customer
Management
 Objectives
• Explaining the fundamentals for market
segmentation and targeting.
• Guiding a way out for tourism market
segmentation and targeting.
• Throwing a focus on strategies useful in
targeting particular segments.
• Identifying few prominent genres of Indian
tourism.
 Market Segmentation
• Identifying and profiling distinct groups of tourists
who might have homogeneous characteristics or
needs, and hence prefer varied genres of tour
packages. Market segmentations can be identified
by examining demographic, psychographic and
behavioural differences among buyers. The firm
then decides which segment presents the greatest
opportunity- whose needs the firm can meet in a
superior fashion.
 Segment Identification, Techniques
& Evaluation
• Segment Identification :- It is done using different criteria like personal
characteristics of the consumer, benefits sought and behavioural measures of the
consumer. Basically multiple segmentation approaches is preferable.

• Segmentation techniques :- to be used depends largely on the type of data

available(metric or non-metric variables) and the kind of dependence observed.
Most common techniques used are factor analysis, cluster analysis, discriminant
analysis and multiple regression . Other techniques cover chi square automatic
detection, LOGIT and log linear modelling .

• Segment Evaluation:- Many thinkers give due importance to segment evaluation

and cover market structure analysis, market opportunity analysis, resource
capabilities analysis and competitive analysis for a complete purview of the
market.
 Levels of Market Segmentation
• Mass Marketing :- It creates a large potential market, which
leads to the lowest cost. But with splintering market patterns,
mass marketing gets more difficult.
• Segment Marketing :- This helps in creating more fine-tuned
product or services offerings, and price it appropriately for
target audience. Choice of distribution channels and
communication channels become much easier. The competition
also gets reduced
• Niche Marketing :- It allows focus on catering to focused and
distinct set of needs. Customers ready to pay premium prices
for offerings. High margins through specializations and
customizations.
 Pattern of Market Segmentation
• Homogeneous Preferences :- Markets where all
customers have roughly the same preferences. This
type of market shows no natural segments.
• Diffused Preferences :- Consumer preferences are
scattered throughout the space. The first movers
benefit can be maximum in this pattern.
• Clustered Preferences :- This type of market reveals
distinct preference clusters- natural market
segments.
 Effective Segmentation
To be useful, market segments must be:
• Measurable:- Size, purchasing power and characteristics of
the segments.
• Substantial:- A segment should b the largest possible
homogeneous group with a tailored marketing programme .
• Accessible:- The segments should be effectively reached and
served.
• Differentiable:- It should be conceptually distinguishable and
respond differently to different marketing mixes.
• Actionable:- Effective programmes for attracting and serving
the segments
 Market Segmentation in Tourism

• Factor-Cluster Segmentation:- It enables to position the

products to specific segments, thereby increasing their
potential profits and reducing the risk associated.
• Common-Sense-Segmentation:- This uses classical
segmentation variables – geographic, psychographic,
demographic and behavioural.
• Importance-Performance Approach:- This is specific to
tourists visiting natural and protected parks, segmenting
them into categories & strategizing accordingly.
 Special Bases for Tourism
Segmentation
• Segmentation based on Customer Expectation:- Based on this
customers can be classified in three groups-
(a) Group 1 – Customers with highest expectation about
complementary activities to be made in the area(Sporting &
Leisure activities)
(b) Group 2 – Customers who do not expect much as group 1
from the complementary activities & do not expect much
regarding the quietness of the location.
(c) Group 3 – Customers with lowest expectations in relation to
complementary activities, but expects most in terms of the
quietness of the location.
 Contd….

• Segmentation based on Customer’s image of

a Destination:- Image can be described as a
perceived mental construct developed by the
customer on the basis of certain impressions
among the flood of total impressions; it
comes into being through a creative process
in which these selected impressions are
elaborated, embellished and ordered.
 Market Targeting

• To select one or more market segments to

cater to their needs. For each chosen target
market, the firm develops a market offering.
The offering is positioned in the minds of the
target buyers as delivering some central
benefits. Accordingly the penetration
strategies and campaigns are designed so the
customer perceives some value out of it.
 Selecting & Entering Market
Segments
• Single-Segment Concentration
• Selective Specialization
• Product Specialization
• Market Specialization
• Full Market Coverage

In targeting more than one segment, close scrutiny

shall be done for segment interrelationships on the
cost, performance and technology side.
 Market Positioning
• To establish and communicate the package/
programme’s distinctive features to the target
market. Positioning is a communication strategy that
is the natural follow-through of market
segmentation and target marketing. This is helpful in
creating a place in the target customer’s mind, so
that they are able to associate themselves with the
product and differentiate it with other offerings
present in the market. It can be referred to as
unique selling proposition of any brand.
 Different Genres : Ghana Tourism

• Adventure Tourism
• Beach Tourism
• Culture Tourism
• EcoTourism
• Heritage Tourism
• Pilgrimage Tourism
• Wildlife Tourism
• Medical Tourism
• MICE(Meetings, Incentives, Conferences and
Exhibitions)