Target Market Segmentation in Travel and Hospitality

Attracting Consumers Through Application of Marketing Mix

Man enjoying the view from the Great Wall of China
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Market segmentation is a technique that groups consumers with similar needs and common buying behaviors into segments. These segments become the basis for targeted marketing, which is a more efficient and effective method of marketing than advertising to the masses. 

A marketing segmentation approach is essentially a customer-centered approach that matches products and offerings to consumer interests.

These adjustments are designed to better match the distinctive attributes and behaviors of segments, or groups, of consumers. 

A market segmentation approach is conducted by following certain fairly standard steps that are designed to understand the correlations patterns among large consumer groups. Segmentation begins by identifying a constellation of metrics that will be used as the basis for determining how to group consumers.

A feature of target market segmentation is the creation of consumer personas or profiles that are used to cluster or group consumers for more effective marketing.

Creating a Consumer Persona or Profile

Consumer personas are pegged to distinct market segments identified through the segmentation processes. The use of consumer personas and market sub-segments requires a balancing act of using fine-grained filters while avoiding discriminations that are too fine. Conceptually, consumer personas and sub-segments help businesses to reconcile consumer needs and desires with the limited resources of the firm.

 

Demographic information is typically included in the segmentation metrics. The most common demographics include attributes such as age, gender, level of education, household income, area of residence, and so on. Obtaining more detailed information about consumers strengthens the segmentation process, generally improving the success of the ultimate marketing campaign.

Examples of Two Consumer Profiles for Couples Traveling to Barcelona

Ambassadors of Architecture

The consumers in this group are young, newly married, university graduates, traveling on their honeymoon. They are seeking romance and luxury on a budget. Their travel plans include spending time together, indulging in quality walking sightseeing tours and following their passion, which is the architecture of Antoni Gaudi.

Gallery Gazers and Gourmet Grazers

The consumers in this group are keenly interested in visiting the art galleries in Barcelona and, are particularly fond of the work of Picasso. Since they enjoy regional foods, they are interested in the internationally renowned restaurants in the city. Because the couple in this profile are of upper-middle age, they plan to avoid climbing stairs and walking long distances. They prefer public transport and taxicabs to travel to the sights of Barcelona. They are considering some guided tours to locations just outside of Barcelona.

Rationale for Selected Sites

When selecting the accommodations, sights, and destinations for the travelers’ itinerary, components of the marketing mix were considered. For each choice of the excursions, one or more of the 7Ps of marketing was found to be more relevant than other components of the marketing mix.

Note that not all of the following components can easily be linked to an excursion choice: Product, place and time, price, promotion and education, process, physical environment, people.

For the choice of hotel accommodations, the most relevant attributes were physical environment, price, product, and people. Many travelers look for a relationship with their hoteliers and loyalty is highly rewarded in the hotel industry. The hotel booked for the customers was one of their favorite European hotel chains: Mandarin Oriental Hotel. Sights and destinations are typically selected by travel agents and travelers based on price, promotion, and education, with many of the choices free for viewing from the outside.

According to Philip Kotler,

“A marketing mix is the mixture of controllable marketing variables that the firm uses to pursue the sought level of sales in the target market.” 

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