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Market segmentation for travel and tourism markets

Market segmentation recognizes that people differ in
their tastes, needs, attitudes, lifestyles, family size and
composition, etc. . . . It is a deliberate policy of
maximizing market demand by directing marketing
efforts at significant sub-groups of customers or consumers.
(Chisnall, 1985: 264)

As stresses that a key role of marketing managers is to
influence and, wherever possible, to manage demand: ‘The
more an organization knows about its customers and prospective
customers – their needs and desires, their attitudes and
behaviour – the better it will be able to design and implement
the marketing efforts required to stimulate their purchasing
decisions.’ This article explains that market segmentation is
the process whereby businesses organize their knowledge of
current and potential customer groups and select for particular
attention those whose needs and wants they are best able to
supply with their products, both now and in the future.
In other words, because it is increasingly impossible to deal
with all customers on a mass consumption or ‘one size fits all
basis,’ market segmentation is the practical expression in
business of the theory of consumer orientation. It is arguably the
most important of all the practical marketing techniques
available to marketing managers in travel and tourism. It is
normally the logical first step in the marketing process involved
in developing products to meet customers’ needs. Segmentation
is also the necessary first stage in the process of setting precise marketing
objectives and targets and the basis for effective planning, budgeting and
control of marketing activities. It is the basis for positioning, branding
and communicating relevant images to targeted users.
In practice, apart from national tourism organizations, no individual
business is ever likely to be much concerned with the whole or even
many of a country’s tourist markets. They will usually be closely
concerned with particular subgroups of visitors within the total market or
segments, which they identify as the most productive targets for their
marketing activities. National tourism organizations also find it necessary
to segment the total market of potential tourists in order to carry out the
specific marketing campaigns they organize, although they may have to
provide facilities, such as information services, for all visitors.
This article is in three parts. The first part introduces the wide range
of segments that typically exist for most producers of travel and tourism
products. The second part defines the process of segmentation and
outlines the criteria to be applied to any grouping of customers. The third
part describes the principal ways used in travel and tourism to divide up
markets for marketing purposes.

Multiple segments for producers in travel and tourism
Before considering the techniques used to segment markets we list below
an indication of the wide range of subgroups with which businesses in
the different sectors of the travel and tourism industry are concerned. The
list notes five broad consumer segments for each of the main sectors
identified (excluding destination organizations that must
have regard to all segments):

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