Market segmentation is the process of dividing a tourism market into subgroups with similar needs and characteristics in order to develop targeted marketing strategies. Key reasons for segmentation include that the tourism market is too large and diverse otherwise. Common criteria for segmentation include geographic location, demographics, psychographics, and product benefits sought. Benefits of segmentation are understanding customer needs, efficient marketing spending, and precise strategy development.

1. TOURISM MARKET
SEGMENTATION
Prepared by: Ma’am L

2. TOPICS
• MARKET SEGMENTATION
• WHY MARKET IS SEGMENTED
• IDENTIFYING MARKET SEGMENTATION
• BENEFITS OF MARKET SEGMENTATION
• CRITERIA USED FOR DIVIDING MARKET SEGMENTS
• WAYS TO SEGMENT MARKET
• MARKET SEGMENTATION DECISION PROCESS
• SPECIALIZED TOURIST SEGMENTS
• MEASURES FOR TOURIST SATISFACTION

3. MARKET SEGMENTATION
“identifying tourism customers and deciding on
how to meet their wants and needs”
“learn more about the customers”
“making the heterogeneous market into a
homogenous market”

4. MARKET SEGMENTATION
“the process through which potential customers
with similar needs and characteristics are
grouped together so that a tourism
organization can apply marketing strategies
for the selected market segment efficiently”

5. WHY MARKET IS SEGMENTED?
• Travel market is too large to reach efficiently
• Travel market is to diverse to communicate
• Breaking up the market will make it easier to
manage

6. IDENTIFYING MARKET
SEGMENTATION
• WHO – who are in the market segment that we
would like to have?
• WHAT – what are their requirements?
• WHEN –when do we promote to our market
segment?
• WHERE –where do we promote the product?
Through which distribution channel?
• HOW – how do we develop marketing strategies
to reach the market?

7. BENEFITS OF
MARKET SEGMENTATION
• Understand the needs and wants of customers
• Allocate marketing expenses efficiently
• Further develop products or services
• Develop marketing strategies more precisely

8. WAYS TO SEGMENT
THE MARKET
• Location of residence
• Demographics
• Equipment ownership
• Important product attributes
• Lifestyle attributes

9. CRITERIA USED FOR
DIVIDING MARKET SEGMENTS
• Geographic Segmentation – grouping potential
customers based on their location; oldest and
simplest basis for market segmentation
• Psychographic Segmentation – grouping on how
they live, their priorities, their opinions, their
attitudes and their interests
Personality – introvert/extrovert, cognition,
innovativeness

10. CRITERIA USED FOR
DIVIDING MARKET SEGMENTS
• Demographic Segmentation – gender, age, ethnicity,
occupation, educational level, income, household
size and family situation
• Socio-Cultural Segmentation – religion, social class,
family lifestyle, status
• Product-Related Segmentation – benefits people
seek in the good or service, the amount of good or
service used and degree of company loyalty

11. MARKET SEGMENTATION
DECISION PROCESS
1. Select segmentation approach
2. Create detailed profile of segment
3. Forecast market potential of each segment
4. Estimate likely market share of each
segment
5. Decide which segment to target and design
appropriate marketing mix

12. SPECIALIZED
TOURIST SEGMENTS
1. Business and Professional Travelers
-backbone/bread and butter
2. Incentive Travelers
3. SMERF Groups
-Social, Military, Education, Religion and
Fraternal
4. Mature Travelers
5. Special-Interest Travelers

13. MEASURES FOR TOURIST
SATISFACTION

14. MEASURES FOR TOURIST
SATISFACTION
SATISFACTION EQUATION
Actual Service > Expectations =
Actual Service = Expectations =
Actual Service < Expectations =