THE TOURIST MARKET

AND SEGMENTATION
 REMINDER!

The use of mobile phones is

strictly prohibited.
 OBJECTIVE
S
At the end of the chapter, the students should be able to:
• Define what Marketing is;
• State the three steps to Target Marketing;
• Identify the characteristics of a good product
segment;
• Discuss Market Coverage Strategies and
Positioning; and
• Distinguish the new and emerging markets in
the Philippines.
 MARKETIN
G buyers
A MARKET is a set of actual and potential
of product. These buyers share a particular need
or want that can be satisfied through exchange
relationship.
 NICHE
MARKET
A niche market is the subset of the market on
which a specific product is focused.
3 STEPS TO TARGET
MARKETING

1. Market Segmentation
2. Market Targeting
3. Market Positioning
 Market Segmentation
Market Segmentation is dividing the market into
distinct groups who might require separate
products and/or marketing mixes.
 Market Segmentation
Market Segment – is a subgroup of the total
consumer market who share similar
characteristics and needs relevant to the
purchase of product, service, or experience. Each
segment is profiled based on its characteristics.
Characteristics of Market Segment
1. IDENTIFIABLE – The people who comprise the
segment can be located identified such that
targeting them would be easy.
Characteristics of Market Segment
2. COHESIVE – The customers should be part of a
whole whose specific qualities are common to
all.
Characteristics of Market Segment
3. MEASURABLE – The marketer should be able
to estimate the size and potential spending of
the members of the market segment.
Characteristics of Market Segment
4. ACCESSIBLE – The members of the segment
should be accessed by marketing efforts and
promotional activities to be conducted. If they
are difficult to reach, efforts to reach out to the
specific segment might be futile.
Characteristics of Market Segment
5. SUBSTANCIAL – Segment should be large in
order to be substantial. If the segment is small, it
should have high spending capability to make a
significant impact on the business’ bottom line.
Characteristics of Market Segment
6. ACTIONABLE – The company has enough
resources and commitment to enable effective
penetration of the identified segment to ensure
effective positioning.
 Variables for Segmentation

GEOGRAPHIC

Geographic segmentation divides the market

into different topographic units such as nations,
states, regions, countries, cities, neighborhoods,
barangays, towns, etc.
 Variables for Segmentation
DEMOGRAPHIC
Demographic segmentation refers to segmenting
the market based on variables such as age, life
cycle, gender, income, occupation, education,
religion, and race.
 Variables for Segmentation
PSYCHOGRAPHIC

Psychographic segmentation divides consumers

based on different psychographic profiles such as
social class, lifestyle, and personality
characteristics.
 Variables for Segmentation
A SOCIO ECONOMIC SEGMENTATION
CLASS SOCIAL CLASS INCOME EARNER’S OCCUPATION
A Upper Middle Higher Managerial, administrative or professional.
Class
B Middle Class Immediate Managerial, administrative or professional
C1 Lower Middle Supervisory or clerical and junior managerial
Class administrative or professional
C2 Skilled Working Skilled Manual Workers
Class
D Working Class Semi and unskilled workers
E Non-working class Casual or lowest grade workers, pensioners, and other
who depend on the welfare state for their income.
 Variables for Segmentation

BEHAVIORAL

Behavioral segmentation refers to dividing

groups based on their knowledge, attitude, use
of or response to a product or service.
 Variables for Segmentation
BEHAVIORAL

• Special Occasion Segmentation involves

purchases made based on occasions such as
Mother’s Day, Valentine’s Day, honeymoon,
anniversary, or birthday.
• Buyer may also be grouped according to
benefits they seek such as quality, ambiance,
menu, variety, and price.
 Variables for Segmentation
BEHAVIORAL

• User Status refers to markets segmented

based usage of product such as first time
users, regular users, non-users, potential
users, etc.
• Usage Rate refers to frequency of use
categorized as light, medium, and heavy
users.
 Variables for Segmentation
BEHAVIORAL
• Loyalty Status Segmentation refers to the degree
by which customers are loyal to the brand. Some
buyers just go for the cheapest or most
convenient while other stick to brand
unconditionally
• Buyer Readiness pertains to the different stages
buyers become ready to purchase a product.
These stage range from being unaware, slightly
aware, want to buy, and intend to buy.
 Variables for Segmentation
TECHNOGRAPHIC

Technographic Segmentation refers to the

division between the user and non-user of
technology. The more technological savvy one is,
the more information he gets from the internet.
 MARKET TARGETING

Market Targeting is evaluating each segment’s

attractiveness and selecting one or more of
these market segments in which to operate one’s
business.
 Factors to Consider in
Evaluating Which
Segments Should Be
Targeted
1. Segment Size – refers to the current sales
volume, growth rate, high profit margin.
 Factors to Consider in
Evaluating Which
Segments Should Be
Targeted
2. Attractiveness – refers to the potential impact
of the segment to the company. One that is not
saturated and has few aggressive competitors
would be structurally attractive.
 Factors to Consider in
Evaluating Which
Segments Should Be
Targeted
3. Company objectives and availability of
resources – refers to the main reasons for its
decision making and the available resources the
company will use to make its objectives a reality.
Market Coverage Strategies
1. Undifferentiated Marketing
2. Differentiated Marketing
3. Concentrated Marketing
 ONE ENTIRE
PRODUCT MARKET

Undifferentiated Marketing
In undifferentiated marketing, a company
ignores market segmentation and goes after
entire market with only one market offer. This
looks into what the market has in common and is
designed to reach a huge number of buyers.
 PRODUCT 1 SEGMENT A
PRODUCT 2 SEGMENT B
PRODUCT 3 SEGMENT C

Differentiated Marketing
Differentiated Marketing approaches the market
by targeting several market segments using
separate offers per segment. Companies may
offer several products for different market
segments to capture a bigger chunk of the
market.
 SEGMENT A
COMPANY SEGMENT B

SEGMENT C

Concentrated Marketing
Concentrated marketing is practiced by
companies with limited sources. It pursues
getting a big share of a small market rather than
a small share of a large market. Companies are
able to allot its resources in making its presence
felt in a specific market with greater impact.
 Factors Can Be Considered When
Choosing a Market Coverage Strategy
1. COMPANY RESOURCES – This refers to how
much money and resources the company has
which can be allocated to marketing
 Factors Can Be Considered When
Choosing a Market Coverage Strategy
2. Degree of Product Homogeneity – If products
are standardized and identical, it is more
advisable to go for undifferentiated or
concentrated marketing.
ONE ENTIRE
PRODUCT MARKET

SEGMENT A
COMPANY SEGMENT B

SEGMENT C
 Factors Can Be Considered When
Choosing a Market Coverage Strategy
3. Market Homogeneity – If there is a diverse
market, differentiated marketing is advisable. If
the market has a lot of similarities,
undifferentiated marketing can be used.
 Factors Can Be Considered When
Choosing a Market Coverage Strategy
4. Competitor’s Strategy – It is important to
asses the strategy competitors are using so that
correct strategy can be implemented to counter
their marketing efforts.
 MARKET POSITIONING
Market positioning is developing competitive
positioning for the product and an appropriate
marketing mix.
Positioning has everything to do with the
deliberate way by which marketers would want
to position their product in the consciousness of
its prospective customers. Its goals is to identify
the product’s unique characteristics in a way that
will differentiate it in the marketplace.
 MARKET POSITIONING
UNIQUE SELLING PROPOSITION (USP) is a term
used to identify what makes the product or
service different from others. This USP may
occur due to product’s physical attributes, added
services, personnel, location, or image.
 MARKET POSITIONING
COMPETITIVE ADVANTAGE is the product’s
advantage over competitors, which is gained by
offering greater value either by offering lower
prices or providing more benefits to justify
higher prices.
 MARKET POSITIONING
TOP OF MIND is the highest level of recall that a
brand receives. It means that the brand occupies
the top spot in a counter’s mind.
 TYPES OF MARKET
THE FAMILY MARKETS
3 types of vacation makers within the family
markets:

1. Joint-decision-making families
2. Husband making the decision
3. Wife making the decision
 TYPES OF MARKET
THE FAMILY MARKETS
1. Joint-decision-
making families
plans trips with the
longest period of
time and make use
of the widest range
of information
sources.
 TYPES OF MARKET
THE FAMILY MARKETS
2. Families where the husband
makes the decision for the
vacation destination is
characterized by spouses with
greater age difference. Promotional
activities are directed to the male
spouse; hence, it should emphasize
outdoor recreation. Husband-
dominant families spend the
largest amount of money on their
vacation.
 TYPES OF MARKET
THE FAMILY MARKETS
3. Wife dominant families
form the smallest segment of
the family market. If the wife
makes the decision on
vacations; it is characterized
by short planning duration
and uses the fewest
information sources for
planning. The types of
families spends the least
amount of money.
 TYPES OF MARKET
THE SENIOR MARKETS is also known as the silver
market or third-age tourism. There is a clearly a
high level of demand for travel within the senior
market. They have time, money, and desire to
travel.
 TYPES OF MARKET
THE YOUTH MARKET - Research has shown that
long-distance youth travelers are primarily
experience-seekers collecting unique experiences
that will serve to build their self-identity narratives.
 TYPES OF MARKET
THE YOUTH MARKET
There is a growth of travel participation among the
youth market that is fueled by several factors:
1. Increase participation in higher education
2. Increased travel budgets (parental contribution,
savings, and work)
3. Work and travel combinations
4. The rise of low cost/budget airlines
5. Shorter employment contracts leading to
significant gaps in employment
6. The global rise of internet culture
7. Growth of independent travel guidebooks
 TYPES OF MARKET
THE M.I.C.E. MARKET AND THE BUSINESS
TOURISM
The Meetings, Incentives, conferences and
Exhibitions (MICE) industry is extensively and
rapidly growing. Collectively known as the events
industry, this type of travel is connected but not
limited to business travel.
END OF THE PRESENTATION

THANK YOU!