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Chapter Two: Marketing to the Traveling Public. Learning Objectives. Explain the importance of segmenting the tourism market Identify the three major foundations for understanding tourism motivations List and describe the steps involved in segmenting a market

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slide1

Chapter Two:

Marketing to the Traveling Public

Cook: Tourism: The Business of Travel, 3rd edition (c) 2006 Pearson Education, Upper Saddle River, NJ, 07458. All Rights Reserved

learning objectives
Learning Objectives
  • Explain the importance of segmenting the tourism market
  • Identify the three major foundations for understanding tourism motivations
  • List and describe the steps involved in segmenting a market
  • Describe the major approaches that are used to segment the tourism market
  • Discuss the importance of business, mature and international travelers to tourism service suppliers
  • Describe how information gained from segmenting the market can be used to target and meet the wants, needs, and expectations of the traveling public.

Cook: Tourism: The Business of Travel, 3rd edition (c) 2006 Pearson Education, Upper Saddle River, NJ, 07458. All Rights Reserved

introduction
Introduction
  • Center of Tourism Model is Travelers/ Tourists
  • Highly diverse groups with some same and some different needs
  • Important to understand consumer behavior
    • The study of consumer characteristics and the processes involved when individuals or groups select, purchase, and use goods and services to satisfy wants and needs
    • Interpersonal influences, e.g., family
    • Personal characteristics, e.g., age, gender, personality

Cook: Tourism: The Business of Travel, 3rd edition (c) 2006 Pearson Education, Upper Saddle River, NJ, 07458. All Rights Reserved

decisions decisions decisions
Decisions, Decisions, Decisions
  • There are a number of decisions that go into a vacation
  • Tourism suppliers want to provide the information tourists’ desire at the time they desire it
    • How and when do travelers make decisions?
    • How much information is gathered prior to making decisions?

Cook: Tourism: The Business of Travel, 3rd edition (c) 2006 Pearson Education, Upper Saddle River, NJ, 07458. All Rights Reserved

decisions decisions decisions1
Decisions, Decisions, Decisions
  • Information Seeking
    • Internal information search (own memory)
    • External information search
      • Personal sources
      • Non-personal sources
    • Lack of experience, duration, distance, commercial accommodations, group size, and multiple destinations lengthen the information seeking process

Cook: Tourism: The Business of Travel, 3rd edition (c) 2006 Pearson Education, Upper Saddle River, NJ, 07458. All Rights Reserved

decisions decisions decisions2
Decisions, Decisions, Decisions
  • It’s all in the Details
    • Decision making for multi-declinational tend to be sub-destination, followed by travel route, concluding with attractions & activities to participate in
  • Tourism suppliers vary in the type of information needed to provide prospective customers
    • Macro-level, destination marketing
    • Micro-level, individual hotels

Cook: Tourism: The Business of Travel, 3rd edition (c) 2006 Pearson Education, Upper Saddle River, NJ, 07458. All Rights Reserved

foundations for understanding tourism motivations
Foundations for Understanding Tourism Motivations
  • Maslow’s hierarchy of Needs: Physiological to self-actualization
    • Higher order(top three) vs. lower order(bottom two)
    • Lower needs must be satisfied before higher needs become important
    • Lower needs of most consumers in advanced economies have been met
    • Travelers may seek satisfaction of any/all levels of needs when they travel

Cook: Tourism: The Business of Travel, 3rd edition (c) 2006 Pearson Education, Upper Saddle River, NJ, 07458. All Rights Reserved

foundations for understanding tourism motivations continued
Foundations for Understanding Tourism Motivations, continued
  • The Leisure Ladder: Pearce’s hierarchy of tourist needs
    • More detailed and travel specific needs than Maslow
    • Lower order relaxation and bodily needs; higher order needs of stimulation, relationships, self-esteem, development and fulfillment

Cook: Tourism: The Business of Travel, 3rd edition (c) 2006 Pearson Education, Upper Saddle River, NJ, 07458. All Rights Reserved

foundations for understanding tourism motivations continued1
Foundations for Understanding Tourism Motivations, continued
  • The Psychocentric- Allocentric Model; Plog’s Model
    • Use of personality characteristics to understand tourist travel patterns
    • Continuum from allocentrics to psychocentrics
      • Allocentrics- Innovators who seek out new locations and activities
      • Psychocentrics- Tradition-bound travelers who prefer traditionally popular locations and experiencing commonplace activities; desire predictability in their travels
      • Most travelers are somewhere in between innovators and traditionalists

Cook: Tourism: The Business of Travel, 3rd edition (c) 2006 Pearson Education, Upper Saddle River, NJ, 07458. All Rights Reserved

segmenting the tourism market
Segmenting the Tourism Market
  • “You can’t please all the people all the time” is the underlying logic of market segmentation.
    • No average tourist and no average vacation
    • Market segmentation is the process of dividing a large heterogeneous market into two or more smaller homogenous market segments; consumers with similar needs

Cook: Tourism: The Business of Travel, 3rd edition (c) 2006 Pearson Education, Upper Saddle River, NJ, 07458. All Rights Reserved

approaches to segmenting markets
Approaches to Segmenting Markets
  • Geographic Segmentation:
    • Grouping potential tourism customers based on their location
    • Oldest and simplest basis for market segmentation
    • Group by nation, region, state/province, city, neighborhood
    • Common for tourism suppliers to market to a limited region: Time and money involved in traveling often a factor in travel decision making

Cook: Tourism: The Business of Travel, 3rd edition (c) 2006 Pearson Education, Upper Saddle River, NJ, 07458. All Rights Reserved

approaches to segmenting markets continued
Approaches to Segmenting Markets, continued
  • Grouping potential tourism customers based on objective characteristics
  • Most popular basis of segmentation
  • Demographic information routinely collected and widely available
  • Collected by organizations such as Statistics Canada and U.S. Bureau of the Census
  • Demographic Segmentation:

Cook: Tourism: The Business of Travel, 3rd edition (c) 2006 Pearson Education, Upper Saddle River, NJ, 07458. All Rights Reserved

approaches to segmenting markets continued1
Approaches to Segmenting Markets, continued
  • Psychographic segmentation:
    • Grouping potential customers on their lifestyle and personality
    • Lifestyle is the way people live, identified by their activities, interests and opinions (AIOs)
    • Plog’s continuum is pyschographic-based
    • Example: Family Getaway Traveler, Adventurous/Education Traveler, Romantics

Cook: Tourism: The Business of Travel, 3rd edition (c) 2006 Pearson Education, Upper Saddle River, NJ, 07458. All Rights Reserved

approaches to segmenting markets continued2
Approaches to Segmenting Markets, continued
  • Product-related segmentation:
    • Most direct form of segmentation, group people based on their product-specific wants
    • Can be grouped based on benefits sought
    • Can be grouped based on amount of use
    • Can be grouped based on brand loyalty
    • Leisure vs. Business Traveler is use of product-related segmentation

Cook: Tourism: The Business of Travel, 3rd edition (c) 2006 Pearson Education, Upper Saddle River, NJ, 07458. All Rights Reserved

putting segmentation knowledge to work
Putting Segmentation Knowledge to Work
  • There is a cost-effective limit to segmentation
  • Need to consider five factors
    • Can segment be easily identified and measured in terms of of purchasing power and size?
    • Is segment large enough to be potentially profitable?
    • Can segment be reached effectively through advertising and promotion?
    • Is segment interested in the service offered?
    • Is segment likely to grow or shrink in the long term?

Cook: Tourism: The Business of Travel, 3rd edition (c) 2006 Pearson Education, Upper Saddle River, NJ, 07458. All Rights Reserved

specialized tourism segments
Specialized Tourism Segments
  • Business and Professional Travelers
    • Bread and butter of the industry because of price and seasonal fluctuations less common than with leisure travelers
    • Travel tends to be inelastic
    • Globalization has meant an increase in international business travel
    • Third largest expense for corporations

Cook: Tourism: The Business of Travel, 3rd edition (c) 2006 Pearson Education, Upper Saddle River, NJ, 07458. All Rights Reserved

specialized tourism segments continued
Specialized Tourism Segments, continued
  • Incentive Travelers
    • Rewarding employees for good work with all-expense paid trips
    • Research shows free vacation is a more motivating incentive than money
    • These trips are usually first class all of the way and organized by incentive tour operators

Cook: Tourism: The Business of Travel, 3rd edition (c) 2006 Pearson Education, Upper Saddle River, NJ, 07458. All Rights Reserved

specialized tourism segments continued1
Specialized Tourism Segments, continued
  • Mature Travelers
    • Immense market for tourism is population age 55 and older
    • This age group is presently the largest and fastest growing age group in industrialized countries
    • Mature travelers spend more than younger travelers and account for 80 percent of all commercial vacation travel
    • These older adults are wealthier and have more free time than other groups
    • Can be divided in to three segments; sightseers, enthusiastic participants, and family focused

Cook: Tourism: The Business of Travel, 3rd edition (c) 2006 Pearson Education, Upper Saddle River, NJ, 07458. All Rights Reserved

specialized tourism segments continued2
Specialized Tourism Segments, continued
  • Special Interest Travelers
    • Travel in off- season periods providing revenue when businesses need it most
    • Can be divided into three segments; adventure, ecotourism, and sport tourism
    • Travel Industries Association of America estimates that nearly 40% of U.S. adults are sports event travelers

Cook: Tourism: The Business of Travel, 3rd edition (c) 2006 Pearson Education, Upper Saddle River, NJ, 07458. All Rights Reserved

specialized tourism segments continued3
Specialized Tourism Segments, continued
  • Single Travelers
    • A person who lives alone and travels with or without a companion
    • All shapes and sizes
    • Many social trends have increased number of singles
    • Single supplement makes traveling without a companion costly

Cook: Tourism: The Business of Travel, 3rd edition (c) 2006 Pearson Education, Upper Saddle River, NJ, 07458. All Rights Reserved

environmental concerns cut across traveler segment
Environmental Concerns Cut Across Traveler Segment
  • Impact of tourism on the environment, are high on travelers’ minds
  • GeoTourism Study investigated level of support for policies designed to sustain destinations' quality

Cook: Tourism: The Business of Travel, 3rd edition (c) 2006 Pearson Education, Upper Saddle River, NJ, 07458. All Rights Reserved

delivering high service quality
Delivering High Service Quality
  • Must meet customer expectations by satisfying needs
  • Need to provide consistently high-quality service
  • As market becomes more competitive, service quality becomes more critical for success

Cook: Tourism: The Business of Travel, 3rd edition (c) 2006 Pearson Education, Upper Saddle River, NJ, 07458. All Rights Reserved