Current Market Segmentation in Hospitality Industry

 

The need for market segmentation is more prominent in the hospitality industry now due to the rapid changes in customer needs and the vast amount of product offerings Brotherton and wood, (2008). Market segmentation is the act of dividing a market into distinct and meaningful groups of buyers who might merit separate products and/or marketing mixes Solis, (2010). The basis of appraising a hotel or conducting a hotel feasibility study is to understand hotel demand in the market. Durique, (2010) states that For the purpose of demand analysis, the overall market is divided into various segments - commercial, meeting and groups, and leisure/wholesale - based on the nature of travel. The purpose of segmenting the lodging market is to define major types of demand, identify customer characteristics, and estimate future growth trends Solis, (2010).

 Walker and walker (2013) identify attitude, use, or response to a product/ service; buyers’ preferences may vary because of their behavioral differences. According to the product/ service benefits they seek. Therefore, atmosphere and food quality are often highlighted by luxury restaurants in their promotional messages.

Understanding some basic concepts will allow your hospitality operation to become more focused with attainable goals and measurable results Durique (2010).

 The idea of a unique consumer segment is relatively new in the industry, but may yield significant results. By identifying a unique consumer segment, a hotel can focus on and penetrate a non-traditional market. Project business can come in many forms and does not necessarily fit neatly into a traditional market segment.

Walker and walker (2013) say establish the foundation for segmentation in the unique consumer market by using the following categories:

- Geographic - region, size, population, and climate.

- Demographic - age, gender, lifestyle, income, occupation.

- Psychographic - activities, social interest, values.

- Behavioral - features, benefits, usage, loyalty, and occasion.

Understanding the concept of market segmentation is essential to hospitality marketing. Marketers first segment the market prior to selecting specific target markets for their hospitality establishment. Once careful thought has gone into market segmentation, marketers can then identify primary (and secondary) markets they wish to target. A major assumption in the practice of market segmentation is that the marketplace is comprised of heterogeneous groups of buyers Bowie and David (2004), i.e., different groups of people have different needs and wants and, thus, are attracted to different product offerings accordingly.

REFERENCES

Bowie, D and Buttle, F. (2004) Hospitality marketing; an introduction, Oxford: London

Durique, J. (2010) Market Segmentation in Hospitality Industry. [Available at:]http://www.study mode.com/course-notes/market segmentation;07 April 2014.

D’Antonio, S. (2013) market Segmentation, Identify where Hotel Demand comes from, [Available at:]http://www.hvs.com/article/6583/ market segmentation identify where hotel demand comes.

Solis, M. (2010) Hospitality Segmentation: Revenue Adversary Board: [Available at:] http://www.hsmai.org/files/evolving%20dynamics: 07 April 2014.

Walker, J. and Walker, T. (2013) Introduction to Management, (4^th ed); USA: Pearson Education Limited.

Corporate Social Reponsibility in Hospitality Industry

Corporate Social Responsibility in Hospitality Industry

Corporate Social Responsibility involves “achieving commercial success in ways that honor ethical values and respect people, communities, and the natural environment” (Clark 2006; Porter & Kramer 2006). But most of the definitions have to do with business having a positive impact on the community (Redford, 2005) and meeting or exceeding public expectations of good corporate citizenship (Brands that do good, 2003), and redefined CSR by classifying it as ethical or strategic. Ethical CSR is mandatory and means that a firm must obey all laws and avoid doing harm as a result of its business. This could include harm caused by pollution, damaged products, and unfair labor practices. Good laws and governmental policies will often alleviate ethical CSR problems. Caring corporate community service activities can enhance consumers’ perceptions of the business and attract more customers (Brands that do good, 2003). A restaurant may choose to support the arts to grow its business from the after-theatre crowd.  Morale may increase if employees become involved in meaningful corporate volunteer programs, which can increase job satisfaction, which, in turn, can decrease turnover (Lantos, 2002).

Society and business are dependent on each other. Business provides jobs, products, and taxes while society provides workers, consumers, and policies. Neither can survive without the other so it makes sense for business and society to work together for the benefit of both rather than to continue at odds. Business decisions and social policies must be aligned for this to happen (Porter & Kramer, 2006).

The Benefits of Cooperate social responsibility

A good reputation of CSR can draw new customers and workers and help to raise staff morale (Redford, 2005). Doing business with companies that have good CSR reputations is becoming a preference for many consumers (Brands that do good, 2003; Act responsibly, 2003; Clark 2006).

People prefer working for companies that care for the community. People in organizations also seem to enjoy community service, so meeting planners are now incorporating CSR activities at meetings where participants can work together on charitable activities in the community (Scofidio, 2007).

Business and society are dependent upon each other and both must be healthy or neither will thrive into the future.

 

REFFERENCE

Brands that do good also do well. (2003). HSMAI Marketing Review, 20(3), 40.

Clark, S. (2006). Corporate social responsibility: A marketing tool for major hotel brands. HSMAI Marketing Review, 23(1), 42-45.

Lantos, G. P. (2002). The ethicality of altruistic corporate social responsibility. Journal of Consumer Marketing, 19(2), 205.

Porter, M., & Kramer, M. (2006). Strategy & society, the link between competitive advantage and corporate social responsibility. Harvard Business Review, 84(12), 78-92.

Porter, M., & Kramer, M. (2002) .Corporate philanthropy, Harvard Business Review.

Redford, K. (2005). Business brains get a heart. Caterer & Hotelkeeper, 195(4392), 36-39.

 

Scofidio, B. (2007). Incorporate CSR into your meeting. Corporate Meetings & Incentives,

26(11), 6-6.