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.