Travel Reference
In-Depth Information
15
Market segmentation
approaches in tourism
Sara Dolnicar
The role of market segmentation in marketing planning
Marketing planning is widely acknowledged as critical to the success of organizations.
Marketing planning is a process organizations go through which follows a logical sequence
and leads to the formulation of objectives, strategies and tactics (McDonald 1982). Denison and
McDonald (1995) showed that marketing planning in outstanding organizations occurs at three
levels: the cultural level which refl ects an organization's values and benefi ts, the strategic level
which includes decisions about long-term directions and typically involves the use of tools such
as market segmentation and product positioning and the tactical level at which the organization
plans how to best use the marketing toolbox (product, price, promotion and place) to achieve
their strategic aims (McDonald 1996).
The marketing planning process is illustrated in
Figure 15.1
.
It is critical to understand that
culture sets the basis for any subsequent strategic marketing planning which, in turn, sets the basis
for tactical marketing planning. In practice this is often forgotten and organizations busily prepare
tactical marketing plans (where to advertise, what promotions to offer etc.) without knowing
what exactly they are aiming for in the long term. This is highly ineffi cient because products and
services are being developed, but it is unclear which tourists they should be customized to,
advertisements are being aired, but it is unclear who they are targeted at, which image of the
destination they should be conveying and how they should be differentiating the destination
from other destinations.
Tactical marketing efforts are much more effective if based on strategy. If a destination, for
example, chooses to target families as their key segment, and comes to the conclusion during the
strategic planning process that it is uniquely suited to serve this segment because of the many
attractions available for children, most tactical marketing decisions follow logically (packages
could be developed for families including entry to attractions of interest to children,
accommodation in child friendly hotels, advertisements are likely to emphasize how much fun a
family would have at the destination, pricing would refl ect family package deals and media
planning would ensure that families would be exposed to advertisements). Such targeted tactical
marketing means that marketing activities 'wasted' on tourists who are unlikely to visit the
destination can be avoided, while at the same time communicating a perfectly customized
product at the right price using the right communication channels with the right advertising
