Travel Reference
In-Depth Information
Figure 15.1
Levels of marketing planning.
message to the chosen target segment, thus increasing the probability of this segment visiting the
destination.
Market segmentation 'consists of viewing a heterogeneous market . . . as a number of smaller
homogeneous markets' (Smith 1956: 6) and forms an integral part of the overall marketing
planning process, specifi cally part of the strategic marketing planning process. It is critical to the
successful implementation of tactical marketing and therefore it is of utmost importance that
market segmentation analyses are conducted correctly by data analysts and understood well by
managers. But are they?
Market segmentation in practice
Market segmentation analysis is commonly used in academic tourism research. Zins (2008) for
example, notes that 5 per cent of articles published in seven key tourism journals between 1986
and 2005 were related to market segmentation. However, a number of authors have noted that
there is a substantial theory-practice divide in market segmentation (Dibb 2005; Greenberg and
McDonald 1989): academic research on market segmentation and the practical use of market
segmentation in industry have little in common. Academic research focuses mainly on the
improvement of algorithms at a level of sophistication rarely used by industry, and often ignores
key conceptual and practical challenges segmentation data analysts and users in industry face.
Users of segmentation studies, on the other hand, appear to blindly trust consulting companies
who conduct segmentation studies for them and then report very basic results without any
warnings about how segmentation results should be interpreted, and perhaps more importantly,
should not
be interpreted. As a consequence, suboptimal segmentation studies are regularly used
as the strategic basis for marketing.
Empirical evidence for the problems with the use of market segmentation in practice has
been provided by Dolnicar and Lazarevski (2009) in an empirical study of 167 Australian
marketing managers who stated that they deal with issues of market segmentation in their day to
day business. The following key insights are derived from this snapshot of industry practice with
respect to market segmentation:
• 40 per cent of participating marketing managers believe that market segmentation is a
computation which follows clear, pre-specifi ed rules. This is incorrect. Rather, market
