Segmentation Variables
Introduction
Market segmentation is a crucial process in the tourism industry, as it allows organizations to better understand the needs and preferences of their target customers and tailor their offerings accordingly. Segmentation involves dividing a large and diverse market into smaller groups of consumers who have similar needs and characteristics.
There are many different variables that can be used to segment the tourism market, including demographic, psychographic, behavioral, benefit-seeker, trip characteristic, and budget variables. These variables can provide insights into the target market and help organizations to identify opportunities for growth and improve the customer experience.
By using market segmentation, tourism organizations can create more effective marketing campaigns, improve product offerings, and increase customer satisfaction. This can lead to increased demand for travel, increased revenue, and a stronger market position.
Product- Related Variables
Product-related variables are characteristics that describe a product and help to differentiate it from others in the market. These variables are used to segment the market and identify target customers for a particular product or product line.
Some common product-related variables include:
Benefits Sought
Benefits sought refer to the specific reasons why a customer chooses to purchase a particular product or service. Benefits sought help to segment the market and identify target customers for a product or service by understanding the motivations behind their purchasing behavior.
For example, a customer who is looking for a new laptop might be seeking a device with a long battery life, high processing power, and a lightweight design. Another customer might be looking for a laptop with a large display, good graphics capabilities, and a high-quality sound system.
By understanding the benefits sought by different customers, businesses can tailor their marketing messages and product offerings to meet the specific needs and preferences of each target segment. For instance, a company might develop a marketing campaign that emphasizes the long battery life of its laptop for customers who value mobility and convenience, or it might highlight the large display and high-quality sound system for customers who value multimedia capabilities.
Benefits sought can be influenced by a variety of factors, including demographic variables (such as age, gender, and income), psychographic variables (such as personality, values, and interests), and previous purchasing behavior.
Usage Rate
Usage rate refers to the frequency with which a customer uses a particular product or service. It is a product-related variable that can be used to segment the market and identify target customers for a product or service.
For example, a customer who uses a particular type of toothpaste every day is considered a high usage customer, while a customer who uses the same toothpaste only once or twice a week is considered a low usage customer.
Usage rate is an important factor in understanding customer behavior because it can indicate the level of need and importance that a customer places on a particular product or service. High usage customers, for instance, might be more likely to purchase premium versions of a product or to switch to a different brand if they are dissatisfied with their current product.
By understanding the usage rate of different customers, businesses can tailor their marketing messages and product offerings to meet the specific needs and preferences of each target segment. For instance, a company might develop a loyalty program for high usage customers or offer discounts for customers who purchase a product frequently.
Usage rate can be influenced by a variety of factors, including customer needs and preferences, product attributes, and price.
User status
User status refers to the relationship that a customer has with a particular product or service. It is a product-related variable that can be used to segment the market and identify target customers for a product or service.
There are three main types of user status:
- First-time users: Customers who have never used a particular product or service before.
- Repeat users: Customers who have used a product or service before and are likely to use it again in the future.
- Non-users: Customers who have never used a particular product or service and are not likely to do so in the future.
By understanding the user status of different customers, businesses can tailor their marketing messages and product offerings to meet the specific needs and preferences of each target segment. For instance, a company might develop a special promotion for first-time users to encourage them to try a product, or it might offer loyalty rewards for repeat users to keep them coming back.
User status can be influenced by a variety of factors, including customer needs and preferences, product attributes, and previous purchasing behavior. Understanding user status can help businesses to make informed decisions about product development, pricing, and marketing strategies.
Product Attributes
Product attributes refer to the physical characteristics or features of a product that help to differentiate it from other products in the market. Product attributes are a type of product-related variable that can be used to segment the market and identify target customers for a product or service.
Some common product attributes include:
- Size: The physical dimensions of a product, such as its length, width, and height.
- Color: The hue or shade of a product, which can affect its visual appeal and functionality.
- Shape: The form or design of a product, which can impact its aesthetic appeal and usability.
- Material: The materials used to make a product, such as metal, plastic, or glass.
- Functionality: The features and capabilities of a product, such as its performance, reliability, and durability.
- Brand: The reputation and image associated with a particular manufacturer or product line.
By understanding the product attributes that are important to different customers, businesses can tailor their marketing messages and product offerings to meet the specific needs and preferences of each target segment. For instance, a company might develop a marketing campaign that emphasizes the lightweight design of its laptop for customers who value mobility and convenience, or it might highlight the large display and high-quality sound system for customers who value multimedia capabilities.
Product attributes can be influenced by a variety of factors, including customer needs and preferences, technological advancements, and regulatory requirements. Understanding product attributes can help businesses to make informed decisions about product development, pricing, and marketing strategies.
Price
Price refers to the monetary value placed on a product or service. It is a product-related variable that can play a significant role in customer purchasing behavior and can be used to segment the market and identify target customers for a product or service.
Customers often make purchasing decisions based on the price of a product or service relative to its perceived value. For example, a customer might choose to purchase a more expensive laptop because it has better performance and reliability, while another customer might choose a less expensive laptop because it meets their basic needs and is more affordable.
By understanding the price sensitivity of different customers, businesses can tailor their marketing messages and product offerings to meet the specific needs and preferences of each target segment. For instance, a company might offer a lower-priced version of its product for budget-conscious customers, or it might develop a premium product line for customers who are willing to pay more for higher quality and more advanced features.
Price can be influenced by a variety of factors, including the cost of production, competition, customer demand, and the company’s overall pricing strategy. Understanding the role of price in customer purchasing behavior can help businesses to make informed decisions about product development, pricing, and marketing strategies.
Brand loyalty
Brand loyalty refers to the tendency of customers to repeatedly purchase products or services from the same brand over time. It is a product-related variable that can be used to segment the market and identify target customers for a product or service.
Brand loyalty can be driven by a variety of factors, including the quality and reliability of a product, its perceived value, the reputation of the brand, and personal preferences and habits. For example, a customer who has always used a particular brand of toothpaste might continue to do so because they trust the brand and have had positive experiences with its products in the past.
Customers who are loyal to a particular brand are often more resistant to switching to another brand, even if it offers similar products at a lower price. They are also more likely to recommend the brand to others and to make purchases in response to promotions or special offers from the brand.
By understanding the level of brand loyalty among different customers, businesses can tailor their marketing messages and product offerings to meet the specific needs and preferences of each target segment. For instance, a company might offer special discounts or promotions to loyal customers as a way of thanking them for their repeat business, or it might develop new products specifically designed to meet the needs of its most loyal customers.
Brand loyalty can be influenced by a variety of factors, including customer experiences with the brand, marketing and advertising efforts, and competition from other brands. Understanding brand loyalty can help businesses to make informed decisions about product development, pricing, and marketing strategies.
Recreation activity Equipment type Volume usage
Recreation activity equipment type and volume usage are two product-related variables that can be used to segment the market and identify target customers for a specific recreation activity or service.
Recreation Activity Equipment Type
The type of equipment or gear used for a specific recreational activity, such as skiing or golfing, can impact a customer’s experience and preferences. For example, a customer who is a beginner skier might prefer rental equipment, while a more experienced skier might prefer to purchase their own equipment.
Volume Usage
The frequency and amount of use of a product, such as the number of times a customer participates in a recreational activity, can impact customer behavior and preferences. For example, a customer who participates in a recreational activity once a month might have different needs and preferences than a customer who participates several times a week.
By understanding these product-related variables, businesses can tailor their marketing messages and product offerings to meet the specific needs and preferences of each target segment. For instance, a company might offer special deals or packages for customers who frequently participate in a specific recreational activity, or it might offer a variety of equipment options to meet the needs of customers with different levels of experience and skill.
Benefit Expectations Length Of Stay Transportation Mode Experience Preferences Participation Patterns
Benefit expectations, length of stay, transportation mode, experience preferences, and participation patterns are all product-related variables that can be used to segment the market and identify target customers for a product or service.
Benefit expectations: The specific benefits a customer hopes to receive from a product, such as improved health or increased leisure time, can impact purchasing behavior and can be used to segment the market. For example, a customer who is looking for a relaxing vacation experience might have different needs and preferences than a customer who is seeking an adrenaline-fueled adventure.
Length of stay: The duration of a customer’s stay or visit, such as a weekend getaway or a week-long vacation, can impact behavior and preferences and can be used to segment the market. For example, a customer who is taking a weekend getaway might prefer different activities and accommodations than a customer who is taking a week-long vacation.
Transportation mode: The mode of transportation used by a customer, such as driving, flying, or taking public transportation, can impact behavior and preferences and can be used to segment the market. For example, a customer who is taking a road trip might prefer different activities and accommodations than a customer who is flying to their destination.
Experience preferences: The specific experiences a customer hopes to have, such as adventure or relaxation, can impact behavior and preferences and can be used to segment the market. For example, a customer who is seeking an adventurous experience might prefer different activities and accommodations than a customer who is seeking a relaxing experience.
Participation patterns: The patterns or frequency of customer participation in a specific activity, such as regularly attending a sporting event or participating in outdoor recreation, can impact behavior and preferences and can be used to segment the market. For example, a customer who regularly participates in a specific recreational activity might have different needs and preferences than a customer who is trying a new activity for the first time.
By understanding these product-related variables and how they impact customer behavior and preferences, businesses can tailor their marketing messages and product offerings to meet the specific needs and preferences of each target segment. For example, a company might offer special packages for customers who are seeking a specific experience, such as a relaxing weekend getaway, or it might offer discounts for customers who regularly participate in a specific recreational activity, such as kayaking.
Conclusion
Product-related variables such as recreation activity, equipment type, volume usage, brand loyalty, benefit expectations, length of stay, transportation mode, experience preferences, and participation patterns are important considerations for businesses looking to segment their markets and identify target customers for their products or services.
By understanding how these variables impact customer behavior and preferences, businesses can develop more effective marketing strategies and tailor their product offerings to meet the specific needs and wants of each target segment. This can lead to increased customer satisfaction, improved brand loyalty, and increased revenue for the business.
Overall, it’s important for businesses to continuously monitor and assess these product-related variables, as well as other market factors, in order to stay competitive and meet the changing needs and preferences of their customers.