PGDM TT 1ST Semester 2014

Dr. Jeet Dogra

Topic 1:
Concepts of segmentation, targeting and positioning; Differentiation

Topic 2:
Tourism markets; Tourists types leisure and business travellers

Topic 3:

Tourism consumer behaviour and purchase considerations

Topic 4:
Market research and intelligence

Dr. Jeet Dogra

Concepts of segmentation, targeting & positioning;

Differentiation

Dr. Jeet Dogra

One of the most famous leisure travel brands in the world, Frances Club Mditerrane,
better known as Club Med, has targeted several different customer groups through the years.
Started in 1950 & long a pioneer in the concept of the all-inclusive resort, Club Med
originally used exotic locations, bare-bones accommodations & the advertising theme The
antidote to civilization to target singles, young couples & others seeking sea, sand & a good
time.
Rooms didnt have phones, TVs, fans or locks on the doors. To transcend its hedonistic image
and broaden its clientele, Club Med decided to add family-friendly resort locations & services
in the 1970s. Depending on location, the resorts, known as villages, offer a wide range of
activities, from flying-trapeze clinics to body building to snow skiing. Club Med staff are
called GOs, or Gentil Organisateurs (gracious/nice organizers); clients are called GMs,
or Gentils Membres (gracious/nice guests/members). An informal atmosphere has Gos &
GMs dining, drinking, dancing & playing together.
An attempt to move outside the leisure-travel business to become a broader services
company, proved ill-fated; a series of urban bar/restaurants flopped. Combined with a post9/11 economic recession and increased competition, the failure left Club Med reeling in
20012002.
Under the new leadership of Henri Giscard dEstaing (son of the former president of France),
the company invested hundreds of millions of dollars to move upscale & attract wealthier
customers by crafting a more sophisticated image. For the firms 60th anniversary in 2010,
advertising proclaimed that Club Med was Where Happiness Means the World, which was
backed by an extensive online marketing effort.

Discuss the marketing strategies implemented from time-to-time?

Dr. Jeet Dogra

 Companies cannot connect with all customers in large, broad or

diverse markets.
But they can divide such markets into groups of consumers or
segments with distinct needs and wants.
A company then needs to identify which market segments it can serve
effectively.
This decision requires a keen understanding of consumer behavior and
careful strategic thinking.
To develop the best marketing plans, managers need to understand
what makes each segment unique and different.
Identifying and satisfying the right market segments is often the key
to marketing success.

Dr. Jeet Dogra

 To compete more effectively, many companies are now embracing

target marketing.
Instead of scattering their marketing efforts, theyre focusing on those
consumers they have the greatest chance of satisfying.
Effective target marketing requires that marketers:
Identify and profile distinct groups of buyers who differ in their
needs and wants (market segmentation).
Select one or more market segments to enter (market targeting).
For each target segment, establish and communicate the distinctive
benefit(s) of the companys market offering (market positioning).

Dr. Jeet Dogra

Market

An actual or nominal place where forces of demand and supply

operate and where buyers and sellers interact (directly or through
intermediaries) to trade goods, services or contracts or instruments,
for money or bargain.

Markets include mechanisms or means for

determining price of the traded item

communicating the price information
facilitating deals and transactions
effecting distribution

The market for a particular item is made

up of existing and potential customers
who need it and have the ability and
willingness to pay for it.

Dr. Jeet Dogra

Market Segmentation

The process of defining and subdividing a large homogenous market

into clearly identifiable segments having similar needs, wants, or
demand characteristics.

Its objective is to design a marketing mix (4 Ps) that precisely

matches the expectations of customers in the targeted segment.

Few companies are big enough to supply the needs of an entire

market; most must breakdown the total demand into segments and
choose those that the company is best equipped to handle.

Dr. Jeet Dogra

Market Segmentation

Four basic factors that affect market segmentation are:

clear identification of the segment
measurability of its effective size
its accessibility through promotional efforts
its appropriateness to the policies and resources of the company

Dr. Jeet Dogra

Market Segmentation

The four basic market segmentation-strategies are based on

Behavioral
Demographic
Psychographic (Analysis of consumer lifestyles to create a detailed
customer profile by asking consumers to agree or disagree with
activities, interest, opinion, statements etc.
Geographical differences

Dr. Jeet Dogra

Market Segmentation

The seven ways to segment a market are:

(Source: http://www.udemy.com/blog/types-of-market-segmentation/)

1.
2.
3.
4.
5.
6.
7.

By Products or Services Offered (tangible / intangible)

By Industry (specifications)
By Demographics (differentiate the customer base)
Geographically (areas of operation)
By Profession (super-specializations for value propositions)
By Lifestyle (living structure vis--vis their needs)
By Interest (niche appeal to brand appeal)

Dr. Jeet Dogra

 Dr. Jeet Dogra

Hallmarks personal expression products are sold in more than 41,500 retail outlets
nationwide and account for almost one of every two greeting cards purchased in the United
States. Each year Hallmark produces 19,000 new & redesigned greeting cards & related
products including party goods, gift wrap & ornaments. Its success is due in part to its
vigorous segmentation of the greeting card business. In addition to popular sub-branded card
lines such as the humorous Shoebox Greetings, Hallmark has introduced lines targeting
specific market segments.
Fresh Ink targets 18-to 39-year-old women. Hallmark Warm Wishes offers hundreds of 99cent cards. Hallmarks three ethnic linesMahogany, Sinceramente Hallmark & Tree of Life
target African American, Hispanic & Jewish consumers, respectively. Hallmarks newer
Journeys line of encouragement cards focused on such challenges as fighting cancer, coming
out & battling depression. Specific greeting cards also benefit charities such as (PRODUCT)
RED, UNICEF & the Susan G. Komen Race for the Cure.
Hallmark has also embraced technology. Musical greeting cards incorporate sound clips from
popular movies, TV shows & songs. Online, Hallmark offers e-cards as well as personalized
printed greeting cards that it mails for consumers. For business needs, Hallmark Business
Expressions offers personalized corporate holiday cards & greeting cards for all occasions
and events.

Enlisted the various targeting strategies has implemented in this case?

Dr. Jeet Dogra

Targeting

After segmenting the market based on the different groups and

classes, there is a need to choose the targets.

No one strategy will suit all consumer groups, so being able to develop
specific strategies for the target markets is very important.

There are three general strategies for selecting the target markets:

i.

Undifferentiated Targeting

ii.

Concentrated Targeting

iii. Multi-Segment Targeting

Dr. Jeet Dogra

Targeting

i.

ii.

Undifferentiated Targeting
This approach views the market as one group with no individual
segments, therefore using a single marketing strategy.
This strategy may be useful for a business or product with little
competition where you may not need to tailor strategies for different
preferences.
Concentrated Targeting
This approach focuses on selecting a particular market niche on which
marketing efforts are targeted.
Your firm is focusing on a single segment so you can concentrate on
understanding the needs / wants of that particular market intimately.
Small firms often benefit from this strategy as focusing on one
segment enables them to compete effectively against larger firms.

Dr. Jeet Dogra

Targeting

ii.

Multi-Segment Targeting
This approach is used if you need to focus on two or more well
defined market segments and want to develop different strategies
for them.
Multi segment targeting offers many benefits but can be costly as it
involves greater input from management, increased market research
and increased promotional strategies.

Dr. Jeet Dogra

 Dr. Jeet Dogra

Positioning

Positioning is developing a product and

brand image in the minds of consumers.
It can also include improving a
customer's
perception
about
the
experience, they will have if they
choose to purchase your product or
service.
The business can positively influence
the perceptions of its chosen customer
base through strategic promotional
activities and by carefully defining your
business' marketing mix.

Dr. Jeet Dogra

Positioning

Effective positioning involves a good understanding of competing

products and the benefits that are sought by your target market.
It also requires you to identify a differential advantage with which it
will deliver the required benefits to the market effectively against
the competition.
Business should aim to define themselves in the eyes of their
customers in regards to their competition.

Dr. Jeet Dogra

Differentiation

The process of developing business,

product and service differentiation is
important as it allows to set apart from the
rest of the market.
This can be particularly important where an
extremely competitive market exists or
where there are a limited number of
customers to sell to.
In order to differentiate from the
competition, one need to conduct market
analysis into both what the main players in
the market are doing, as well as what you
could do differently.
You then need to develop a strategy that
takes both of these factors into
consideration.

Dr. Jeet Dogra

Differentiation

Differentiating the business from the competitors is an ongoing process.

One may be able to be innovative and provide products and services
beyond what your competition can initially, however, the competition will
soon catch up.
A business needs to be able to develop and move forward if it wants to
stay ahead of its competitors for a sustained period of time.
Another method of differentiation is to provide a product or service that
is different and innovative or simply of better quality or value.
It is very difficult to differentiate certain products as there is often
little opportunity for variation.
There are a range of factors that you can use to differentiate a product or
service including performance, style, design, functionality, quality, value,
reliability and durability.
Dr. Jeet Dogra

Differentiation

While differentiation can be a useful tool to separate one business from

another, it is important to keep in mind that customers generally don't
like something different for the sake of it.
There is no point in changing your business if the sole reason you are
doing it is to differentiate yourself from the rest of the market.
You need to ensure that what you offer is in some way better than what
the competition provides.

Dr. Jeet Dogra

Target marketing includes three activities: market segmentation, market targeting &
market positioning.
Market segments are large, identifiable groups within a market.
Two bases for segmenting consumer markets are consumer characteristics and
consumer responses.
The major segmentation variables for consumer markets are geographic,
demographic, psychographic, and behavioral. Marketers use them singly or in
combination. Business marketers use all these variables along with operating
variables, purchasing approaches & situational factors.
To be useful, market segments must be measurable, substantial, accessible,
differentiable and actionable.
We can target markets at four main levels: mass, multiple segments, single (or niche)
segment and individuals.
A mass market targeting approach is adopted only by the biggest companies. Many
companies target multiple segments defined in various ways such as various
demographic groups who seek the same product benefit.
A niche is a more narrowly defined group. Globalization and the Internet have made
niche marketing more feasible to many.
More companies now practice individual & mass customization.
The future is likely to see more individual consumers take the initiative in designing
products and brands.
Marketers must choose target markets in a socially responsible manner at all times.
Dr. Jeet Dogra

Tourism Markets;
Tourists types leisure and business travellers

Dr. Jeet Dogra

Concept of Tourism Markets & Tourism Products

Local (indigenous) people selling things to visitors.

These things are usually things that will help the tourist remember visiting
the area / country.
The term indigenous peoples can be used to describe any ethnic group of
people who inhabit a geographic region.

Dr. Jeet Dogra

Concept of Tourism Markets & Tourism Products

A tourist market is very different.

It's a category of tourism, some examples are eco-tourism, adventure
tourism, culinary.
It speaks more to why tourists go to a destination, rather than what they
buy once they get there.

Dr. Jeet Dogra

Concept of Tourism Markets & Tourism Products

Tourism product is a group of components or elements brought together in

a 'bundle' to satisfy the consumer's need.
A tourism product is anything that can be offered for attraction,
acquisition or consumption.
It includes physical objects, services, personalities, places, organizations
and ideas.
Generally, tourism product is
designed as an augmented product,
which is the totality of benefits
that a traveler receives or
experiences in obtaining the
formal product.
People do not buy products,
they buy expectation of benefits.

Dr. Jeet Dogra

Concept of Tourism Markets & Tourism Products

Therefore, tourism product is an amalgam of what a traveler does and
experience during a tour.
The service used and the products purchased during the trip are products.
So, tourism product is and experience of place (Location and people) at a
particular time.
The basics of tourism product formulation are selling experience, which
they cannot get at home.
They buy experience, which is different from everyday's job

Dr. Jeet Dogra

Tourist types Leisure and Business Travellers

Travel undertaken for pleasure and joy.
Leisure travel is travel in which the primary motivation is to take a
vacation from everyday life.
It is often characterized by staying in nice hotels or resorts, relaxing on
beaches or in a room, or going on guided tours and experiencing local
tourist attractions.
Most meals are eaten out when traveling for pleasure and often more
expensive modes of transportation, such as taxis, are used to get around.
Leisure travel is generally seen as the opposite of business travel.

Dr. Jeet Dogra

Tourism consumer behaviour and

purchase considerations

Dr. Jeet Dogra

Source: Choibamroong, T. in Knowledge of Tourists Behavior: A Key Success Factor for Managers in
Tourism Business

Dr. Jeet Dogra

The above figure explains that understanding consumer behavior is a

critical means for succeeding in developing, promoting and selling
tourism products.

Therefore, the knowledge of consumer behavior plays an important role in

tourism planning and marketing activities.

Consumer behavior as the actions a person takes towards purchasing

and using products and services, including the decision-making process
that precedes and determines those actions
(McColl et al, 1994)

Therefore, it is suggested here that in order to become a successful

manager in the tourism industry, managers must be able to identify and
understand consumer needs and wants and subsequently market
programs that will satisfy those mentioned items
(Anon, 1985)

Dr. Jeet Dogra

Given the regard, it becomes clear that consumers behavior is never simple and is
affected by many different factors, especially in globalization era.

Globalization here is described as the growing interdependence &

interconnectedness of the modern world through increased flows of goods,
services, capital, people and information.

It is possible to say that by being influenced by the globalization process, tourists

today have more motivations to travel, which directly affects tourist behavior
(Pembroke, 1996)

Given this fact, it is found that many tourism reliant countries have developed
various tourism products such as spas, natural-based resorts, and ecotourism
destinations in order to supply the changing tourism demands.

In this case, Thailand can be taken as an example. Due to tourism trend in healthconcerned tourism, Thailand has developed many spas and health-based tourism
sites to supply the tourists demands (Circle of Asia, 2003).

This shows an important role of tourist consumer behavior in developing

tourism products.

It is possible to say here that understanding tourist consumer behavior is very

beneficial for developing tourism products in order to supply the tourism
demand.
Dr. Jeet Dogra

Market research and intelligence

Dr. Jeet Dogra

Market research is a well-defined discipline with a long history of application

in the business world.
It takes many different forms, and its ultimate goal is to enhance a firms
understanding of the market and customer, but it is not market intelligence.
Market intelligence is a much broader term that can be defined as an ongoing,
holistic knowledge of all aspects of the marketplace.
One way to visualize market intelligence is to picture a pyramid.
Each face of the pyramid represents an aspect of market intelligence.
The three faces of the pyramid are information, communication and
people/processes.
Each of these faces is built
upon a foundation of basic
capabilities with movement
up the face of the
pyramid representing increasing
capabilities and proficiency.
Market intelligence is the
culmination of each of these
areas at their highest levels.

Dr. Jeet Dogra

Market intelligence is all-encompassing. Data gathering is just one aspect of

market intelligence. It is a key building block for the information face of the
pyramid, but it is not the only building block.

Market intelligence analysis requires different skills versus marketing

research. Market intelligence analysis requires a broad set of analytical skills
including business analysis skills.

It requires integrating a broad array of information, which extends beyond

traditional marketing research data.

The analyst must understand the market, key competitors, the financial
dynamics of the industry and the entire business value chain.

Often, the best market intelligence analysts have a financial or product

management background, whereas many of the best marketing research
analysts come from behavioral science or mathematical backgrounds.

Market intelligence requires integration with all aspects of the business.

Whereas marketing research is highly focused on customers, market analysis

encompasses the entire view of the market and requires integration into the
companies forecasting process, product development process, and other
business systems.
Dr. Jeet Dogra

 Dr. Jeet Dogra

 Dr. Jeet Dogra

Compiled and Edited by:

Dr. Jeet Dogra

Assistant Professor
Indian Institute of Tourism & Travel Management, Gwalior, India
e-mail: jeetdogra@live.com

Dr. Jeet Dogra