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RV Park/Campground Operator’s Manual Chapter 31 Marketing Objectives & Strategies Market Segmentation / how to establish your market segments Marketing Objectives / setting short-term and long-term goals Marketing Strategies / differentiation, segmentation Overview Chapter 29 provided an overview on marketing and Chapter 30 took a look at your current situation as it relates to marketing your RV park/campground (Situational Analysis). Chapter 31 discusses different market segments you may want to attract to your park. In analyzing these markets, consider what your RV park/campground has to offer, your future goals and what potential campers are looking for. Once you have chosen a target group, research their interests, economic history, geographical location, applicable trends and other factors that make the target group unique. Market Segmentation The first step in market segmentation is to divide your target market into specific, identifiable segments. It is impossible to be all things to all people; break your overall market into segments that will have the greatest appeal in your RV park/campground. Dividing your market into segments Divide by the age of potential campers. Where they currently live. What their lifestyles are. By their income levels. By a combination of all these (and any other) factors. RV Park/Campground Operator’s Guide 31 - 1 Chapter 31 – Marketing Objectives & Strategies September 2008 Undoubtedly, the most common way of segmenting a market is by geographic area. There are a number of reasons for this. 1. Behaviour patterns usually vary from region to region. As a result, it is often possible to characterize your campers by the geographic area in which they live. 2. Geographically defined markets are usually easy to measure. 3. Travel statistics are normally broken down by region or area, so they naturally have a geographic base. You can obtain this information from Tourism British Columbia or from the Canadian Tourism Commission (CTC). Geographic segmentation is not always the best way of assessing potential markets, at least, not if it is used on its own. People living in any given geographic area will have wide variances in incomes, interests, age, etc., therefore segment your market in the following ways. Seven approaches to market segmentation 1. 2. 3. 4. 5. 6. 7. Purpose of trip Channel of distribution (or how the camper buys) Socioeconomic or demographic Product-related Psychographic (lifestyle, interests) Geographic Use-frequency or seasonality. Geographic segmentation is only one of the seven approaches to market segmentation. It works most effectively when combined with one or more of the other six. In fact, the more segmentation approaches used, the better the results obtained. Each approach utilized will refine your market to a higher degree. Remember The objective is to divide your market into segments, and to refine each segment in such a way that a high proportion of the people within that segment will respond to your marketing message. RV Park/Campground Operator’s Manual 31 - 2 Chapter 31 – Marketing Objectives & Strategies September 2008 One of the easiest ways to categorize RV park/campground campers is by the type of equipment campers use. Review your records from previous years or survey the type of RVs stored over the winter and summarize the number of trailers, 5th wheels, motor homes, park models, tents, tent trailers, etc. that are on site. Look at the resulting summary and determine who are your “best” campers. Below is a form to help you do this. Market Segmentation Form Vehicle Type Current Campers % For Year Arrived Weekday Arrived Weekend 1-2 Days Stayed 3-5 6-10 11+ Motorhome RV 5th Wheel Park Model Camper Van Truck Camper Tent Trailer/ Pop-Ups Tents Groups Other Other Totals 100% Another way to segment the market is by type of camper, such as families, adults, retirees etc. Whatever the breakdown, determine who you want as campers, and ensure that your facilities match this target. If the current clientele doesn’t match your perceived target market, you may have to rethink your operation. For example, suppose you are marketing an exclusive destination RV resort and placing advertisements in newspapers or on the radio to reach a large audience. Likely only a few people within that large audience would respond to this type of marketing. RV Park/Campground Operator’s Manual 31 - 3 Chapter 31 – Marketing Objectives & Strategies September 2008 You would probably get better results – and at a lower cost – if you reached only that segment of the overall market that is likely to be interested in destination resort vacations with extensive recreational facilities. For a destination RV resort, you might want to segment your overall market by: Income (taking the top 5% of family incomes). Geographic area (within two hour’s driving time of your resort). Lifestyle (aiming at people who have an active, travel-oriented lifestyle and who are willing to spend money). Frequency of use (people who frequently vacation at destination RV resorts). Age (perhaps people over 50). Interest (people who enjoy the recreational activities that your RV resort offers). By defining your target markets in a precise manner, you should be able to identify the kinds of marketing strategies likely to be successful. Below is a list of seven main market segmentation approaches identified above, and for each one a list of the factors on which the segmentation should be based. a. tourism market segmentation approaches 1. Purpose of trip/segmentation pleasure travel touring vacation RV Park/Campground Operator’s Manual This is usually the most effective segmentation approach because the target market is actively seeking the product you offer. 31 - 4 Chapter 31 – Marketing Objectives & Strategies September 2008 2. Channel of distribution segmentation direct customer sales travel agents tour operators tour wholesalers reservation systems provincial tourism marketing organization regional and local tourism associations RV rental agencies on-site rentals This approach is effective in further afield markets that cannot be reached directly at reasonable cost, or where travel trade companies have a market that is closely related to yours. 3. socioeconomic or demographic segmentation age education sex income family size family life cycle home ownership second home ownership race or ethnic group occupation This is a commonly used segmentation approach, as these segments are often easy to reach and information is usually available. 4. product-related segmentation recreational activity equipment participation patterns benefit expectations length of stay RV classification experience preference These are difficult segments to reach, but are well matched to the use of specific products. 5. psychographic segmentation personality traits lifestyle attitudes, interest and opinions motivations RV Park/Campground Operator’s Manual In tourism, this can be an effective segmentation approach, since tourism product use is extensive among certain psychographic groups. Also, many advertising media are segmented in this way. 31 - 5 Chapter 31 – Marketing Objectives & Strategies September 2008 6. geographic segmentation country state or province region urban, suburban or rural city size population density This is the most common segmentation approach because these markets are clearly defined and accessible. It is often not an efficient approach, unless used in combination with other approaches. 7. use frequency / seasonality segmentation heavy users moderate users infrequent users Data should be readily available on these campers, therefore cost-effective. b. ranking your market segments So far, it has been assumed that all the market segments you identify are of equal importance but, of course, this almost certainly will not be the case. Prioritize the segments in order of importance. To be important, a market segment must offer the potential of a satisfactory return on your investment and effort. In addition, it must be: Measurable: You should be able to measure the size of your targeted segment, so that a reasonable estimate of potential business can be made. Accessible: You must be able to reach the target market segment through promotion. Also, campers in the market segment must be able to reach you, and to make reservations. Substantial: The targeted market segment must be large enough to justify the expense of marketing. Defensible: You should be able to demonstrate that the characteristics of the market segment are sufficiently unusual to justify a special marketing program. Durable: There must be some expectation that the market segment will remain viable over a reasonable period of time; it should not be based on a fad. Competitive: You should be able to demonstrate a definite advantage over your competitors in serving the needs and wants of the targeted market segment. The next step is to assess each of your market segments against these criteria, and to arrange the segments in order of their relative importance to your business. RV Park/Campground Operator’s Manual 31 - 6 Chapter 31 – Marketing Objectives & Strategies September 2008 Setting Marketing Objectives Once you have identified your market segments and put them into their order of priority you will be in a position to establish your marketing objectives for each of those market segments. As a rule, your marketing objectives should be: specific stated in terms of desired results expressed in quantitative terms, so that actual results can be measured achievable within a specified period of time (preferably within one year). There are two goals – short-term goals and long-term goals – to establish for your RV park/campground business: 1. Short-term goals Realistically what can be met in a relatively short period of time, usually a year or less. Examples of short-term goals Increase site rentals by ___%. Make a physical improvement to the campsites. Offer a new service. 2. Long-term goals Specifically what you want to do and where you want your RV park/campground to be in one to five years. Examples of long-term goals Major physical improvements to the RV park/campground. Incentives for increasing shoulder and off-season business. Expansion of facilities or acquiring new land. Establishing a regional or national reputation. Your marketing objectives should not be based on last year’s results; instead, they should be based on your situation analysis. For example, suppose you operate an RV park/campground in a small, urban community and identified your most important market segment is a transient and repeat enroute market. RV Park/Campground Operator’s Manual 31 - 7 Chapter 31 – Marketing Objectives & Strategies September 2008 The situation analysis may identify you are the only RV park/campground in the area with pullthrough sites and a children’s playground and these unique selling points (USPs) have not been promoted. Your marketing objective for the above important segment might therefore be to generate a 17% increase in business during the camping season. This kind of objective should be set for each of your market segments and relate closely to the intended market. Selecting Marketing Strategies Once you have set marketing objectives for each of your market segments, then decide on marketing strategies to achieve the objectives you have set. Determining a marketing strategy for each of your marketing objectives involves three kinds of strategies: differentiation, segmentation and differentiation/segmentation. Differentiation This strategy emphasizes the differences between your RV park/campground and your competitors’. For example, your RV park/campground’s location, services or facilities may have certain unique selling points, or USPs, and with a differentiation strategy, these would be highlighted in your marketing programs. Segmentation This strategy aims at certain well-defined target market groups, or segments. For example, if you are aiming at those campers who are interested in recreational activities, then emphasize the recreational facilities offered. If you are aiming at people who are price conscious, then stress your moderate prices and the value for money offered. In other words, the market segment determines the strategy you are trying to reach. Differentiation/ Segmentation As the name suggests, this is a combination of the differentiation and segmentation approaches. After determining which market segments offer you the most potential, then emphasize your USPs to those market segments. Strategies will change over time. Your marketing strategy must be flexible to adjust to new challenges and trends. RV Park/Campground Operator’s Manual 31 - 8 Chapter 31 – Marketing Objectives & Strategies September 2008 Market Positioning No matter which of the three strategies you choose, ensure that it takes into account your market positioning, i.e. the market niche that your RV park/campground caters to, and the way you differentiate it from your competitors’. Useful tip It is essential to promote a market position, but you must also be able to ‘deliver’ that position when your campers arrive. For example, if you advertise the best beach in town, ensure that it is. Positioning statements are usually short and catchy, and are featured in nearly all promotional materials. Exaggerated claims should be avoided, but simple effective phrases can be used. Marketing Activities In Chapter 29, positioning was identified as one of the nine “Ps” of tourism marketing. These nine “Ps” are the specific activities that must be undertaken in order to put your marketing strategies into practice and to reach the marketing objectives set. Not every one will require action in all nine areas, so for each one determine the right marketing mix, i.e. the right mix of the nine “Ps”, which will allow you to reach the objective as quickly and as efficiently as possible. There are two more areas to cover in the marketing planning process. They are marketing management and marketing evaluation, and are discussed in Chapter 32. RV Park/Campground Operator’s Manual 31 - 9 Chapter 31 – Marketing Objectives & Strategies September 2008 In summary Marketing is more than developing an array of activities and promoting them in as many markets as possible in the hopes they will attract new business. You must spend the time to identify the specific market segments you want to attract to your RV park/campground, assess how you reach them, and then direct your marketing activities to those groups. Review Question 1: There are seven approaches to market segmentation. What are they? Question 2: What are the three strategies required for each marketing objective? RV Park/Campground Operator’s Manual 31 - 10