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II 8 Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Market Segmentation, Targeting, and Positioning Foreword: II “The mythological, homogeneous America is gone. We are a mosaic of minorities.” -Joel Weiner- 8 Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 OBJECTIVES After reading this chapter, you should be able to: • Identify the major steps on designing a customerdriven marketing strategy: market segmentation, targeting, and positioning. • List and distinguish among the requirements for effective segmentation: measurability, accessibility, substantiality, and actionability. • Explain how companies identify attractive market segments and choose a market-targeting strategy. • Illustrate the concept of positioning for competitive advantage by offering specific examples. II 8 Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Market Segmentation, Targeting and Positioning Dunkin’ Donuts & Starbucks • Dunkin’ Donuts recently paid dozens of customers $100 a week to buy coffee at Starbucks instead. II – at the same time, the no-frills coffee chain paid Starbucks’ customers to make the opposite switch • Dunkin’ says it found them so polarized that company researchers dubbed them “tribes”. – each of whom loathed the very things that made the other tribe loyal to their coffee shop • Dunkin’ fans saw Starbucks as pretentious & trendy. – Starbucks loyalists saw Dunkin’ as plain & unoriginal – a Dunkin’ regular told researchers “If I want to sit on a couch, I stay at home.” Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab 8 © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Market Segmentation, Targeting and Positioning Dunkin’ Donuts • William Risenberg opened the first Dunkin’ Donuts in Quincy, Massachusetts, in 1950, where residents flocked each morning for coffee & fresh doughnuts. II – Rosenberg started franchising the Dunkin’ Donuts name, and the chain grew rapidly in the Midwest & Southeast • By the early 1990s, Dunkin’ was losing breakfast sales to morning sandwiches at McDonald’s and Burger King. – Starbucks and other high-end cafés began sprouting up, bringing more competition – sales slid as the company clung to its strategy of selling sugary doughnuts by the dozen Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab 8 © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Market Segmentation, Targeting and Positioning Dunkin’ Donuts • In the mid-1990s, Dunkin’ shifted its focus from doughnuts to coffee hoping that promoting a more frequently consumed item would drive store traffic. II – the push worked, as coffee now makes up 64% of sales and doughnuts a mere 17% – sales have surged more than 40% in the past four years • Based on this success, Dunkin’ now has plans to expand into a national coffee powerhouse, on a par with Starbucks, the nation’s largest chain. – the chain has more than 5,800 US restaurants & plans to open another 10,000 stores nationwide by 2020 Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab 8 © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Market Segmentation, Targeting and Positioning Dunkin’ Donuts & Starbucks • Dunkin’ is not Starbucks and doesn’t want to be. – Dunkin’ & Starbucks target very different customers, who want very different things from their favorite coffee shops II • To succeed, Dunkin’ must have its own clear vision… – of just which customers it wants to serve: (what segments & targeting) – and how: (what positioning or value proposition) 8 Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Market Segmentation, Targeting and Positioning Dunkin’ Donuts & Starbucks • Starbucks is strongly positioned as a sort of highbrow “third place”—outside the home and office— featuring couches, eclectic music, wireless Internet access, and art-splashed walls. II – Dunkin’ has a decidedly more low-brow, “everyman” kind of positioning • Dunkin’ plans to move upscale—but not too far—to rebrand itself as a quick but appealing alternative to specialty coffee shops and fast-food chains. – a prototype store in Euclid, Ohio features rounded granitestyle coffee bars where workers make espresso drinks face to face with customers Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab 8 © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Market Segmentation, Targeting and Positioning Dunkin’ Donuts & Starbucks • Dunkin’ built itself on serving simple fare to working-class customers, and inching upscale without alienating that base will prove tricky. II – there will be no couches in the new stores – vice president of consumer insights Regina Lewis, says of Dunkin’ customers, “…they see through the hype.” 8 Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Market Segmentation, Targeting and Positioning Dunkin’ Donuts & Starbucks • Dunkin’s research showed that while loyal Dunkin’ customers want nicer stores, they were bewildered and turned off by the atmosphere at Starbucks. II – crowds of laptop users made it difficult to find a seat – they didn’t like Starbucks’ “tall,” “grande,” & “venti” lingo for small, medium, & large coffees – they couldn’t understand why anyone would pay as much as $4 for a cup of coffee • The Starbucks’ customers that Dunkin’ paid to switch were equally uneasy in Dunkin’ shops. – says an ad executive, “the Starbucks people couldn’t bear that they weren’t special anymore” Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab 8 © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Market Segmentation, Targeting and Positioning Dunkin’ Donuts & Starbucks • Such opposing opinions aren’t surprising, given the differences in the two stores’ customers. II – Dunkin’s customers include blue- & white-collar workers across all age, race, and income demographics – Starbucks targets a higher income, professional group • Dunkin’ researchers concluded an ideal set the two tribes apart. – Dunkin’ members want to be part of a crowd – members of the Starbucks tribe want to stand out as individuals 8 Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Market Segmentation, Targeting and Positioning Dunkin’ Donuts & Starbucks • Dunkin’ executives made dozens of store-redesign decisions, big and small, from how much of its signature pink & orange color scheme to retain to where to place fresh baked goods. II – executives committed to dropping the word “donut” from its signs to convey the menu is now broader • Dunkin’ knows that it’ll take some time to refresh its image, but whatever else happens, it plans to stay true to the needs & preferences of the Dunkin’ tribe. 8 Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Markets Introduction • Companies today recognize that they cannot appeal to all customers in the marketplace, or at least not all customers the same way. II – customers are too numerous, too widely scattered, too varied in their needs & buying processes • Companies themselves vary widely in their abilities to serve different segments of the market. – a company must identify the parts of the market that it can serve best and most profitably – it must design customer-driven marketing strategies that build the right relationships with the right customers Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab 8 © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Markets Identification • Most companies have moved away from mass marketing, toward target marketing. II – identifying market segments, selecting one or more of them, and developing tailored products & programs Figure 8-1 Steps in Segmentation, targeting and positioning. Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab 8 © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Markets Target Marketing • There are three major steps in target marketing. • The first is market segmentation, dividing a market into distinct groups who might require separate products and/or marketing mixes. • The second step is market targeting, evaluating each segment’s attractiveness and selecting one or more of the market segments. • The third step is market positioning, developing competitive positioning for the product and an appropriate marketing mix. Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab II 8 © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Market Segmentation Introduction • Markets consist of buyers who differ in their wants, resources, locations, buying attitudes & buying practices. II – because buyers have unique needs & wants, each is potentially a separate market • As most companies are unable to offer complete segmentation due costs, companies look for broad classes of buyers who differ in their product needs or buying responses. 8 Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Market Segmentation Variables • The restaurant industry offers many examples of segmentation by a variety of variables. II – because each customer group in a market may want a different product, a restaurant cannot serve all customers with equal effectiveness • To gain an edge over its competition, a restaurant must examine market segments by identifying one or more subsets of customers within the total market and concentrate its efforts on meeting their needs. – the restaurant must distinguish the easily accessible consumer groups from the unresponsive ones Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab 8 © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Market Segmentation Introduction • Table 8–1 outlines major variables that might be used in segmenting consumer markets. Here we look at the geographic, demographic, psychographic, and behavioristic variables used in segmenting consumer markets. II 8 Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Market Segmentation geographic, demographic, psychographic & behavioral • There is no single way to segment a market. A marketer has to try different segmentation variables. • Table 8–1 on page 200 outlines major variables that might be used in segmenting consumer markets. II – geographic, demographic, psychographic & behavioral Table 8-1a Major Segmentation Variables for Consumer Markets - Geographic. Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab 8 © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Market Segmentation Geographic Segmentation • Geographic segmentation is dividing the market into different geographic units, such as nations, states, regions, counties, cities, or neighborhoods. II – paying attention to geographic differences in customer preferences • Hospitality companies such as Starwood Hotels and Resorts make use of geographic information in their databases to develop highly targeted promotions, special packages & regional foods for guests. – absence of effective database use forces companies to use mass marketing tactics, often of no interest to a majority of recipients Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab 8 © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Market Segmentation Geographic Segmentation • Knowledge of geographic customer preferences is particularly important in North America and Europe where immigration has created pockets of customers with very different product/service preferences. II – growth of Muslim markets has created a need for prayer rug areas within some hotels • A customer origin study can be collected by simply asking customers for their zip code or databases. – In 2002 Accor formed an active partnership with the Humane Society of the United States(HSUS). This was reported in the American Hunter, the National Rifle Association(NRA), opposed to the policies of HSUS Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab 8 © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Market Segmentation Geographic Segmentation • The success of local and regional tourism depends on creative geographic segmentation. • Tourists must have strong reason to travel hundreds or thousands of miles to visitor destinations. - Not many years ago, the isolated town of Sedan, Kansas. Bill Kurtis(CBS Morning News anchor), a Kansas native, had a different vision for the town. Today, revitalization has begun in Sedan. - Prairie artists have located there, and unique restaurants, quilt shops, antiques stores, and other specialty retailers now occupy Main Street. Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab II 8 © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Market Segmentation Demographic Segmentation • Demographic segmentation consists of dividing the marketing into groups based on demographic variables such as age, life cycle, gender, income, occupation, education, religion, race, and nationality. II – the most common bases for segmenting customer groups • One reason is that consumer preferences & use rates often vary closely with demographic variables. – another is that demographic variables are easy to measure • Even when segments are first defined using other bases, demographic characteristics must be known to assess market size, and to reach it efficiently. Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab 8 © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Market Segmentation Demographic - age & life-cycle stage • Consumer preferences change with age and some companies offer different products or strategies to penetrate various age & life-cycle segments. II – McDonald’s offers Happy Meals with include toys aimed at young children – American Express focuses on a mature market because this age segment accounts for 70% of tour industry bookings • The “baby boomer” generation is large in several industrialized nations: Japan, the UK, Canada, others. – this market represents tremendous buying potential for tourism Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab 8 © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 II See this feature on page 203 of your textbook. Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab 8 © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Market Segmentation Demographic - Gender • Gender segmentation, long used to market clothing, hair, cosmetics & magazines is now used by the hospitality industry. • Hotels now consider women when designing rooms II – and are including more women executives in their ads • Gender marketing is not simplistic, since a “typical” male or female does not exist, and many companies have erred trying to develop and market a product or service for such an individual – gender marketing is most effective when combined with lifestyle and demographic information Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab 8 © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Market Segmentation Demographic - Income • Much used by marketers of products & services, the lodging industry is particularly effective in using income segmentation. II – upper-income guests & corporations are targets for country clubs, boxes at sports stadiums, upscale hotels & resorts • Lower-income segments are relatively easy to target by budget motels, interstate bus services, and others. – in designing and marketing by income, it is well to keep in mind an old proverb, “Whoever sells to kings may dine with peasants, but whoever sells to peasants, may dine with kings.” Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab 8 © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Market Segmentation Demographic - Income • The middle-income consumer is by far the largest segment for the hospitality industry. II – but can be difficult to attract and retain • The term “middle income” encompasses a wide range of incomes and lifestyles, and an abundance of competitors serve this segment, and product service offerings are numerous – changing preferences, economic cycles, reaction to terrorism & violence by this segment complicate marketing • Income does not always predict which customers will buy a given product or service. Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab 8 © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Market Segmentation Demographic - Income • Income segmentation is commonly believed to be one a primary variable affecting pricing strategies. II – price is not solely determined by income, but there is a close correlation • Fractional ownership, partial property ownership, is clearly designed for the upscale income market. – marketing of fractional ownership (also called residence clubs) is essentially a high-end real estate function • Some individuals have worried that fractional ownership will harm the upscale hotel market. 8 Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Market Segmentation Psychographic - Social Class • Psychographic segmentation divides buyers based on social class, lifestyle, and personality characteristics. II – the same demographic group can have very different psychographic profiles • Social class has a strong effect on preferences for cars, clothes, home furnishings, leisure activities, reading habits, and retailers. – afternoon tea at the Ritz-Carlton is aimed at the uppermiddle & upper classes(VIP Lounge) – a neighborhood pub near a factory targets the working class Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab 8 © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Market Segmentation Psychographic - Lifestyle • Marketers are increasingly segmenting the markets by consumer lifestyles. II – many bars/watering holes are designed for young singles wanting to meet other singles, and couples wanting to avoid the singles scene and enjoy each other’s company 8 Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Market Segmentation Psychographic - Personality • Marketers use personality variables to segment markets, endowing their products and personalities. • Wendy’s had a great personality in the person of Dave Thomas, the founder. II – unfortunately Dave passed away, and the company was left without a memorable personality • This is a major reason why companies like McDonald’s, Burger King, and Jack in the Box use fictional characters who never age and can adopt a personality. 8 Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Market Segmentation Behavioral – Special Occasion Segmentation • For behavioral segmentation, buyers are divided into groups based on knowledge, attitude, and use or response to a product. II – many marketers believe behavioral variables are the best starting point for building market segments • Occasion segmentation helps firms build product use, as buyers can be grouped according to occasions when they make a purchase or use a product. – Mother’s Day is promoted as a time to take your mother or wife out to eat; St. Patrick’s Day as a night of celebration – Monday holidays, such as Labor Day and Memorial Day, have been promoted as times to enjoy a mini vacation Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab 8 © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 II See this feature on page 207 of your textbook. Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab 8 © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Market Segmentation Behavioral - Benefits Sought • Buyers can also be grouped according to the product benefits they seek. • Knowing the benefits sought by customers is useful in two ways. II – managers can develop products with features that provide the benefits their customers are seeking – managers communicate more effectively with their customers if they know what benefits they seek 8 Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Market Segmentation Behavioral - Benefits Sought • After studying patrons and nonpatrons of three types of restaurants, one researcher concluded there are five major appeal categories for restaurant customers. II – patrons of family service restaurants sought convenience and menu – variety patrons of atmosphere restaurants ranked food quality and atmosphere as the top attributes – patrons of gourmet restaurants valued quality • A benefit is a positive outcome received from a product feature. – product features with positive outcomes for guests create value, those with no positive outcomes have no value Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab 8 © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Market Segmentation Behavioral - User Status • Many markets can be segmented into nonusers, former users, potential users, first-time users, and regular users of a product. • High-market-share companies such as major airlines are particularly interested in keeping regular users and attracting potential users. II – potential users and regular users often require different marketing appeals 8 Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Market Segmentation Behavioral - Usage Rates • Markets can be segmented into light-, medium-, and heavy-user groups. II – heavy users are often a small percentage of the market but account for a high percentage of total buying • One of the most controversial programs employed by the hospitality & travel industries to ensure heavy patronage by key customers is the frequent flyer or frequent guest program. – many experts question long-run value of these programs – they question the “competitive advantage” they create because most airlines have similar programs Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab 8 © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Market Segmentation Behavioral - Usage Rates • Though many hotel chains offer a frequent guest program, they realize that most look alike, thus reducing their effectiveness. • Guests may indeed collect points to enjoy a free stay, but point accumulation may not build loyalty. II – a study on this topic concluded, “…loyalty is an emotional bond that cannot be bought by points or free stays.” • Marketers need to find ways to enhance emotional ties between the consumer and the hotel brands – an outcome of loyalty is increased usage of the product 8 Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Market Segmentation Behavioral - Loyalty Status • A market can be segmented by consumer loyalty. • A study of hotel brand extensions showed that brand extensions are helpful in increasing customer loyalty and in promoting repeat buying. II – customers who like a main-line, name-brand hotel are likely to patronize other hotels owned by that company • In the hospitality and travel industries, marketers attempt to build brand loyalty through relationship marketing. – marketing strategies for resorts suggest the first, most basic strategy is “to keep and expand the current market base” Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab 8 © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Market Segmentation Behavioral - Buyer Readiness Stage • At any given time, people are in different stages of readiness to buy a product, and the relative number in each stage makes a big difference in designing a marketing program. II – some are unaware of the product; some aware – some are informed; some want the product – some intend to buy 8 Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Market Segmentation Requirements for Effective Segmentation • Not all segmentation methods are equally effective, so to be useful, market segments must have the following characteristics: – Measurability - the degree to which the segment’s size and purchasing power can be measured. – Accessibility - the degree to which segments can be assessed and served. – Substantiality - The degree to which segments are large or profitable enough to serve as markets. – Actionability - : The degree to which effective programs can be designed for attracting and serving segments. Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab II 8 © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Market Targeting Evaluating Market Segments - Segment Size & Growth • When evaluating different market segments, a firm must look at segment size & growth, segment structured attractiveness, company objectives & resources. • A company must first collect and analyze data on current segment sales for segments with the right size and growth characteristics, II – “right size and growth” is a relative matter • The largest, fastest growing segments are not always the most attractive ones for every company. – at times smaller segments are potentially more profitable Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab 8 © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Market Targeting Segment Structural Attractiveness • A segment might have desirable size & growth and still not offer attractive profits, so a company must examine several major structural factors that affect long-run segment attractiveness. II – a segment is less attractive if it contains many strong & aggressive competitors, and existence of many actual or potential substitute products may limit prices and profits • Relative power of buyers affects attractiveness. – if buyers possess strong bargaining power relative to sellers, they will force prices down, demand more quality services & set competitors against one another Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab 8 © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Market Targeting Company Objectives and Resources • Some attractive segments can be dismissed because they do not mesh with long-run objectives. II – although tempting, they might divert a company from its main goal – they might be a poor choice from an environmental, political, or social responsibility viewpoint • If the company lacks the strengths needed to compete successfully in a segment and cannot readily obtain them, it should not enter the segment. – a company should enter segments only where it can gain sustainable advantages over competitors Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab 8 © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Market Targeting Selecting Market Segments • After evaluating different segments, the company must decide which and how many segments to serve. • A target market consists of a set of buyers who share common needs or characteristics that the company decides to serve. • A firm can adopt one of three market-coverage strategies: – undifferentiated marketing and Bifurcated Marketing – differentiated marketing – concentrated marketing. Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab II 8 © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Market Targeting Selecting Market Segments II Figure 8-2 Three alternative market-coverage strategies. Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab 8 © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Market Targeting Undifferentiated Marketing • In an undifferentiated marketing strategy, a company ignores market segmentation differences and goes after the entire market with one market offer. II – it focuses common needs of consumers • It designs a marketing plan that will reach the greatest number of buyers. – mass distribution & advertising serve as the basic tools to create a superior image in consumers’ minds • An undifferentiated advertising program holds down advertising costs. – also marketing research & product development costs Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab 8 © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Market Targeting Undifferentiated Marketing • Contemporary marketers have strong doubts about the strategy in today’s competitive environment. II – it is difficult to develop a product & brand to satisfy all or even most consumers • When several competitors aim at the largest segments, the inevitable result is heavy competition. – small companies generally find it impossible to compete are forced to adopt market-niche strategies • Larger segments may become less profitable because of heavy marketing costs, including the possibility of price cutting and price wars Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab 8 © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Market Targeting Bifurcated Marketing • In many undeveloped nations such as parts of Asia, Africa, and Latin America and in developing nations such as China, the available guest mix is bifurcated. II – high-end hotels exist for international visitors and as a location for social occasions for high-income locals – low-end hotels exist for locals and adventurous tourists. • A bifurcated market (a market that contains two major market segments) sometimes frustrates foreign hotel owners wishing to enter the market. – absence or scarcity of middle-income guests means midmarket chains may find little or no success Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab 8 © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Market Targeting Differentiated Marketing • Using differentiated marketing strategy, a company targets several market segments and designs separate offers for each. • Accor Hotels, a French company, operates under twelve trade names and manages several brands & types of hotels • Sofitel, Novotel, Ibis, Fomula One, Motel6, Hotelia. II – this segmentation has allowed Accor to become one of the world’s foremost hotel groups • Differentiated marketing typically produces more total sales than undifferentiated marketing. Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab 8 © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Market Targeting Concentrated Marketing • A third strategy, concentrated marketing, is appealing to companies with limited resources. II – instead of going for a small share of a large market, the firm pursues a large share of one or a few small markets • Hospitality companies achieve a strong market position in the segments that they serve, thanks to their greater knowledge of those segments’ needs. – if the segment is well chosen, the company can earn a high rate of return on investment • Concentrated marketing involves higher than normal risks, as a particular market segment can turn sour. Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab 8 © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Market Targeting Choosing a Market-Coverage Strategy • Companies need to consider several factors in choosing a market-coverage strategy. II – the company’s resources - when resources are limited, concentrated marketing makes the most sense – degree of product homogeneity - undifferentiated marketing is more suited for homogeneous products – products that vary in design, such as restaurants & hotels, are more suited to differentiation or concentration • When introducing a new product, it may be practical to launch only one version, so undifferentiated or concentrated marketing makes the most sense. Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab 8 © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Market Positioning Positioning Strategies • Once market segments are chosen, a company must decide what positions to occupy in those segments. • A product’s position is the way the product is defined by consumers on important attributes. II – the place the product occupies in consumers’ minds relative to competing products • Consumers are overloaded with information about products and services. They cannot reevaluate products every time they make a buying decision. – to simplify buying decisions, consumers “position” products & companies in their minds Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab 8 © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Market Positioning Positioning Strategies • Marketers do not want to leave their products’ positions to chance, so they plan positions to give their products the greatest advantage in selected target markets, then design the marketing mixes. II – Wendy’s promotes never-frozen meat, hot off the grill – Burger King is known for its flame-broiled food – Rally’s uses low prices to position itself • A hotel brand’s position can be viewed from two perspectives—that of management & of the guests. – management must have a clear concept of the hotel’s intended position – determined by its customers. Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab 8 © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Market Positioning Positioning Strategies • Marketers can follow several positioning strategies, such as specific product attributes. • Product attribute positioning can be dangerous. II – consumer preferences change and competitors blunt the effort of specific product attributes • Products can be positioned against another product class. – cruise ships have positioned themselves against other vacation alternatives such as destination resorts – B&Bs, as “home-like” alternatives to other lodging – conference centers have consistently positioned themselves against hotels with conference facilities Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab 8 © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Market Positioning Positioning Strategies • When two or more firms pursue the same position, each must seek further differentiation. II – such as “a business hotel for a lower cost” or “a business hotel with a great location” • Each firm must build a unique bundle of advantages appealing to a substantial group within the segment. – this subpositioning is often called niche marketing • Most cruise lines offer a multiday cruise experience with stops at several ports. – a few niche cruise lines have found it profitable to offer a one-day cruise with no ports of call Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab 8 © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Market Positioning Choosing and Implementing a Positioning Strategy • The positioning task consists of three steps: II – identifying a set of possible competitive advantages on which to build a position – selecting the right competitive advantages – effectively communicating and delivering the chosen position to a carefully selected target market • A company can gain competitive advantage by offering consumers lower prices for similar products or providing more benefits that justify higher prices. – a company must compare its prices and products to those of competitors & always look for possible improvements Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab 8 © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Market Positioning Choosing and Implementing a Positioning Strategy • In some cases, unbundling of products has also worked as a positioning tactic. • Until the early 70s, many resorts sold only a bundled product known as the American Plan (AP). II – which included resort services such as food & beverage • Resort managers observed changes in guest behavior, and began to differentiate their properties. – offering a modified American plan (MAP), in which lunch was not included – or a European plan, which did not include meals 8 Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Market Positioning Product Differentiation - Physical • A hospitality company or a visitor destination must differentiate its products/services from competitors. II – by physical attributes, service, personnel, location, image • Classic hotels such as the Waldorf-Astoria, Palmer House in Chicago, & Prestonfield House in Edinburgh differentiate themselves on past grandeur. – many hotels, restaurants, & airlines lack physical differentiation & price becomes the primary factor • Differentiation that excites the consumer and offers something new can lead to excellent public relations opportunities, customer loyalty, and greater profits. Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab 8 © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Market Positioning Product Differentiation - Service • By providing services that benefit its target market, a hospitality company can achieve differentiation for a period of time. II – Red Lobster allows its customers to call to put their names on a wait list, reducing the time they wait at the restaurant • Unwanted differentiation occurs when a company consistently provides a horrible level of guest service. – such a reputation often requires a change in management or ownership to correct 8 Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Market Positioning Product Differentiation - Service • The basics of good customer service are comparable to the Golden Rule: “Do unto others as you would have them do unto you.” II – it is strange that so many members of service industries ignore good customer service • Results of customer service studies usually reveal common sense yet valuable insight. – because so many companies overlook the importance of good service, those who truly emphasize service will achieve positive differentiation • Companies gain a strong competitive advantage by hiring & retaining better people than competitors. Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab 8 © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Market Positioning Product Differentiation - Personnel • Personnel differentiation requires selecting customercontact people carefully & training them well. II – these personnel must be competent and must possess the required skills and knowledge – they need to be courteous, friendly, and respectful – they must serve customers with consistency & accuracy – they must make an effort to understand their customers, and communicate clearly with them – they must respond quickly to customer requests & problems 8 Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Market Positioning Location Differentiation • Location can provide a strong competitive advantage. – hotels facing Central Park in New York City have a competitive advantage over hotels a block away II • Hospitality & travel firms should look for benefits created by their location, keeping in mind that this advantage is subject to chance. – factors such as a new highway bypass or criminal activity in a neighborhood can turn an advantage into a problem • Hospitality companies are well advised to seriously consider what geographic factors may have created their success before expanding too widely. Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab 8 © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Market Positioning Image Differentiation • Even when competing offers look the same, buyers may perceive a difference based on company or brand image. • A company or visitor destination image should convey a singular or distinctive message that communicates the product’s benefits & positioning. • Developing a strong and distinctive image calls for creativity and hard work. II – a positive image must be earned and must be supported by everything the company says & does 8 Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Market Positioning Selecting the Right Competitive Advantages • A company is fortunate enough to discover several potential competitive advantages must choose the ones on which it will build its positioning strategy. • Many marketers think companies should promote only one benefit to the target market, picking an attribute & touting itself as #1 on that attribute. II – buyers tend to remember number one better, especially in an overcommunicated society • Major number-one positions to promote are best quality, best service, lowest price, best value, and best location. Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab 8 © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Market Positioning Selecting the Right Competitive Advantages • A company that hammers away at a position that is important to its target market & consistently delivers on it probably will become best known/remembered. • Other marketers think that companies should position themselves on more than one differentiating factor. II – a hotel may claim it offers the best value & location • Because today’s mass market is fragmenting into many small market segments, companies are trying to broaden strategies to appeal to more segments. • As companies increase the number of claims for their brands, they risk disbelief & loss of clear positioning. Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab 8 © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Market Positioning How Many Differences? • In general, a company needs to avoid three major positioning errors. II – underpositioning, or failing to position the company at all – overpositioning, or giving buyers too narrow a picture of the company – confused positioning, leaving buyers with a confused image of a company • Good positioning helps build brand loyalty, but for a hotel, it may not be enough to simply satisfy guests. – satisfied customers do not repurchase unless they are also attitudinally brand loyal Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab 8 © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Market Positioning Which Differences? • Not all differences are meaningful or worthwhile, and not every difference makes a good differentiator. II – each difference has the potential to create company costs as well as customer benefits • Some competitive advantages may quickly be ruled out because they are too slight, too costly to develop, or too inconsistent with the company’s profile. – the company needs a framework for selecting the one that makes the most sense to develop 8 Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Market Positioning Which Differences? • A difference is worth establishing to the extent that it satisfies the following criteria: – Important - delivers highly valued benefit to target buyers – Distinctive - competitors do not offer the difference, or the company can offer it in a more distinctive way – Superior - the difference is superior to other ways that customers might obtain the same benefit – Communicable - and visible to buyers – Preemptive - competitors can’t easily copy the difference – Affordable - buyers can afford to pay for the difference – Profitable - the company can introduce the difference profitability Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab II 8 © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Market Positioning Communicating and Delivering the Chosen Position • Having chosen positioning characteristics and a positioning statement, companies must communicate their positions to targeted customers. II – all of a company’s marketing mix efforts must support its positioning strategy • Building and maintaining a consistent positioning strategy isn’t easy, as many counterforces are at work. – advertising agencies hired by the company may not like a selected position & may overtly or covertly work against it – new management may not understand the strategy – budgets may be cut for critical support programs Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab 8 © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Market Positioning Communicating and Delivering the Chosen Position • Development of an effective position requires a consistent, long-run program with continuous support by management, employees & vendors. • Companies normally develop a memorable statement to communicate their desired positions. II – unfortunately, a new management team or ad agency may discard a good statement • When selecting a positioning strategy, a company should review competitive strengths & weaknesses and select a position that places it in a superior position against its competitors. Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab 8 © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 II See this feature on page 221 of your textbook. Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab 8 © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Market Positioning Positioning Measurement - Perceptual Mapping • Perceptual mapping, a research tool, is sometimes used to measure a brand’s position. • Two-by-two perceptual maps provide an easy-toread picture, but one must often study multiple maps plotting different attributes to obtain a good feel of the marketplace. II 8 Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Market Positioning Positioning Measurement - Perceptual Mapping • On this map is a correlation between service & price. II – plotted on attributes of price & perceived service – as price goes up, so does service Figure 8-3 Positioning map of service level versus price. From Christopher Lovelock, Services Marketing, 1996, p. 178 Prentice Hall, Upper Saddle River, NJ. Used with permission. Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab 8 © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Market Positioning Positioning Measurement - Perceptual Mapping • Perceptual maps can be developed using consumer perceptions of a number of product attributes. • Dev, Morgan, & Shoemaker developed a perceptual map based on ratings of eight attributes, using a technique known as probabilistic multidimensional scaling. II – to derive the coordinates for the map in figure 8–4 • This technique is useful to identify competitive set and to open spaces that can represent an opportunity for repositioning away from the competition. 8 Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Market Positioning Positioning Measurement - Perceptual Mapping II Figure 8-4 Positioning map using multiple attributes to position hotels. From Chekitan S. Dev, Michael S. Morgan, and Stowe Shoemaker, “A Positioning Analysis of Hotel Brands,” Cornell Hotel and Restaurant Administration Quarterly 36 (December 1995): 48–55. Courtesy of Cornell Hotel and Restaurant Administration Quarterly. Copyright Cornell University. Used by permission. Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab 8 © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 Market Positioning Positioning Measurement - Perceptual Mapping • The circles are drawn around clusters of the hotels not statistically significant distances from each other. II – the hotels in the circles can be viewed by the consumer as being similar • In this type of map the positions are essentially neutral; one spot on the map does not inherently have to be better or worse than another. • Increased competition or an ineffective positioning strategy can make repositioning necessary. – perceptual maps provide data supporting the need for repositioning Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab 8 © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 KEY TERMS • Behavioral segmentation. Dividing a market into groups based on consumers’ knowledge, attitude, use, or response to a product. • Bifurcated market. A market that is divided into two major market segments. II 8 Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 KEY TERMS • Competitive advantage. An advantage over competitors gained by offering consumers greater value either through lower prices or by providing more benefits that justify higher prices. • Competitors’ strategies. When competitors use segmentation, undifferentiated marketing can be suicidal. Conversely, when competitors use undifferentiated marketing, a firm can gain an advantage by using differentiated or concentrated marketing. II 8 Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 KEY TERMS • Confused positioning. Leaving buyers with a confused image of a company. • Degree of product homogeneity. Undifferentiated marketing is more suited for homogeneous products. Products that can vary in design, such as restaurants and hotels, are more suited to differentiation or concentration. • Demographic segmentation. Dividing the market into groups based on demographic variables such as age, gender, family size, family life cycle, income, occupation, education, religion, race & nationality. Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab II 8 © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 KEY TERMS • Gender segmentation. Dividing a market on the basis of gender. • Geographic segmentation. Dividing a market into different geographic units such as nations, states, regions, counties, cities, or neighborhoods. • Income segmentation. Dividing a market into different income groups. • Market homogeneity. If buyers have the same tastes, buy a product in the same amounts, and react the same way to marketing efforts, undifferentiated marketing is appropriate. Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab II 8 © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 KEY TERMS • Market positioning. Formulating competitive positioning for a product & detailed marketing mix. • Market segmentation. Dividing a market into direct groups of buyers who might require separate products or marketing mixes. • Market targeting. Evaluating each market segment’s attractiveness and selecting one or more segments to enter. • Overpositioning. Giving buyers a too narrow picture of the company. Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab II 8 © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 KEY TERMS • Psychographic segmentation. Dividing a market into different groups based on social class, lifestyle, or personality characteristics. • Specific product attributes. Price and product features can be used to position a product. • Underpositioning. Failing ever to position the company at all. II 8 Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 EXPERIENTIAL EXERCISES Try the Following ! • Find an advertisement from a hospitality or travel company that targets a specific segment, such as children, young adults, seniors, upper-income customers, etc., and visit a location of that company. • What does the company do at the location with its marketing mix to attract the segment that it targeted in the advertisement? • This can include sales promotions, signage, product mix, location of the company, and pricing of products. II 8 Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 INTERNET EXERCISES Try This ! Support for this exercise can be found on the Web site for Marketing for Hospitality and Tourism, www.prenhall.com/kotler • Go to the Web site of a major brand of a hospitality or travel company. • Explain how they appeal to different segments through the Web site. II – give specific examples 8 Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens tab © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458 END II CHAPTER END Marketing for Hospitality and Tourism, Fifth Edition By Philip Kotler, John Bowen and James Makens 8 © 2010 Pearson Higher Education, Inc. Pearson Prentice Hall - Upper Saddle River, NJ 07458