Marketing of Segmentation in hospitality industru - Essay Example

Importance of segmentation in hospitality industry Importance of segmentation in hospitality industry The success of marketing policies used withineach industry is depended on the level at which these policies are aligned with the industry’s needs and trends, as influenced by the local culture and ethics. Usually, different marketing techniques are used for addressing issues that are unique within each industry. However, there are certain marketing techniques, which are effective in all marketing projects, no matter the industry involved.

Segmentation is one of these techniques. The potential use of segmentation in hospitality industry is discussed in this paper. Emphasis is given on the value of segmentation in the particular industry, as the specific issue is analyzed in the relevant literature. In order to understand the importance of segmentation in hospitality industry it would be necessary to refer to the characteristics of segmentation as a marketing technique. Then, its use in hospitality industry could be explored. According to Stanton market through segmentation a market, which is heterogeneous in regard to a particular product is partitioned, or else divided, into segments, so that each of these segments to be homogeneous for the particular product (Stanton 1983, cited by Vieceli & Valos, 1998, p.137). From a similar point of view, Lamb, Hair & McDaniel note that market segmentation helps marketers to identify the preferences and needs of different groups of people within a particular area (Lamb, Hair & McDaniel 2008, p.232). Market segmentation has led to the transformation of business practices worldwide.

For instance, Wal-Mart has established a unique marketing approach: its stores address the needs of six different market segments, being aligned with six different styles: “urban, suburban, Hispanic, multicultural, baby boomer and rural” (Lamb, Hair & McDaniel 2008, p.232). In other words, in the context of market segmentation, marketers identify the cultural and social characteristics of various groups within a specific area and then try to respond to the needs of these groups using appropriate marketing methods.

Of course, in many cases, the transformation of products for being aligned with the different needs of these groups is necessary. Segmentation has been proved particularly valuable in the hospitality industry. In the above industry, a specific type of segmentation has been found to be particularly valuable: the market based segmentation. This type of segmentation focuses on “the market value of the product rather than on its benefits” (Botha, Strydom & Brink 2005, p.75). Marketers in the hospitality industry use market segmentation in order to develop marketing schemes that best suit to the needs of the targeted group.

For example, customers who belong in the category “premium market” (Botha, Strydom & Brink 2005, p.75) would be attracted both by the high quality of services which are also popular in the global hospitality industry (Botha, Strydom & Brink 2005, p.75). On the contrary, customers that belong to the “economy market” would prefer a hotel that offers the basic accommodation, no matter its image in the market (Botha, Strydom & Brink 2005, p.75). Another type of segmentation would be also used in the hospitality industry, additionally or as an alternative to the market – value segmentation described above; it is the segmentation based on one of the following criteria: “a) demographics, b) geographical characteristics, c) psychological characteristics and d) behavioural characteristics” (Burkard 2011, p.8). The above type of segmentation is extensively used in all industrial sectors; in the hospitality industry, the specific type of segmentation would be also used; however, the market-value segmentation would be most appropriate for aligning the needs of the customers with the characteristics of services available in the hospitality industry; for example, through the market value segmentation the identification of groups of low/ average income would take place at the first place; then, marketing strategies would be developed emphasizing on the low prices of hotels operating in the particular area.

At this point, Kumar (2010) notes that marketing in hospitality industry is differentiated from marketing in other industries at the following point: in hospitality industry, the satisfaction of the customer is “the end of the marketing process” (Kumar 2010, p.35), meaning that if the services provided to the customer are good, then the customer is satisfied. In this way, marketing in hospitality industry is highly based on the development of customer’s expectations (Kumar 2010, p.35). At the same time, marketing in hospitality industry has another characteristic: it needs to be differentiated in accordance with the different needs of the same customers in other conditions.

For example, it is possible for an individual “to choose a five-star hotel when being in businesses and a two-star hotel when traveling for his own leisure” (Kumar 2010, p.35). Segmentation would be valuable in identifying the needs and preferences of customers within each market, as these needs and preferences are likely to change constantly. In the same context, Lew, Hall & Dallen (2008) note that in hospitality industry, geography could be a highly valuable criterion of segmentation. The specific criterion is used in visitor market segmentation which can be developed using data of visitors based on their place of origin or the place to which they have traveled (Lew, Hall & Dallen 2008, p.24). In this way, marketing schemes could be developed based on the place of origin of visitors of a specific area; these schemes could be used for increasing the number of visitors of the above area, either in the short or the long term.

It is clear that segmentation is a valuable technique for identifying the needs and preferences of customers in the hospitality industry. However, since different types of segmentation are available in the particular industry, as explained above, it would be necessary for marketers to set in advance the criteria on which their marketing policies would be based. Then, they had to choose the type of segmentation that is most appropriate according to the targets set and the resources available. References Botha, J.

, Strydom, J. & Brink, A. (2005). Introduction to Marketing. Cape Town: Juta and Company. Burkard, N. (2011). Market Segmentation and Branding in the Hotel Industry with Special References to Hilton Cooperation. Norderstedt: GRIN Verlag. Kumar, P. (2010). Marketing Of Hospitality & Tourism Services. New Delhi: Tata McGraw-Hill Education. Lamb, C., Hair, J. & McDaniel, C. (2008). Marketing. Belmont: Cengage Learning. Lew, A., Hall, C. & Dallen, T. (2008) World Geography of Travel and Tourism: A Regional Approach.

Oxford: Butterworth-Heinemann. Vieceli, J. & Valos, M. (1998). Marketing Management. New Delhi: Atlantic Publishers & Distributors.