Entrepreneurial Marketing (Aes 51003) : Prepared For: Prof Madya Noor Hasmini Binti Abd Ghani

THE RELEVANCE AND UTILITY OF
MARKET SEGMENTATION FOR THE

INTERNATIONAL HOSPITALITY
INDUSTRY
ATITHYA: A JOURNAL OF HOSPITALITY
5 (1) 2019, 04-07
PREPARED FOR: PROF MADYA NOOR HASMINI BINTI ABD GHANI
ENTREPRENEURIAL MARKETING (AES 51003)
PREPARED BY : MUHAMMAD QASIM

April 15, 2021
INTRODUCTION
 This process of identifying the segments of customers who share specialised, homogeneous demand is
called as ‘market segmentation’ (kotler, 2003).
 The organization has to decide which segment of the market it is going to serve.
 The aim of segmentation is to appeal to the potential customers and then to concentrate efforts and
money in an effective way.
 Different variables can be taken into consideration to segment a market.
 In this paper used variables are demographical, geographical, psychographic and behavioural
segmentation.
 The data used for this paper is the secondary data.
MARKET SEGMENTATION METHODS
 Demographic segmentation
• Is one of the most favourable methods in international hospitality industry.
• It has 3 main aspects which are age/life-cycle,gender and socio-economic class.
 Geographical segmentation
• Is the most frequently used method in international hospitality and tourism.
• The market is divided according to the geographic location. It is easy to judge the consumption
pattern in the geographic region.
• E.g geographic need and wants pushed Four Seasons Hotel in Washington, to include local
cuisine (Kotleret al. 1996).
MARKET SEGMENTATION METHODS
 Behavioural segmentation
• Assist hotels by dividing customers by the occasion of usage, frequency, loyalty, status etc.
• Hotels use a specific dimension of customers past, current and potential behaviour.
 Psychographic segmentation
• Lately has got popularity.
• Psychographic profiles of customers are created in this method which includes personality traits
and lifestyle of the customer.
Conclusion
Demographic and geographic segmentation are the most favoured methods of segmenting a market
in International hospitality.
Examples
• International Hospitality market is now using behavioural and psychographic segmentation with the
awareness of international hospitality. (DIAZ- MARTIN ET AL., 2000).
Behavioural Segmentation
BRAND LOYALTY
• Behavioural segmentation helps hotels to increase profitability by creating guest loyalty which leads
to repeat customers and it also increases the market share. For E.G. holiday inn’s priority club for
frequent users (morrison, 2002).
BENEFITS SOUGHT
• Benefit segmentation is the technique which segments customers on the basis of desired or benefits
sought . For E.G
• people prefer organic food because of the health benefits they get through their consumption.
Example
Psychographic Segmentation
• Psychogrphic segmentation use interest and opinion of customers in international hospitality
industry.
• The 4 groups with higher resources, Innovators, Thinkers, Achievers and Experience.
• The 4 groups with lower lower resources, Belivers, Strives, Makers and Survivors
• Psychographic use sophisticated technology which contains the information about customer
character from past usage. For E.G
• Kempinski hotel group use psychographic method in new york, boston and washington D.C. and
created smaller european styled hotels with old world style service for high end business
travellers (kotler et al., 1996).
REQUIREMENTS FOR EFFECTIVE SEGMENTATION
 In Hospitality industry all the way of segmenting a market might not prove effective. For
streamlining the process, following points should be taken into consideration.
 Measurability
• It dictates the degree to which the size and spending power of the segment is measured.
 Accessibility
• It is a degree to which the segment can be accessed or served.
 Substantiality
• It considers the degree to which segments are large or profitable enough to serve as target market.
Meaning that choosing a large market segment with appropriate disposable income to buy a
certain product should be chosen.
 Actionability
• It defines the most relevant and effective program that can be adopted designed considering the
segmented market.
CONCLUSION
 In recent years market segmentation has got more popularity because intense competition and
change in wants and demands pattern.
 Many a time a single segmentation criterion is not enough for segmentation. In such a case
companies use one or more methods of segmentation to get best results (kotler et al., 1996).
 Formerly industry used to follow demographic and purpose of visit bases to segment the market,
which is now changing to geographic and psychographic and behavioural with the awareness of
international hospitality.

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THE RELEVANCE AND UTILITY OF

MARKET SEGMENTATION FOR THE

PREPARED FOR: PROF MADYA NOOR HASMINI BINTI ABD GHANI

ENTREPRENEURIAL MARKETING (AES 51003)

PREPARED BY : MUHAMMAD QASIM

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