©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ Kotler, Bowen, and Makens Chapter 8 Market Segmentation, Targeting, and Positioning

©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ Kotler, Bowen, and Makens Key Terms Behavioral segmentation Benefit segmentation Competitive advantage Competitors’ strategies Confused positioning Customized marketing Degree of product homogeneity Demographic segmentation ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ Kotler, Bowen, and Makens

©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ Kotler, Bowen, and Makens Key Terms Existing competitor Gender segmentation Geographic segmentation Income segmentation ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ Kotler, Bowen, and Makens

©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ Kotler, Bowen, and Makens Key Terms Market Market homogeneity Market positioning Market segmentation Market targeting ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ Kotler, Bowen, and Makens

©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ Kotler, Bowen, and Makens Key Terms Micromarketing Overpositioning Psychographic segmentation Specific product attributes Underpositioning ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ Kotler, Bowen, and Makens

©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ Kotler, Bowen, and Makens “The mythological, homogeneous America is gone. We are a mosaic of minorities.” “The mythological, homogeneous America is gone. We are a mosaic of minorities.” -Joel Weiner ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ Kotler, Bowen, and Makens

©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ Kotler, Bowen, and Makens Chapter Objectives Explain market segmentation and identify several possible bases for segmenting markets List and distinguish among the requirements for effective segmentation ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ Kotler, Bowen, and Makens

©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ Kotler, Bowen, and Makens Chapter Objectives Outline the process of evaluating market segments Illustrate the concept of positioning for competitive advantage Discuss choosing and implementing a positioning strategy ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ Kotler, Bowen, and Makens

©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ Kotler, Bowen, and Makens Markets A market is all actual and potential buyers of a product or serviceA market is all actual and potential buyers of a product or service ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ Kotler, Bowen, and Makens

©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ Kotler, Bowen, and Makens Stages of Marketing Mass marketingMass marketing Product-variety marketingProduct-variety marketing Target marketingTarget marketing MicromarketingMicromarketing Customized marketingCustomized marketing ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ Kotler, Bowen, and Makens

©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ Kotler, Bowen, and Makens Market Segmentation Geographic SegmentationGeographic Segmentation Demographic SegmentationDemographic Segmentation Psychographic SegmentationPsychographic Segmentation Behavior SegmentationBehavior Segmentation ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ Kotler, Bowen, and Makens

©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ Kotler, Bowen, and Makens Geographic Segmentation Dividing the market into different geographic unitsDividing the market into different geographic units –Nations –States –Regions –Counties –Cities –Neighborhoods ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ Kotler, Bowen, and Makens

©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ Kotler, Bowen, and Makens Demographic Segmentation Dividing the market into groups based on demographic variablesDividing the market into groups based on demographic variables –Age –Gender –Income –Occupation ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ Kotler, Bowen, and Makens

©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ Kotler, Bowen, and Makens Psychographic Segmentation Dividing buyers into different groups based on social class, lifestyle, and personality characteristics ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ Kotler, Bowen, and Makens

©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ Kotler, Bowen, and Makens Behavior Segmentation Buyers are divided into groups based on their knowledge, attitude, and use or response to a productBuyers are divided into groups based on their knowledge, attitude, and use or response to a product The best starting point for building market segmentsThe best starting point for building market segments TypesTypes –Special occasion segmentation –Benefits sought –User status –Usage rate –Loyalty status –Buyer readiness stage ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ Kotler, Bowen, and Makens

©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ Kotler, Bowen, and Makens Requirements for Effective Segmentation Measurability Accessibility Substantiality Actionability ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ Kotler, Bowen, and Makens

©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ Kotler, Bowen, and Makens Size, purchasing power, profiles of segments can be measured. Segments can be effectively reached and served. Segments are large or profitable enough to serve. Measurable Accessible Substantial Actionable Effective programs can be designed to attract and serve the segments. Requirements for Effective Segmentation ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ Kotler, Bowen, and Makens

©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ Kotler, Bowen, and Makens Market Targeting Evaluating Market SegmentsEvaluating Market Segments Selecting Market SegmentsSelecting Market Segments Choosing a Market-Coverage StrategyChoosing a Market-Coverage Strategy ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ Kotler, Bowen, and Makens

©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ Kotler, Bowen, and Makens Evaluating Market Segments Segment Size and GrowthSegment Size and Growth Segment Structural AttractivenessSegment Structural Attractiveness Company Objectives and ResourcesCompany Objectives and Resources ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ Kotler, Bowen, and Makens

©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ Kotler, Bowen, and Makens Selecting Market Segments Undifferentiated MarketingUndifferentiated Marketing Bifurcated Marketing (dual)Bifurcated Marketing (dual) Differentiated MarketingDifferentiated Marketing Concentrated MarketingConcentrated Marketing ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ Kotler, Bowen, and Makens

©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ Kotler, Bowen, and Makens Choosing a Market – Coverage Strategy Company resourcesCompany resources Degree of product homogeneityDegree of product homogeneity Market homogeneityMarket homogeneity Competitors’ strategiesCompetitors’ strategies ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ Kotler, Bowen, and Makens

©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ Kotler, Bowen, and Makens Positioning Strategies Products can be positioned on specific attributes or against another product classProducts can be positioned on specific attributes or against another product class ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ Kotler, Bowen, and Makens

©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ Kotler, Bowen, and Makens Choosing and Implementing a Positioning Strategy 1.Identifying a set of possible competitive advantages upon which to build a position 2.Selecting the right competitive advantages 3.Effectively communicating and delivering the chosen position to a carefully selected target market ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ Kotler, Bowen, and Makens

©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ Kotler, Bowen, and Makens Product Differentiation Physical Attribute Differentiation Service Differentiation Personnel Differentiation Location Differentiation Image Differentiation ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ Kotler, Bowen, and Makens

©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ Kotler, Bowen, and Makens Selecting the Right Competitive Advantages Avoid : –Underpositioning - failing ever to position the company at all –Overpositioning - giving buyers too narrow a picture of the company –Confused positioning - leaving buyers with a confused image of a company ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ Kotler, Bowen, and Makens

©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ Kotler, Bowen, and Makens Selecting the Right Competitive Advantages Brand differences should meet the following criteria prior to marketing: –Important –Distinctive –Superior –Communicable –Preemptive (priority) –Affordable –Profitable ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ Kotler, Bowen, and Makens

©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ Kotler, Bowen, and Makens Positioning Measurement Perceptual mapping is a research tool used to measure a brand’s position ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ Kotler, Bowen, and Makens

©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ Kotler, Bowen, and Makens Positioning map of service level versus price. Perceptual Map ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ Kotler, Bowen, and Makens

©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ Kotler, Bowen, and Makens Best Practices Carnival Cruise lines Southwest Airlines ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ Kotler, Bowen, and Makens

©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ Kotler, Bowen, and Makens Slayt Sonu