THE TOURIST MARKET AND SEGMENTATION

THE TOURIST MARKET

Unit 2 |
THC 8 – TOURISM & AND SEGMENTATION
HOSPITALITY MARKETING

Introduction
Learning Objectives:
At the end of this lesson,
you will be able to:

• define what a
market is;
• state the three
steps to target
marketing;
• identify the
characteristics
of a good
market
segment;
• discuss market
coverage
strategies and
Market segmentation, targeting, and positioning are key terms useful in any
positioning; and
marketing process. Identifying one's market segment will help in identifying the
• distinguish the
market's needs and wants. How their needs should be met and how to communicate
new and
such to benefit them are covered in this chapter. Market coverage strategies and
emerging
identifying one's unique selling proposition and competitive advantage will greatly
markets in the
contribute to a successful marketing plan.
Philippines.

•
Definition of a Market
A market is a set of actual and potential buyers of a product. These buyers share a
particular need or want that can be satisfied through exchange relationships (Kotler et
al. 2016). The meaning of the term market has evolved over the years. To marketing
professionals, a market is all actual and potential buyers of a product or service
(Kotler et al. 2017).

The tourism product is not for all. The tourism industry aims to target a specific set of
individuals. It is for a particular set of buyers, a niche market. There are three steps
to target marketing: (1) market segmentation, (2) market targeting, and (3) market
positioning.

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Market Segmentation
A market is comprised of varied profiles and characteristics that can be further
segregated. Imagine the market as an entire pizza that can be divided into several
pieces or an orange fruit with several segments. Each slice or segment has different
characteristics from the others. These segments differ in their wants or desires,
socioeconomic status, age, travel behavior, etc. Market segmentation is dividing the
market into distinct groups that might require separate products and/or marketing
mixes (Kotler et al. 2017). A market segment is a subgroup of the total consumer
market that shares similar characteristics and needs relevant to the purchase of a
product, service, or experience (Hsu 2008). Each segment is profiled based on its
characteristics.

Characteristics of a Market Segment

Lumsdon 1997) identified six characteristics of a segment as follows:

1. Identifiable. The people who comprise the segment can be located and
identified such that targeting them would be easy.
2. Cohesive. The consumers should be part of a whole whose specific qualities
are common to all.
3. Measurable. The marketer should be able to estimate the size and potential
spending of the members of the market segment.
4. Accessible. The members of the segment should be accessible by the
marketing efforts and promotional activities to be conducted. If they are
difficult to reach, efforts to reach out to the specific segment might be futile.
5. Substantial. Segments should be large to be substantial. If the segment is
small, it should have a high spending capability to make a significant impact
on the business's bottom line.
6. Actionable. The company has enough resources and commitment to enable
effective penetration of the identified segment to ensure effective positioning.

There is no one way of segmenting the market. Different variables for market
segmentation can be used to find out which one is the most effective. These variables
used in segmenting consumer markets include geographic, demographic,
psychographic, and behavioral.

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Table 2.1 Variables to Segment Consumer Markets
Geographic Demographic
Nations Age
States Life cycle
Regions Gender
Income
Countries
Occupation
Cities Education
Neighborhoods Religion
Barangays Race
Towns
Psychographic Behavioral
Social class Special occasions
Lifestyle Benefits
Personality Sought usage
Rate user status
Loyalty status
Buyer readiness
Source: Adapted from Kotler et al. (2016)

Variables for Segmentation

1. Geographic

Geographic segmentation is the oldest and simplest basis of

segmentation (Cook et al. 2018). It divides the market into different
geographic units such as nations, states, regions, countries, cities,
neighborhoods, barangays, towns, etc. (Kotler et al. 2017). Some companies
decide to strengthen a foothold on a certain geographic region, concentrating
their resources on ensuring deep penetration of a specific geographic
location.

2. Demographic

Although geographic segmentation is the simplest and oldest

approach to grouping tourists, demographic segmentation is the basis most
used for market segmentation (Cook et al. 2018). Demographic segmentation
refers to segmenting the market based on variables such as age, life cycle,
gender, income, occupation, education, religion, and race (Kotler et al. 2016).
It is a good idea to segment the market based on demographic variables
because consumers would have similar likes and possible consumption
patterns and behavior.

Some popular ways tourism marketers segment the market using

demographic variables are through age and life cycle, gender, and income.

The major developed markets of Europe, America, Japan, and

Australia are aging in population, while India and China are comparatively
young markets (Cooper 2006). These regions would want to avail of
significantly different products. The former would possibly like more leisure
and shopping while the latter would prefer more adventurous destinations
with nightlife.

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3. Psychographic

Psychographic segmentation was developed by marketing

researchers trying to link personality to a product. Psychographic
segmentation divides consumers based on different psychographic profiles
such as social class, lifestyle, and personality characteristics. Different social
classes will have different tastes and preferences on what they will buy. In
the Philippines, we categorize socioeconomic classes through the ABCDE
categories, with Class A being the most affluent.

Sometimes, psychographic segmentation is called lifestyle

segmentation (Cook et al. 2018). Lifestyle has an influence on what and how
consumers buy products and services. Restaurants and bars tap different
markets based on lifestyle. Personality is seen as an indicator of the type of
products people buy.

Products take on an image or a personality (outgoing, private,

adventurous, etc.) in the same way people have personality traits. Studies
have shown that consumers tend to buy products that reflect a personality
similar to theirs.

Newer forms of tourism such as adventure tourism, cultural tourism,

and ecotourism are types of tourism that the market has created based on
the market's personalities. These are types of tourism that match the likes of
the younger generations who have adventurous and upbeat personalities.

4. Behavioral

Behavioral segmentation refers to dividing groups based on their

knowledge, attitude, and use of or response to a product or service. Kotler et
al. (2017) identify behavioral variables to include special occasion
segmentation, benefits sought, user status, user rate, loyalty status, and
buyer readiness.

Special occasion segmentation involves purchases made based on

occasions such as Mothers' Day, Valentine's Day, honeymoon, anniversary,
or birthday. Buyers may also be grouped according to the benefits they seek
such as quality, ambiance, menu variety, and price. User status refers to
markets segmented based on usage of the product such as first-time users,
regular users, non-users, potential users, etc. Usage rate, on the other hand,
refers to the frequency of use categorized as light, medium, and heavy users.
Loyalty status segmentation refers to the degree to which customers are loyal
to the brand. Some buyers just go for the cheapest or most convenient, while
others stick to a brand unconditionally. Buyer readiness pertains to the
different stages buyers become ready to purchase a product. These stages
range from being unaware, slightly aware, want to buy, and intend to buy.

Behavioral segmentation is a good starting point for creating a

communication campaign to target specific segments that would seem viable
for the company.

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5. Technographic

Cooper (2006) suggests that there is a fifth variable for market

segmentation which he calls technographic segment. With the prevalence of
the Internet and the World Wide Web, there is an increasing divide between
the users and non-users of technology in searching for travel information.
The more technological savvy one is, the more information he/she gets from
the Internet. Hence, travel websites and lifestyle travel portals will allow
customers to customize their travel needs.

Market Targeting
Market segmentation shows the various
market segment opportunities available for
a company. A careful assessment of these
specific market segments will help the firm
identify which ones it should target. Market
targeting is evaluating each segment's
attractiveness and selecting one or more of
these market segments in which to operate
one's business (Kotler et al. 2017).

Kotler suggests three factors to consider in evaluating which segments should be

targeted. These factors are:
1. Segment size - refers to the current sales volume, growth rate, and high-
profit margin.
2. Attractiveness - refers to the potential impact of the segment on the
company. One that is not saturated and has few aggressive competitors
would be structurally attractive.
3. Company objectives and availability of resources - refer to the main
reasons for its decision-making and the available resources the company will
use to make its objectives a reality.

Market Coverage Strategies

In the selection of specific market segments, a company decides on a market

coverage strategy that is in line with its objectives and resources. Kotler et al. (2017)
suggest that it can adopt any of three market coverage strategies: (1) undifferentiated
marketing, (2) differentiated marketing, and (3) concentrated marketing.

In undifferentiated marketing, a company ignores market segmentation and goes

after the entire market with only one market offer (Kotler et al. 2017). This looks into
what the market has in common and is designed to reach a huge number of buyers.
This market coverage strategy can be used effectively for consumer products mainly
because a lot of buyers would need the same product. Using economies of scale,
consumer goods such as shampoo and soap could ignore differentiation and go for
the market with a single product offer. This strategy may not be effective for tourism
products.

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Figure 2.1 Undifferentiated Marketing
Product Market

Differentiated marketing approaches the market by targeting several market

segments using separate offers per segment. Companies may offer several products
for different market segments to capture a bigger chunk of the market. For instance,
Holiday Inn Galleria Suites and Crowne Plaza share a common management group,
but Crowne Plaza is more upscale than Holiday Inn Galleria Suites; thus, giving
clients an option of where to stay depending on what their budget could afford.

Figure 2.2 Differentiated Marketing

Product Market

Concentrated marketing is practiced by companies with limited resources. It

pursues getting a big share of a small market rather than a small share of a large
market. Companies are able to allot their resources in making their presence felt in a
specific market with greater impact. If the segment is well chosen, it may yield high
returns for a company. However, this strategy is risky because it is like putting all your
eggs in one basket. It is advisable to operate in at least two profitable segments.

Figure 2.3 Concentrated Marketing

Product Market

Kotler et al. (2017) suggest that the following factors be considered when choosing a
market coverage strategy:

1. Company's Resources. This refers to how much money and resources the
company has which can be allocated to marketing. If the company has limited
resources, it is logical to use concentrated marketing.
2. Degree of Product Homogeneity. If products are standardized and
identical, it is more advisable to go for undifferentiated or concentrated
marketing.
3. Market Homogeneity. If there is a diverse market, differentiated marketing is
advisable. If the market has a lot of similarities, undifferentiated marketing
may be used.
4. Competitor's Strategy. It is important to assess the strategy competitors are
using so that the correct strategy can be implemented to counter their
marketing efforts. If competition is doing undifferentiated marketing, it would
be advantageous to do differentiated or concentrated marketing. If
competitors are doing segmentation, concentrated marketing is a must.

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Many tourism marketing professionals practice micromarketing strategies to reach the

various market segments and niches that have surfaced in the light of experiential
tourism. Local marketing involves tailor fitting brands and products to the needs and
wants of different market groups (Kotler et al. 2017). Location-based marketing has
also been on the rise. Also, platforms such as Foursquare, Facebook check-in, and
Instagram execute SoLoMo marketing which stands for social+local+mobile.

Market Positioning
Market positioning is developing competitive positioning for the product and an
appropriate marketing mix (Kotler et al. 2017).

Positioning has everything to do with the deliberate way by which marketers would
want to position their product in the consciousness of their prospective customers. Its
goal is to identify the product's unique characteristics in a way that will differentiate it
in the marketplace. These three positioning concepts will help reinforce the idea of
market position: (1) unique selling proposition, (2) competitive advantage, and (3) top-
of-mind awareness.

Unique selling proposition (USP) is a term used to identify what makes the product
or service different from others. This USP may occur due to the product's physical
attributes, added services, personnel, location, or image (Kotler et al. 2010).

Competitive advantage is the product's advantage over its competitors, which is

gained by offering greater value either by offering lower prices or providing more
benefits to justify higher prices (Kotler 2016).

Top-of-mind awareness is the highest level of recall that a brand receives. It means
that the brand occupies the top spot in a consumer's mind. The ultimate top-of-mind
level a brand can reach is when it becomes synonymous with the generic. For
example, Xerox is actually a brand of a photocopying machine, but the way Filipinos
use the word is as if it were the act of photocopying. We would use the term, "pa-
xerox" when we actually mean "pa-photocopy." Market positioning is a deliberate way
of making sure that the product has a high recall in the consumer's minds relative to
its competitors.

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Some positioning strategies include the following:
1. Specific product attributes such as price and special features can be used to
position a product.
2. The product can also be positioned based on its benefits and the needs the
product fills.
3. Positioning the product based on certain classes or segments of users (e.g,
women or children as primary users) can also be done.
4. A company can decide to position itself against an existing competitor and
present its edge over said competitor.

New and Emerging Markets

The study of new and emerging markets in tourism is vital in the growth of
destinations. To obtain a sustainable competitive advantage, the process of new
market identification should be taken seriously. Tourism markets have evolved in
recent years. New customers have begun to travel, while regular travellers have
travelled more often.

Cooper et al. (2006), in their article on new and emerging markets, identified the
growth of tourism markets as fuelled by these factors on the demand side:
1. Economic growth in major source markets
2. Increase in disposable leisure time and a longer life expectancy with sound
health to travel
3. Changes in living conditions, especially city dwellers becoming more inclined
to engage in tourism
4. Rising education levels and increased access to information, stimulating
curiosity
5. Increasing international integration of life

Furthermore, Cooper et al. see tourism's supply side growing through:

1. the development of and investment in infrastructure;
2. continuous tourism product development; and
3. the elimination of legal limitations on and practical obstacles to travel.

In the long-term forecast of the World Tourism Organization (WTO), "Tourism

2020 Vision," there is still a huge potential for tourism growth. Mature markets have
not yet reached saturation while emerging markets continue to develop. For
marketers, this signals the growth potential of an ever-increasing market. Unlike other
industries where the market is already saturated and one has to compete in eating up
someone else's market share, tourism markets are growing. The challenge, however,
is to capture the fancy of the emerging markets.

Generational Travel Markets

Generational segmentation is one of the easiest ways to segment the travel
market. Using various studies, there are similarities in cohorts' travel behavior
patterns and decision-making. Regardless of age, the generational markets generally
travel to spend time with family and friends, to get away from everyday life, to relax,
and to rejuvenate (AARP 2019). However, their travel behavior differs significantly as
Boomers travel "to see," while Millennials travel "to do" (AARP 2019). Generation

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Xers will usually travel with their families and the Zennials, aside from being tech-
savvy, are the most environmentally concerned travelers.

Table 2.2 Generational Travel Trends

Generation Characteristics Travel Pattern How to Tap the Market

Baby Baby Boomers are Boomers are Baby Boomers prefer travel
Boomers portrayed as a considered the agencies or tour operators.
(1946-1964) "generation of most lucrative Tourism information and
optimism, exploration travel market travel packages should
and achievement" among generations satisfy the special demands
because of the high due to their sheer of these aging tourists
level of postwar size and affluence (Rebecca et al.
prosperity in terms of (Li et al. 2013) 2014)
educational, financial,
and social They hold 70% of This generation places
opportunities. the US's importance on the quality of
disposable income, the accommodation and
The Boomer similar to Australia service, accessibility and
generation values and other parts of easiness of travel, safety and
individual choice, the world security, value for money,
community (Cushman and tourist information, and
involvement, self- Wakefield cleanliness.
actualization, and 2020).
health and wellness (Li Boomers are attracted to
et al. 2013). Boomers, aged activities and sites that have
between 55-75, cultural and historical
have an average of themes— cultural heritage
27 vacation days a sights and activities, local
year (Expedia festivals, and historical
2018). places.

They look for value Culinary tourism is also a

and research their growing niche area for this
vacations. Cruises older generation (Li et al.
are popular with 2013).
Boomers because
of their all-inclusive
value (Kotler
2016).

Generation X Generation X values Generation X Generation X travellers are

(1965-1980) entrepreneurial spirit, households with heavy users of websites as
loyalty, independence, children are more external information sources
creativity, and likely to travel with (Rebecca et al. 2014).
information. children than other
generations (Li et Gen Xers enjoy
Gen Xers are al. 2013). environmental or ecological
hardworking and value trips.
the quality of work-life They have an
balance. average of 26 They also desire relaxation-
vacation days per beach destinations and
Exposed to a wide year as a result of wellness services can be
array of brands and work and family offered to this market.
products, this commitments
generation tends to (Expedia 2018). They are likely to participate
save more compared in shopping tourism and seek
to other generations. They like quality, entertainment during
are a major market relaxation (Li et al. 2013).
for business travel,
and are willing to

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spend (Kotler They give high importance to
2016). word of mouth than a nice
brochure (Kotler
2016).

Millennials Millennials are smart, Generation Y is Word of mouth from friends

(1981-1996) creative, optimistic, seen as the next and relatives influences
(Also called achievement-oriented, big consumer Generation
Generation Y) and tech-savvy. spending market as Y tourists' travel decision-
they make travel making.
Because of their their top priority.
community orientation, Travel guidebooks are also
they are motivated by Millennials, who the primary information
"helping others, have the lowest source preferred by this
improving the household income generation (Rebecca et al.
environment and as they are just 2014).
making the world a starting their
better place." career, are the This generation pursues
most likely to go nonmainstream destinations
They are resilient, into debt for travel which can offer more
committed, and loyal (Li et al. 2013). meaningful experiences,
when dedicated to an making Asia and Eastern
idea, cause, or They have an Europe their ideal
product. average of 35 destinations.
vacation days a
year (Expedia Similar to Gen Xers,
2018). Millennials also long for
relaxation and are likely to
join environmental excursions
(Li et al. 2013).

Generation Z Generation Z is the Gen Z is said to In making travel decisions,

(1997-2012) largest cohort alive have a powerful Gen Z members, like
(Also called with over two billion influence on family Millennials, are most heavily
Zennials) people globally or 26% holidays as their influenced by social media.
of the world's parents prefer to
population (Cushman consult them Wi-fi is an absolute necessity
and Wakefield before booking for Gen Z, and they are likely
2020). trips. to book hotels based on free
Internet access.
Generation Z has been Travelers from this
raised with the generation are Gen Z travelers are open-
changes caused by the budget conscious minded, bucket list oriented,
Internet, smartphones, and usually begin and look for off-the-beaten-
available network, and their travel without path locations; thus, they are
digital media. a set destination in a viable market for adventure
mind (Robinson tourism.
Zennials are highly 2018).
educated, socially and When planning a trip,
environmentally aware, They have an Zennials are mindful of the
creative, innovative, average of 29 planet and the effects of their
and able to multitask in vacation days per travel decisions on it (Expedia
progressively changing year (Expedia 2018).
environments 2018).
(Robinson
2019).

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Marketing Nugget: Maribojo, Bohol and Its Target Market

At present, Maribojoc is not top of mind for tourists who travel to Bohol. The Tier 1 destinations
are Panglao Island and Tagbilaran City. Panglao Island and Tagbilaran are the primary
destinations tourists going to Bohol travel to. Panglao Island, with its white sand beaches, is the
top leisure destination in Bohol. In 2017, the Tourism Infrastructure and Enterprise Zone Authority
(TIEZA) approved Panglao Bay's comprehensive tourism development plan and its designation
as one of TIEZA's Flagship Tourism Enterprise Zones. A 56-hectare site will be developed as an
integrated resort containing resorts for various markets, a marine center and beach club, a
convention facility, a village market among others'. Complementing this development is the
opening of the New Bohol International Airport in Panglao Island last year.

Tagbilaran and its countryside tours, with its historical significance as the location of the Blood
Compact and its centuries-old Baclayon Church, is a perfect attraction for business and leisure
tourists who would also be visiting the Chocolate Hills and the tarsiers.

Bohol's most popular countryside day tour is one that allows tourists to explore the historical,
cultural, and natural resources of the province. This popular tour covers the following sites:
• Blood Compact Shrine (Tagbilaran)
• Baclayon Church and Museum (Baclayon)
• Tarsier Conservation Area (Loboc)
• Loboc River for lunch (Loboc)
• Man-made Forest (Bilar)
• Butterfly Garden (Bilar)
• Chocolate Hills (Carmen)
• Aproniana Souvenir Shop (Baclayon)
• Optional visits to the Hanging Bridge (Sevilla) and Bohol Python (Baclayon)

A tour of Panglao Island can also be availed of as well as an island-hopping tour to

explore Balicasag Island and the Virgin Island for some snorkelling and dolphin watching.

In the evening, Maribojoc's Firefly Watching Tour Package ($90.00 for two persons) in Abatan,
Maribojoc and dinner at Bohol Bee Farm (Panglao) can be availed of. Given this tourism circuit, it
can be surmised that Maribojoc is neither a primary nor secondary destination in Bohol. It may be
considered a tertiary destination.

As such, the destination's pull factors (motivations that drive a person to visit a particular
destination) should be strong for tourists to stay longer and experience what Maribojoc has to
offer. These motivations include novelty and education (Crompton 1979).

These factors may encourage a tourist to experience something new and different. By creating
new and exciting tourism activities within Maribojoc, it may increase a tourist's motivation to visit.
With proper packaging, marketing, and promotions, its attractions Punta Cruz, Padhan Prayer

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Mountain, and Anislag River-may become the next big tourist attractions to encourage first-time
and repeat visitors to Bohol.

Points to Ponder:
• What are the unique characteristics and activities in Maribojoc, Bohol that make it a good
tourist destination?
• What is the ideal primary market segment Maribojoc, Bohol should target? Why?

Types of Markets

Emerging markets can also be segmented using demographic and psychographic

variables. Some of the Philippines emerging markets include the family market, the
senior market, the youth market, MICE (Meetings, Incentives, Conference, and
Events), and the business market. Furthermore, significant growth markets include
the solo travel market, LGBTQ+; bleisure (business and leisure), and wellness
markets.

The Family Market

There are three types of vacation decision-makers within the family market: (1) joint
decision- making families, (2) husband making the decision, and (3) wife making the
decision.

In a study conducted by Nichols and Snepenger (1988) on family decision-making

and tourism behaviors and attitudes, they made the following conclusions:

Joint decision-making families plan trips with the longest period of time and make
use of the widest range of information sources. This type of family participates in a lot
of leisure activities. Thus, promotional materials should be made available early,
dispersed in a variety of media sources, and designed for spouses of the same age.

Families where the husband makes the decision for the vacation destination
Are characterized by spouses with greater age differences. Promotional activities are
directed to the male spouse; hence, it should emphasize outdoor recreation.
Husband-dominant families spend the largest amount of money on their vacations.

Wife-dominant families form the smallest segment of the family market. If the wife
makes the decision on vacations, it is characterized by a short planning duration
that uses the fewest information sources for planning. This type of family spends the
least amount of money and the shortest duration of time compared to joint decision-
making and husband-dominant families.

With the entry of more women into the workforce and the availability of information on
the Internet, these findings made in 1988 may have changed over time. Further
research in this area may be useful in understanding the travel behavior of families.
Aside from segmenting the family market using decision-makers as a standard,
another way is to use the concept of the family life cycle (FLC). The family life cycle
refers to the progressive stages through which individuals and families proceed over
time. It describes the patterns of relative want and prosperity experienced by family
members (Lawson 1991). The FLC describes how one moves from being a member
of his/ her nuclear family into building his/her own family with the arrival, growth, and

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dispersal of children. Travel behavior changes depending on the family's stage in the
life cycle mainly due to time and budgetary constraints in raising a family.

The Senior Market

The senior market is also known as the silver market or third-age tourism. There was
even a campaign known as SKI which encourages the elderly to go on vacations to
Spend Kid's Inheritance. This market also goes by other names such as the mature
market, retirees, or empty nesters. There is clearly a high level of demand for travel
within the senior market. They have the time, money, and desire to travel. They look
at retirement as an opportunity for personal development and improvement. There
are assumptions that the senior market is healthier, wealthier, and more active than
previous generations of the same age (Moscardo 2006). There is, however, a danger
of categorizing the senior market into one single market. The so-called Baby
Boomers have different travel interests compared to their older silent generation
cohorts (Lehto 2006).

In the United States, the US Census Bureau estimates that the number of senior
citizens aged 65 and over in the year 2040 will be 1.3 billion worldwide, representing
14% of the world population (Cook et al. 2018). The American population is aging and
will continuously increase as part of its total population. In many countries throughout
the world, similar demographic shifts are taking place as well.

However, the senior market also has limitations and constraints that need to be taken
into account when traveling. These factors include safety and security, health issues,
availability, costs, family responsibilities, poor information about suitable options
(Moscardo 2006), and previous experiences (Lohmann and Danielsson 2001). The
senior market in the Philippines can be characterized into two: those with retirement
benefits and those who rely on their children for sustenance. With the increasing
costs of health care and medicines in the Philippines and the meager social security
provisions provided to senior citizens, the Philippine silver market is a niche market.

It is also important to say that there may be a danger of age-based stereotyping.

Facilities and services that appeal to the senior market may be developed for
establishments that want to target this age group, but care must be exercised that
they do not send negative signals to this sensitive market.

Marketing Nugget: The Senior Market

In a study of the travel behavior patterns of Metro Manila senior citizens with retirement benefits
conducted by Christian Magno (2012), results indicated that this specific market travels from one
to three times a year. These senior citizens, since they have retirement benefits and do not rely
on their children for sustenance, are able to make their own travel decisions. This market
segment is an interesting segment to conduct a research on, especially since they have a lot of
time in their hands to engage in leisure activities; tourism, being one such activity.

Data revealed that this type of market does not choose the most expensive option available as
long as differences in comfort and experience are not that significant. The study further states that
this group is considered midcentric, having the qualities of both allocentrics (adventure seeking)
and psychocentrics (familiar). The results showed that seniors are willing to participate in new
activities and discover new destinations as long as there are no physical or financial constraints.
The Baby Boomers are even willing to engage in some adventure tourism activities. They engage
in ecotourism and watch their more adventurous counterparts. They also prefer buying packaged
tours to planning the trip on their own.

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 Unit 2 | THE TOURIST MARKET AND SEGMENTATION
THC 8 – TOURISM &
HOSPITALITY MARKETING
Points to Ponder:
• What are the unique characteristics of the senior market that make them a viable market
for tourism products?
• What tourism products can we sell to the senior market?

The Youth Market

Research has shown that long-distance youth travellers are primarily experience-
seekers, collecting unique experiences that will serve to build their self-identity
narratives (Richards and Wislon 2006). There is a growth of travel participation
among the youth market that is fueled by several factors, enumerated by Richards et
al. (2006), as follows:

1. Increased participation in higher education

2. Increased travel budgets (parental contribution, savings, and work)
3. Work and travel combinations
4. The rise of low-cost/budget airlines
5. Shorter employment contracts leading to significant gaps in employment
6. The global rise of Internet culture
7. Growth of independent travel guidebooks

Backpacking, which used to be a western habit, has been acquired by countries such
as China, India, and Korea. The Korean student market is a major market in the
Philippines. Some schools have a considerable percentage of Koreans. Youth study
exchange programs, internships, and volunteer work have also encouraged parents
to send their children abroad.

The MICE Market and Business Tourism

The Meetings, Incentives, Conferences (Conventions), and Exhibitions (MICE)

industry is extensively and rapidly growing (Ladkin 2006). Collectively known as the
events industry, this type of travel is connected but not limited to business travel.
These sectors have differences but also have overlaps that make it convenient to put
them together as one growing segment of the tourism industry. All these events need
a conglomeration of products and services such as transportation, accommodations,
food and beverage, banquet facilities, entertainment, and shopping.

Conference tourism refers to all activities associated with planning, travel to, and
participation in conferences and meetings, both domestic and international (Ladkin
2006).

An additional benefit is that, more often than not, delegates extend their stay after the
event for leisure purposes (sightseeing and shopping) and are joined by their
spouses, children, and / or friends.

Incentive travel is the most lucrative of the MICE market. Incentive travel comes in
the form of a reward for employees or business partners; hence, luxury is a natural
consequence. Most of the travel requirements are paid for by the giver of the
incentive, and participants are sometimes given pocket money for their other needs.
Thus, you can expect high per capita expenditure for the incentive travel market.

Important elements in venue selection for the MICE market were itemized by Ladkin

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 Unit 2 | THE TOURIST MARKET AND SEGMENTATION
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HOSPITALITY MARKETING
(2006) as follows: cost, location and accessibility, time and duration of the
conference, technical requirements, size of the conference, configuration of the
rooms, destination image, and leisure opportunities. For destinations and
establishments targeting the MICE market, they should continue to improve their
services, facilities, and the design of their venue; be abreast of information
technology developments; and maintain competitive destinations that offer value for
money.

Business travel, on the other hand, is considered to be the backbone or "bread and
butter" of the tourism industry because businesspeople are often required to travel as
a part of their day-to-day activities (Cook et al. 2018). Although this type of travel is
built around the MICE markets (also referred to as Professional Travel), the demand
for business travel is inelastic, which means demand is not affected due to price
fluctuation. Businesspeople typically have to travel on short notice at specific times
and destinations; thus, they are willing to pay higher fares.

In the US, direct spending on business travel by domestic and international travelers,
including expenditures on meetings, events, and incentive programs (MICE), totaled
$334.2 billion in 2019 (US Travel Association 2020). This accounts for $139.3 billion
for MICE travel. Accounted were 464.4 million trips by US residents for business
purposes with 38% for meetings and events in 2019.

The Solo Travel Market

Solo travel is one of the fastest-growing markets for tourism as shifts in social
structure and lifestyles, such as self-partnering, childless couples, and later
marriages, continuously contribute to the massive change in travel demands. This
type of travel market is often confused with the free independent travelers (FIT) who
are known to travel with self-booked itineraries and do not join traditional guided
tours. Solo travellers prefer freedom and flexibility but in a more structured and
organized style (Laesser et al. 2016).

Most studies conducted on this market were designed from a gender- and age-
related perspective or from an adventure and backpacking tourism approach. The
findings of these studies revealed that solo travellers are largely either young or
female and / or have a relatively high affinity toward adventure and backpacking
tourism.

This holds true as 47% of Overseas Adventure Travel (OAT) travellers are registered
as "solo," and 85% of these travellers are women (OAT 2019). Motivations of women
traveling alone relate to their desire of challenging themselves, finding autonomy and
self-determination, meeting new people, and going out of their comfort zone. It is vital
for destination managers to highlight the benefits of traveling alone by offering special
packages for those who prefer to go solo (Bianchi 2015).

The LGBTQ+ Market

According to the International LGBTQ+ Travel Association (IGLTA), LGBT tourism

refers to the development and marketing of tourism products and services to lesbian,
gay, bisexual, or transgender people. This market is recognized as a segment that
travels with greater frequency and higher-than-average spending patterns (UNWTO
2017).

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More than product development and marketing, travel service providers, such as
airlines and hotel chains, sought to assure the LGBT people who are engaging and
participating in tourism activities that they are welcome and respected. Being
welcomed and respected is unfortunately not assured in all countries in the world.
The Spartacus Gay Travel Index (2020), consisting of 17 categories, ranks countries
where it is more dangerous or friendlier for LGBT people to live in and travel to.
Canada, Malta, and Sweden are ranked as the most LGBT-friendly countries, while
the Philippines is ranked 92nd.

The Bleisure Market (Business and Leisure)

Bleisure, coined by the Future Laboratory in Europe, is the blending of business and
leisure tourism as travelers extend their business visit with a leisure trip. It is said that
this trend has two components: (1) spouses or children tag along on trips for a few
days of family fun and (2) lone leisure and sports activities often by younger travelers
(Tala et al. 2011). On average, business travelers take six business trips of 3.9 days
per year, and their desire to find an appropriate work-life balance makes them extend
their trips by an average of 2.9 days for leisure.

Based on Expedia's survey with more than 2,500 bleisure travelers as respondents,
there would be a huge opportunity for the tourism industry to strategize how to tap
into this high-yield market. Bleisure drives tourist spending; according to the study,
over half of bleisure travellers spend an equivalent amount, or more, on a bleisure trip
when compared to a leisure trip (Expedia 2018).

The leading factors in extending for bleisure depend on the destination's great
entertainment and its "bucket list" or must-visit sites. Bleisure travellers are drawn to
arts and culture, and that's why destinations can easily capitalize on their unique
cuisine and culinary assets. Natural and historical sightseeing also appeal to this
market (Expedia 2018).

Wellness Tourism

The Global Wellness Institute defines wellness tourism as travel with the pursuit of
maintaining or enhancing one's personal holistic wellbeing - balance of the physical,
mental, emotional, and spiritual domains of human life.

This tourism activity is often merged with medical tourism by consumers and
destination marketing organizations alike. Medical tourism involves the use of
evidence-based medical healing services, both invasive and non-invasive.
Preventive, proactive, and lifestyle-enhancing activities like fitness, healthy eating,
relaxation, pampering, and healing treatments are some of the main motivations of
tourists who engage in this type of tourism activity (GWI 2018).

Wellness tourists can be further classified into two: primary wellness traveler, a
traveler whose choice is primarily motivated by wellness, and secondary wellness
traveler, a traveler who seeks to maintain wellness while traveling or who participates
in wellness experiences while taking any type of trip for leisure or business (GWI
2018).

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 THE TOURIST MARKET AND SEGMENTATION

Name: Date:
Course: Score:

PERFORMANCE TASK 2
Fast-Food Observation

Visit or observe a fast-food restaurant. Watch what different people eat. What do
children usually eat? What do parents or adults eat? What do elderly people eat?
Who do you think the restaurant is mainly serving? How do they attract these
customers?
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Attach photo evidence

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Name: Date:
Course: Score:

WRITTEN ACTIVITY 2
Instructions: Answer the following questions briefly.

1. What is a market in the context of tourism and hospitality?

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2. What are the three main steps involved in target marketing? Briefly explain each.
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3. What makes a good market segment? Describe its key characteristics.

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4. Compare the three market coverage strategies. What are their strengths and
limitations?
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5. How can positioning strategies be used effectively to match a destination or

tourism product with its ideal market?
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DR. KIEL PATRICK I. RELIMBO AKLAN POLYTECHNIC COLLEGE 18