The total market for tourism products is huge. It is made up of people looking for budget accommodation and rooms in exclusive country house hotels, of sun-worshippers and culture-vultures, of couch potatoes and ardent adventurers. You can’t hope to satisfy all of the people all of the time. Nor should you try to target all of them at once. Broadcast marketing, or trying a ‘something for everyone’ approach is expensive and rarely successful.

It is far more productive and cost-effective to identify several smaller groups of people or market segments. Segmentation means breaking markets down into a more manageable size, and gaining a precise understanding of different groups of people. Once you understand what each group needs and expects you can then choose which segments you are most likely to satisfy.

When choosing market segments you will need to ensure that they are:

• easily identifiable and distinct from the mass market;

• large enough to make targeting them worthwhile - you should also consider whether or not they are growth markets;

• easy to reach - either because they are geographically close to you or there are obvious and established channels of distributions and media through which you can target them;

Segments can be identified through numerous methods:

• age - people choose different products according to their age and activities. However, this should not be the only criteria - see below;

• economic status - for example budget accommodation providers will target people who are traveling on a restricted income;

• purpose of travel - reason for travel and any special needs. For example, a business traveller will look for efficiency and prompt service whereas a family are more likely to look for fun activities;

• nationality - as the section about overseas marketing indicates, some nationalities have a greater propensity to travel or indulge in certain activities than others. Once you have chosen specific nationalities or countries to target you will still need to define segments within that group;

• geographic location/origin - for example, visitor attractions usually find that most visitors come from within one hours’ travelling time from the place where they live or are staying;

• lifestyle, consumer attitudes and behavior - there are numerous studies and reports which break populations down into smaller sub-groups according to aspirations, attitudes and general lifestyles. You may find it useful to use an existing classification or to develop one of your own. A relatively easy lifestyle analysis which helps you picture a segment more clearly is to imagine ‘a day in the life of...’

Segmentation usually involves combining the above methods so you can develop a complete profile for different market segments. The more detail you can add about different segments the better. The total market for any product is likely to be quite wide, but by describing the differences between segments, it becomes possible to create focused and cost-effective strategies for each one.

Beware of using any of the above methods in isolation, such as simply identifying a segment such as ‘old people’. Just because they are within a similar age group, people are not all similar. Within the general grouping of ‘old people’ there are many variations. For example:

• how old is old? Perceptions vary - a ten year old would suggest that thirty is already ancient!

• income also varies - some “old” people exist on state pensions, others are still working;

• how active are they? There is a world of difference between house-bound senior citizens and the village ‘busy-body’ who is at the heart of the community.

New segmentation methods are much more sophisticated and therefore more likely to be successful. The Tourism Network has been pioneering the idea of "mood marketing" to take account of not just different mindsets but different frames of mind at different times.

When prioritising market segments, there are three main questions to ask:

• How attractive is the segment?

You will need to decide what ‘attractive’ means. This usually means that the segment is sizable, prepared to pay the market price for the product on offer, and fairly aware of the product.

• How easy is the segment to reach?

Segments which are easy to reach are usually clearly defined, can be persuaded to not choose competing products, and can be reached through established and affordable media and distribution channels.

• How much will it cost to reach the segment?

The deciding factor will often be the marketing budget. It isn’t possible to address every segment so it is essential to determine which ones will cost most money to reach and how accessible they really are. A sensible approach is to identify short and long term markets.

For guidance on a range of specific market segments click here

Susan Briggs