HTM 231 EXAM 2!

What is market segmentation?
the division of the overall market for a service into groups of customers with common characteristics which a specific service appeals
Two steps
-Dividing whole market into groups (market segments) with common characteristics
-Selecting those market segments (target markets) that the organization is best able to serve
Target market
a market segment selected by a hospitality and travel organization for marketing attention
Why segmentation?
allows the organization to focus effort and marketing dollars in the most effective way, while asking questions to obtain a specific target market:
Questions
-Who? Which market segments should we pursue?
-What? What are they looking for in our types of services?
-How? How do we develop our marketing programs to best fit their needs and wants?
-Where? Where do we promote our services?
-When? When do we promote them?
Benefits
-More effective use of marketing dollars
-Clearer understanding of the needs and wants of selected customer groups
-More effective positioning
-Greater precision in selecting promotional vehicles and techniques
Limitations
-More expensive than using a non-segmented approach
-Difficult to select the best customer characteristics to use for segmenting a market
-Difficult to know how finely or broadly the segment
-Tendency to appeal to segments that are not viable
What are the three segmentation approaches?
-Single-stage: only one of seven segmentation characteristics is used
-Two-stage: a primary segmentation bas is chosen and then customers are further subdivided using a second segmentation base
-Multi-stage: more than two segmentation characteristics are used
What are the eight criteria used to determine the viability of market segments?
-Measurable
-Substantial
-Accessible
-Defensible
-Durable
-Competitive
-Homogeneous
-Compatible
What are the seven bases commonly used for segmenting hospitality and travel markets? (Segmentation characteristics)
-Geographic
-Demographic and socioeconomic
-Purpose of trip
-Psycho-graphic
-Behavioral
-Product-related
-Distribution channel
In defining market segmentation, which of the following statements best reflects the relationship of market segments and target markets?
There are far more target markets than there are market segments available
When the beer industry is segmented by consumers’ preference for brands, consumption location, and preference for beer strength, it is called
A multi-stage segmentation approach
Marketing strategy
approaches that recognize differences among target markets by using individualized marketing mixes
Positioning
the development of a service and marketing mix to occupy a specific place in the minds of customers within target markets, also
Single target market
target market specialization and avoiding head-to-head competition with industry sector leaders; popular with smaller and low-market-share organizations
Niching
using a strategy to appeal only to small or narrow target markets
Concentrated
similar to single-target-market with additional market segments being pursued; most independent hotels and resorts; offer a single product that serves the needs of several lodging market segments
Full coverage
most expensive, used by industry sector leaders like nationally based chains with many branch locations; provide a service for every target market and use a unique marketing mix to promote each one separately
Brand segmentation
developing brands that are designed to appeal to a specific target market or sets of target markets
Undifferentiated
overlooks segment differences and uses the same marketing mix for all target markets
Product Life Cycle (PLC)
-Introduction stage
-Growth stage
-Maturity stage
-Decline stage
Industry position
-Market leader
-Market challenger
-Market follower
-Market nicher
What are the pros and cons of single target market strategy?
-Pros: It allows a firm to specialize; can focus all energies on satisfying one group’s needs; A firm with limited resources can compete with larger organizations
-Cons: Puts all eggs in one basket; Small shift in the population or consumer tastes can greatly affect the firm; May have trouble expanding into new markets (especially up-market)
What are the pros and cons of full market coverage strategies?
-Pros: Shift excess capacity; Can achieve same market coverage as with mass marketing; Price differentials among different brands can be maintained; Consumers in each segment may be willing to pay a premium for the tailor-made product; Less risk, not relying on one market
-Cons: Demands a greater number of processes; Costs and resources and increased marketing costs through selling through different channels and promoting more brands; Must be careful to maintain the product distinctiveness in each consumer group and guard its overall image
Identify the reasons that have made positioning essential in today’s business climate.
-Human perceptual processes
-Intensified competition
-Volume of commercial messages
List and describe the steps required for effective positioning (the five Ds).
-Documenting: What benefits are the most important to your current and potential customers?
-Deciding: What image do you want your current and potential customers to have of your organization?
-Differentiating: Which competitors do you want to appear different from, and what are the factors that you will use to make your organization different from them?
-Designing: How will you develop and communicate these differences?
-Delivering: How will you make good on what you’ve promised ,and how do you make sure that you have “delivered?”
Describe the six different approaches to positioning.
-Specific product features
-Benefits, problem solution, or needs
-Specific usage occasion
-User category
-Against another product
-Product class dissociation
Ryan Air utilizes this strategy
Slow-Penetration strategy
The “Me-too” approach that many hospitality organizations adopt is an example of this strategy based on industry positions
Market followers
What is a brand?
A name, term, sign, symbol, or design, or a combination of them, intended to identify the goods and services of one seller or group of sellers and to differentiate them from those of competition
What are the classical brand components?
-Names, symbols/logos, slogan
-Build brand equity and awareness
-Brand image, identity
-The outward manifestation of the essence of a corporate brand, product brand, service brand or branded environment
-Brand associations
Brand equity
the positive differential effect that knowing the brand name has on customer response to the product or service
Brand personality
the specific mix of human traits that may be attributed to a particular brand
Point of Parity (POP)
not necessarily unique to the brand but may in fact be shared with other brands
Point of Differentiation (POD)
attributes or benefits that consumers strongly associated with a brand, positively evaluate, and believe that they could not find to the same exact with a competitive brand
What does Projective Technique do for marketers?
comparison, completion, interpretation
Ritz Carlton
slow skimming strategy (high price, low promotion)
Marriott
“Multi-tasking made fun”
What does “USP” for an organization stand for?
Unique Selling Proposition
The PIB model discussed in class refers to:
positioning, image and branding
Seth Godin
Sliced bread and other marketing delights
Product levels
anything that can be offered to a market for attention, acquisition, use or consumption that might satisfy a want or need
Core Product
-What the buyer is really buying
-Every product is a package of problem-solving services
Facilitating Products
Goods or services that must be present for the guest to use the core product
Supporting Products
Extra products offered to add value to the core product and help to differentiate it from the competition
Augmented Product
Includes accessibility, atmosphere, customer interaction with the service organization, customer participation, and customers’ interaction with each other.
Product offerings
-Breadth (width): the number of different services provided by an organization
-Depth (length: the number of similar services provided by an organization
Types of partnerships
-Customers
-Organizations in the same business
-Organizations in related businesses
-Organizations in nonrelated businesses
-Online alliances
What does a marketing plan look like?
a written plan that is used to guide an organization’s marketing activities for a period of two years or less; detailed and specific, and helps organization coordinate the many steps and people that play a role in marketing
Marketing plan requirements
fact-based, organized, programmed, budgeted, flexible, controllable, internally consistent and interrelated, clear and simple
Travel distribution: The prisoner’s dilemma
Expedia’s approach of dealing separately with each industry player, twisting their arms and getting concessions by playing hotel companies against each other to get better discounts
The other C Word
-Other C Word = confidence
-Confidence x empathy = great content
The check-in and check-out services in a hotel are examples of:
Facilitating products
Accessibility, atmosphere, customer interaction with the organization are examples of which level of the product concept:
The augmented product
It is difficult for hospitality businesses to manage the augmented product compared to the other three levels of product.
True
Brand personality is becoming increasingly unimportant because there is no need to attribute the specific mix of human traits to a particular brand.
False