Market segmentation


DMO Stories

Niche marketing is becoming more important in every industry. It has long since been established that it is better for companies to target specific groups and persons with common, recognisable characteristics than attempt to sell themselves in a broad brush fashion. Even the world's biggest manufacturing companies assiduously pinpoint the market segments that they wish to target, and often assign a completely different niche for each of their product categories.

Thus, we have recently seen Apple - the world’s number one brand according to the authoritative Interbrand survey - heavily pushing the fitness-related aspects of their smartphones. This is being done ahead of the launch of their first smartwatch, almost certain to be called the iWatch, with market analysts assuming that this product will have a strong fitness focus. Even a company as vast as Apple, with a market cap of nearly half $1 trillion, does not merely release products and assume that they will sell due to their market prominence.

Targeting travel niches

The same principle applies to the tourist industry. If tourist boards are to successfully attract people to visit their country, then selling the nation to a potential market should not merely focus on making the country here as attractive as possible. It is also necessary to identify precisely what type of people might wish to visit that nation, and what can be done to particularly appeal to them.

In accordance with this principle, Destination Marketing Organisations (DMOs) are increasingly engaging in market segmentation in order to more efficiently target potential tourists. Less obvious tourist destinations need to emphasise the elements of their make-up which may not be immediately apparent or obviously tourism-related. But they're also finding that some groups are in fact attracted to their unique characteristics.

So recently tourist boards from Finland and Denmark have underlined this trend toward market segmentation with their particular approach to attracting visitors. The Wonderful Copenhagen organisation - the tourism and event destination organisation for the Danish capital - recently went to great lengths to understand the digital behaviour and needs of travellers in an attempt to appeal to this distinct market segment.

And the Finnish National Tourist Board has also made great capital from successfully translating the qualities associated with Finland into into a compelling and successful branding strategy. Its Visit Finland campaign targeted so-called ‘Modern Humanists’; a primary target market comprised of individuals with high levels of education, seeking ‘authentic’ insight and experiences, and who are drawn to nature and cultural activities centred around art.

Business traveller segmentation

Additionally, research conducted by the Global Business Travel Association (GBTA) of a group of frequent business travellers found that many of them share common characteristics. The contemporary business traveller is likely to be connected with multiple forms of technology, enthusiastic about the process of business travel itself, and high value being able to keep in touch with loved ones while on the road. But though GBTA found business travellers generally in concurrence on these matters, they were also able to identify archetypal segments among the business travelling community as a whole.

GBTA used sophisticated statistical analysis to group travellers into these different segments, and were able to recognise five distinct niches. 97 percent of ‘Passionate High- Tech Travellers’ found that travel opportunities make their work more pleasurable. Most ‘Veterans’ value connectivity with family particularly highly, and do not wish to be hindered by a lack of equipment while on the road.

‘New Recruits’ are that marketers’ dream group; the idealised 18 to 35 ambitious, upwardly mobile sector. According to GBTA’s research, 96% of New Recruits find excuses to travel more frequently for work than is actually necessary. The ‘Wide-Eyed and Anxious’ group was also young and enthusiastic, but found to be uncertain about navigating through new places, and could benefit from guidance and travel information.

Finally, ‘Road-Weary Travellers’, as the title of the group would suggest, travel often but frequently under duress.

Understanding your target market

For DMOs to target these different demographics means understanding their needs and desires. Offering entertainment and hotel discounts, for example, might appeal to the ‘Road-Weary Travellers’ segment. ‘Passionate High-Tech Travellers’ love using online platforms, so this provides an obvious route of contact for marketers.

The increasing sophistication of consumer technology means that market segmentation is both increasingly feasible and viable. Many tourists and travellers who appear to have similar portfolios in terms of travel in fact want completely different things. Identifying traveller demographics and then effectively targeting market segmentation can really pay off for all DMOs and tourist boards.

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