MARKET SEGMENTATION

Recreation and tourism businesses and communities often make the mistake of attempting to be all things to all people. It is difficult, and risky, to develop marketing strategies for the mass market. Strategies designed for the "average" customer often result in unappealing products, prices, and promotional messages. For example, it would be difficult to develop a campground that would be equally attractive to recreational vehicle campers and backpackers or promote a property to serve both snowmobilers and nature oriented cross country skiers. Marketing is strongly based on market segmentation and target marketing.Market segmentation is the process of: (1) taking existing and/or potential customers/visitors (market) and categorizing them into groups with similar preferences referred to as "market segments;"
(2) selecting the most promising segments as "target markets;" and
(3) designing "marketing mixes," or strategies (combination of the 4 Ps), which satisfy the special needs, desires and behavior of the target markets.
There is no unique or best way to segment markets, but ways in which customers can be grouped are:
(1) location of residence---instate, out-of-state, local;
(2) demographics---age, income, family status, education;
(3) equipment ownership/use---RV's, sailboats, canoes, tents, snowmobiles;
(4) important product attributes---price, quality, quantity; and
(5) lifestyle attributes---activities, interests, opinions. To be useful, the segment identification process should result in segments that suggest marketing efforts that will be effective in attracting them and at least one segment large enough to justify specialized marketing efforts.
After segments have been identified, the business or community must select the "target markets," those segments which offer them the greatest opportunity. When determining target markets, consideration should be given to:
(1) existing and future sales potential of each segment;
(2) the amount and strength of competition for each segment;
(3) the ability to offer a marketing mix which will be successful in attracting each segment;
(4) the cost of servicing each segment; and
(5) each segment's contribution to accomplishing overall business/community objectives.
It is often wiser to target smaller segments that are presently not being served, or served inadequately, than to go after larger segments for which there is a great deal of competition.
MARKETING OBJECTIVES FOR EACH SEGMENT
Marketing objectives which contribute to the accomplishment of the overall business objectives should be established for each target market. Objectives serve a number of functions including:
(1) guidance for developing marketing mixes for different target markets;
(2) information for allocating the marketing budget between target markets;
(3) a basis for objectively evaluating the effectiveness of the marketing mixes (setting standards); and
(4) a framework for integrating the different marketing mixes into the overall marketing plan.
The target market objectives should:
(1) be expressed in quantitative terms;
(2) be measurable;
(3) specify the target market; and
(4) indicate the time period in which the objective is to be accomplished.