Travel Market - Segmentation Essay Example for Free

Travel Market Segmentation Essay 1. The Travel Market can be segmented into 3 segments: Luxury travellers, Adventurers and Budget travellers. These segments are identified by demographics like age and income, psychological factors like personality, and benefits sought like needs and product features. Luxury travellers are usually older or middle-aged consumers who are already financially prosperous and look for relaxation and rejuvenation from their stressful positions. They can also be retirees. Luxury travellers will be willing to pay more for value, quality and service, and they look for quality relaxation and experience when looking for a place to reside while travelling. Luxury travellers will respond well to Banyan Holding’s Banyan and Laguna resorts and hotel line. Banyan tree hotels and resorts seek to have guests â€Å"pampered with a warm and friendly retreat experience† and are targeted to those â€Å"who place a premium on exclusive and unique localtes, with a penchant for the indulgent, luxurious and exotic† (Marketing in Asia 2nd Ed, p714-715). These high-end customers desire personalized service, ambience, and design, and a self-contained, personal retreat with private and tasteful amenities (Marketing in Asia 2nd Ed, p715). Luxury travellers who go on trips with their family members will prefer Laguna resorts and hotels as it provides a wide range of amenities for children to elderly, like the children’s suite, Laguna shopping centre and Angsana Spas. The Laguna hotels offers a wider range of services for a broader base of targeted audience, hence appealing to luxury travellers who travel with their family. Adv enturers are younger working adults around their twenties to late thirties who are financially independent and willing to spend. These consumers look for exotic places and place high emphasis on outdoor-recreation. They value authenticity and look for opportunities to immerse themselves in the local culture. People who go for adventure travelling would look for places that are less urbanized and richer in culture. Authenticity and thrill will be their main concern hence location and convenience would matter less. Adventurers will respond well to Banyan Tree’s sister brand, Angsana Hotels and resorts. The hotels are designed to be contemporary and which, and marketed with emphasis on outdoors-recreation which will appeal to such travellers. They also have a range of adventurous activities offered, like bungee jumping, white-water rafting and trekking. A great selling point of Angsana hotels is that it is located in unique world heritage site locales which offer adventurers a rustic experience with the added bonus of comfort and luxury. Budget travellers are identified to be in the lower to middle income group and are financially independent but not holding large amounts of disposable income for leisure activities. These travellers are sometimes young parents who hold tight budgets when it comes to travelling as they need to set aside large portions of their income for their children’s education and to support their own parents. They seek for benefits like low prices and promotions and do not always aim for quality or service. These consumers will not be prone to consume Banyan Tree Holding’s products and services as the products offered are generally high-end and too expensive. These consumers will likely to be working hard to support their families and hence unable to go for Angsana or Banyan spa treatments as well due to the lack of time. When travelling, these consumers will go for cheaper hotel options instead as they do not place high emphasis on special product features like adventurous amenities or quality of the services. 2. The attractiveness of the market segments can be assessed by the market size, the expected growth, the competitive position, the cost of reaching the segment and the compatibility with the Banyan Tree’s objectives and resources. In terms of market size, the budget travellers take up the largest percentage of leisure travellers while adventurers take up the least. In United States, the top 1% households own 35.4% of all privately held wealth (Domhoff, 2013). Wealth distribution is similar in the rest of the world; small proportion of people holding majority of the wealth. As such, the adventurers and luxury travellers take up a much smaller market size while budget travellers are aplenty. In terms of expected growth, the luxury travellers are expected to grow the fastest. Baby boomers, who are born between 1946 to 1964, are at their prime of their careers and some may already be retired. As these people age, the financially prosperous bunch of them will be expected to go travelling on retirement trips and they will have the financial capacity to spend on quality services and experiences. The luxury travellers will thus be expected to grow the fastest. The growth of the adventurers and budget travellers will then depend on the state of the economy and birth rate. Developed countries now face declining birth rates and an aging population, which causes both the adventurers and budget travellers to decrease in size or grow at a slower pace. For competitive position, the market for budget travellers will be the most competitive as most options are available. These competing hotels and motels are largely s imilar, providing homogenous amenities and services with price as the main selling point. Hence, it will be difficult to compete against these hotels as lowering price too much will start a price war, which in turn causes damage to all producers. Joining this market will not guarantee a significant market share as there are many firms and the products are mostly homogenous. In the luxury and adventure travelling segments, the hotels are largely different with their own selling points. For example the Maison Souvannaphoum Hotel in Luang Prabang would offer visitors a cultural and scenic experience of the Mekong River and hills of Laos, an experience that will not be found in any other hotels. The luxury hotels offer different scenic views and quality service, hence these hotels compete via product differentiation. There are less firms and hence more competition, but it also means that there will be a chance of getting a large market share should Banyan tree decide to invest in it. In terms of cost, marketing Banyan Tree’s products too all three different segments of consumers will take roughly the same costs. These will include advertising costs on websites, newspapers and tie-ups with travelling agencies. In terms of compatibility, reaching out to the budget travellers will be most costly as brand new budget hotels will have to be built, which requires a large amount of capital. Marketing Banyan Tree Holding’s hotels and services to the budget travellers will also not be effective as the product features of Banyan tree’s products are incompatible with the features these consumers are looking for. Reaching out to luxury travellers and adventurers will be easier as they will already be receptive to the products offered by Banyan Tree. In conclusion, Banyan Tree Holdings should focus on the Luxury Travellers market segment as they have the highest potential growth rate and the products which these consumers are looking for tally with the products Banyan Tree Holdings offer. 3. Companies in the travel industry can carry out product positioning by emphasizing on different aspects of their products and services, like the geographical location, the economic value, lifestyle, services and amenities, and environmental awareness. The geographical location of the company will include the cultural heritage of the host country in which the firm can use as a selling point to foreign visitors. The actual location of the hotel can also be used as a selling point for added convenience if the hotels are located just beside train or bus stations. The economic value refers to marketing the company’s products and services at a certain price which gives a similar level of satisfaction. Hotels can market themselves as budget hotels which are on the lower scale of the price range, or luxury hotels which gives consumers such a great experience and service that the consumers think the high price is worth it. Lifestyle and services can be marketed to consumers if the hotel provides visitors with a distinct, exotic experience or have unique facilities. Companies can also support environmentally friend codes of conduct to promote themselves as clean and green, giving off a positive reputation and image to the public and potential customers. Banyan Tree uses the product position strategy of geographic location, lifestyle and services and environmental awareness. According to Marketing in Asia 2nd Ed p714, each Banyan Tree property is designed to fit into it’s natural surroundings and the natural landscape is preserved as much as possible. This places emphasis on the location of the hotels and resorts, marketing itself to be exclusive and asian. For Angsana Hotels and Resorts, it is located in unique World heritage site locales which provide visitors with a coherent authentic experience of the local destination, serving as a large attraction. Secondly, Banyan tree also markets itself to pamper guests with a warm and friendly retreat experience that showcases Banyan Tree’s signature lend of romance, rejuvenation and exotic sensuality. This adds to lifestyle and experience. Thirdly, Banyan Tree sells itself with an environmentally friendly and conscious theme. Besides being environmentally friendly, Laguna Resorts and Hotels is also committed to providing for the health and educational needs of the children of its employees and local villages. This will attract consumers who care for the deterioration of nature and the welfare of developing countries. Banyan Tree’s products are highly distinctive as they emphasize themselves on being a luxury and premium brand. Banyan Tree previously marketed itself with the slog an of â€Å"Romance of Travel† which also emphasizes on rejuvenation and relaxation. Banyan Tree is consistent in all it’s different product types in the fact that it focuses on pampering the guest and providing the ultimate luxurious experience. To support the theme of luxury, Banyan Tree’s products are highly priced. This is because consumers usually associate higher priced products to be of better quality. Banyan Tree promoted themselves with the â€Å"Romance of Travel† campaign which emphasized on Banyan Tree’s brand of romance, intimacy and rejuvenation. Banyan Tree is also spread to other consumers through articles in many websites by travellers. Positive testimonies stir interest in potential customers, and can reach out to many due to the widespread use of internet today. To tap on the greater use of internet, Banyan Tree also offers direct bookings through popular resort websites for convenience and accessibility. To keep up with this inf ormal advertisement, Banyan Tree maintained it’s well-known quality of service which aided it to have good reviews. Banyan Tree also took part in eco and cultural tourism, and famous projects like the Tsunami Relief Project in 2004, projecting an image of awareness and goodwill for the company.