1. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
Chapter 8Chapter 8
MarketMarket
Segmentation,Segmentation,
Targeting, andTargeting, and
PositioningPositioning

2. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
Key TermsKey Terms
• Behavioral segmentation
• Benefit segmentation
• Competitive advantage
• Competitors’ strategies
• Confused positioning
• Customized marketing
• Degree of product homogeneity
• Demographic segmentation
©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

3. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
Key Terms
• Existing competitor
• Gender segmentation
• Geographic segmentation
• Income segmentation
©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

4. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
Key Terms
• Market
• Market homogeneity
• Market positioning
• Market segmentation
• Market targeting
©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

5. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
Key Terms
• Micromarketing
• Overpositioning
• Psychographic segmentation
• Specific product attributes
• Underpositioning
©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

6. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
““The mythological, homogeneousThe mythological, homogeneous
America is gone. We are a mosaic ofAmerica is gone. We are a mosaic of
minorities.”minorities.”
-Joel Weiner
©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

7. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
Chapter Objectives
• Explain market segmentation and
identify several possible bases for
segmenting markets
• List and distinguish among the
requirements for effective segmentation
©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

8. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
Chapter Objectives
• Outline the process of evaluating
market segments
• Illustrate the concept of positioning for
competitive advantage
• Discuss choosing and implementing a
positioning strategy
©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

9. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
MarketsMarkets
• AA marketmarket is all actual andis all actual and
potential buyers of a product orpotential buyers of a product or
serviceservice
©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

10. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
Stages of MarketingStages of Marketing
• Mass marketingMass marketing
• Product-variety marketingProduct-variety marketing
• Target marketingTarget marketing
• MicromarketingMicromarketing
• Customized marketingCustomized marketing
©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

11. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
Market SegmentationMarket Segmentation
• Geographic SegmentationGeographic Segmentation
• Demographic SegmentationDemographic Segmentation
• Psychographic SegmentationPsychographic Segmentation
• Behavior SegmentationBehavior Segmentation
©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

12. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
Geographic SegmentationGeographic Segmentation
• Dividing the market into differentDividing the market into different
geographic unitsgeographic units
– NationsNations
– StatesStates
– RegionsRegions
– CountiesCounties
– CitiesCities
– NeighborhoodsNeighborhoods
©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

13. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
Demographic SegmentationDemographic Segmentation
• Dividing the market into groupsDividing the market into groups
based on demographic variablesbased on demographic variables
– AgeAge
– GenderGender
– IncomeIncome
– OccupationOccupation
©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

14. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
Psychographic SegmentationPsychographic Segmentation
• Dividing buyers into different
groups based on social class,
lifestyle, and personality
characteristics
©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

15. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
Behavior SegmentationBehavior Segmentation
• Buyers are divided into groups based on theirBuyers are divided into groups based on their
knowledgeknowledge,, attitudeattitude, and, and useuse oror responseresponse to ato a
productproduct
• The best starting point for building market segmentsThe best starting point for building market segments
• TypesTypes
– Special occasion segmentation
– Benefits sought
– User status
– Usage rate
– Loyalty status
– Buyer readiness stage
©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

16. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
Requirements for Effective SegmentationRequirements for Effective Segmentation
• Measurability
• Accessibility
• Substantiality
• Actionability
©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

17. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
• Size, purchasing power, profiles
of segments can be measured.
• Segments can be effectively
reached and served.
• Segments are large or profitable
enough to serve.
MeasurableMeasurable
AccessibleAccessible
SubstantialSubstantial
ActionableActionable
• Effective programs can be
designed to attract and serve
the segments.
Requirements for Effective SegmentationRequirements for Effective Segmentation
©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

18. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
Market TargetingMarket Targeting
• Evaluating Market SegmentsEvaluating Market Segments
• Selecting Market SegmentsSelecting Market Segments
• Choosing a Market-CoverageChoosing a Market-Coverage
StrategyStrategy
©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

19. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
Evaluating Market SegmentsEvaluating Market Segments
• Segment Size and GrowthSegment Size and Growth
• Segment Structural AttractivenessSegment Structural Attractiveness
• Company Objectives andCompany Objectives and
ResourcesResources
©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

20. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
Selecting Market SegmentsSelecting Market Segments
• Undifferentiated MarketingUndifferentiated Marketing
• Bifurcated MarketingBifurcated Marketing (dual)(dual)
• Differentiated MarketingDifferentiated Marketing
• Concentrated MarketingConcentrated Marketing
©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

21. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
Choosing a Market – Coverage StrategyChoosing a Market – Coverage Strategy
• Company resourcesCompany resources
• Degree of product homogeneityDegree of product homogeneity
• Market homogeneityMarket homogeneity
• Competitors’ strategiesCompetitors’ strategies
©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

22. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
Positioning StrategiesPositioning Strategies
• Products can be positioned on specificProducts can be positioned on specific
attributes or against another productattributes or against another product
classclass
©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

23. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
Choosing and Implementing a PositioningChoosing and Implementing a Positioning
StrategyStrategy
1.1. Identifying a set of possibleIdentifying a set of possible competitivecompetitive
advantagesadvantages upon which to build aupon which to build a
positionposition
2.2. Selecting the right competitiveSelecting the right competitive
advantagesadvantages
3.3. Effectively communicating andEffectively communicating and
delivering the chosen position to adelivering the chosen position to a
carefully selected target marketcarefully selected target market
©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

24. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
Product DifferentiationProduct Differentiation
• Physical Attribute Differentiation
• Service Differentiation
• Personnel Differentiation
• Location Differentiation
• Image Differentiation
©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

25. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
Selecting the Right Competitive AdvantagesSelecting the Right Competitive Advantages
• Avoid:
–Underpositioning - failing ever to
position the company at all
–Overpositioning - giving buyers too
narrow a picture of the company
–Confused positioning - leaving
buyers with a confused image of a
company
©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

26. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
Selecting the Right Competitive Advantages
• Brand differences should meet the
following criteria prior to marketing:
– Important
– Distinctive
– Superior
– Communicable
– Preemptive (priority)
– Affordable
– Profitable
©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

27. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
Positioning MeasurementPositioning Measurement
• Perceptual mapping is a research tool
used to measure a brand’s position
©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

28. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
Positioning map of service level versus pricePositioning map of service level versus price..
Perceptual MapPerceptual Map
©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

29. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
Best PracticesBest Practices
• Carnival Cruise lines
• Southwest Airlines
©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

30. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
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