1. Market Segmentation
DESINGED BY
Sunil Kumar
Research Scholar/ Food Production Faculty
Institute of Hotel and Tourism Management,
MAHARSHI DAYANAND UNIVERSITY, ROHTAK
Haryana- 124001 INDIA Ph. No. 09996000499
email: skihm86@yahoo.com , balhara86@gmail.com
linkedin:- in.linkedin.com/in/ihmsunilkumar
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webpage: chefsunilkumar.tripod.com

2. A market segment is a sub-set of a market made
up of people or organizations with one or
more characteristics that cause them to
demand similar product and/or services based
on qualities of those products such as price or
function.
Examples:
• Gender
• Price
• Interests

3. It starts with NEED!
Wants, desires, aspirational, social
esteem, security, functional, peer, trendy, ‘mu
st-have’, financial, time
saving, educational, personal growth, etc.

4. Four Primary Bases to segment
• Geographic Segmentation
• Demographic Segmentation
• Behavioral Segmentation
• Psychographic Segmentation

5. A true market segment meets all of
the following criteria:
• it is distinct from other segments (different
segments have different needs),
• it is homogeneous within the segment
(exhibits common needs);
• it responds similarly to a market stimulus, and
• It can be reached by a market intervention.

6. Individual Consumers look at..
• Physical Size
• Creation of or response to
a fad
• Geographic location
• Time related factors
• Demographics/culture/rel
igion
• Gender
• Age
• Social status
• Education
• Avocation
• Special Interests
• Accessibility
• Access
• Need for specific
information
• Need for customization
• Need for quality
• Degree of a
product/service
ingredient

7. Purchase decision influencers
• Preference for channel of
distribution
• Number of decision
makers
• Financial strength of the
prospect
• Quantity/volume
requirements
• Ability to use the offering
• Affiliation with other
organizations
• Commitment required
• Brand awareness/users
• Attitude toward a
personality or enterprise
• Attitude toward price
versus value
• Experience with other
products/services
• Prospect bias
• After sale support
expectations

8. Benefits of Segmentation
• Effective use of resources
• Gain a focus
• Create Value for a target market
• Positioning

9. Steps in Market Segmentation,
Targeting, and Positioning
Market Segmentation
1. Identify bases for
segmenting the market
2. Develop segment profiles
Market Targeting
3. Develop measure of
segment attractiveness
4. Select target segments
Market Positioning
5. Develop positioning for
target segments
6. Develop a marketing
mix for each segment

10. Levels of Market Segmentation
Through Market Segmentation, Companies Divide Large, Heterogeneous
Markets into Smaller Segments that Can be Reached More Efficiently And
Effectively With Products and Services That Match Their Unique Needs.
Mass Marketing
Same product to all consumers
(no segmentation, i. e. a commodity)
Segment Marketing
Different products to one or more segments
(some segmentation, i.e. Marriott)

11. • Size, purchasing power, profiles
of segments can be measured.
• Segments can be effectively
reached and served.
• Segments are large or
profitable enough to serve.
Measurable
Accessible
Substantial
Actionable
• Effective programs can be
designed to attract and serve
the segments.
Requirements for effective segmentation

12. Choosing a market-coverage
strategy
• Company resources
• Degree of product homogeneity
• Market homogeneity
• Competitors’ strategies

13. • Product’s Position - the way the product is
defined by consumers on important attributes -
the place the product occupies in consumers’
minds relative to competing products.
Marketers must:
–Plan positions to give their products the
greatest advantage in selected target
markets
Positioning for Competitive Advantage

14. Positioning Strategies
• Positioning by specific product attributes
• Positioning by benefits
• Positioning for user category
• Positioning for usage occasion
• Positioning against another competitors
• Positioning against another product class

15. • Step 1. Identifying Possible Competitive
Advantages: Competitive Differentiation.
• Step 2. Selecting the Right Competitive
Advantage: Unique Selling Proposition
(USP).
• Step 3. Communicating and Delivering
the Chosen Position.
Steps to Choosing and Implementing
a Positioning Strategy

16. Product Differentiation
• Physical attributes
• Service differentiation
• Personnel differentiation
• Location
• Image differentiation

17. Positioning map of service level versus price. Source: Lovelock, Services Marketing, Prentice Hall
Perceptual Map

18. Exercise
• Make four teams. One traveling for business, another
travelling to attend the wedding of a friend, the third
travelling for a vacation and the fourth to start a new factory.
• Group A is expected to stay for only a night.
• Group B for 3 nights. First day sangeet, then marriage and
third day reception.
• Group C is expected to stay for 5 nights. The vacation is at a
beach or in the hills, the group can decide!
• Group D is expected to stay for a month. The group will start
the factory and then come back.
• Each group is now invited to make a list of services / products
that the group might need from the hotel it stays in.

19. Hotels based on Market Segmentation
• Commercial hotels
• Leisure Hotels
• Airport hotels
• All-suite hotels
• Extended stay
• Residential
• B&B /Motels
• Casino Hotels
• Convention Hotels / Centers

20. IHG Segments
Market segment The Group’s brands Description Customer segment
Luxury — Hotels with the
highest level of
amenities, often
boutiques or small
chains with top-class
facilities and services
and very high room
rates.
A mix of business
and leisure,
dependent on
location, often with
a high proportion of
international guests.
Upper Upscale InterContinental Well-appointed
hotels with full, high-
quality, amenities
including spacious
rooms and
bathrooms. High
room rates. Usually
located in prime city-
centre locations in
major cities or in
resorts.
Predominantly
business often with
a high proportion of
international guests.

21. IHG Segments
Market segment The Group’s brands Description Customer segment
Upscale Crowne Plaza
Staybridge Suites
Hotel Indigo
High-quality, mostly
full-service hotels with
moderate to high room
rates. Less luxurious
than upper upscale
and sometimes lacking
some of the facilities
such as a concierge.
Predominantly
business in urban
locations but also
appealing to the
leisure guest; less
international than
upper upscale but
can still have a
significant
international guest
base.
Midscale (full service) Holiday Inn
Holiday Inn Select
Holiday Inn SunSpree
Full service but with
fewer amenities than
upscale. Comparatively
lower room rates than
upscale
Predominantly
domestic guests,
both business and
leisure.

22. IHG Segments
Market segment The Group’s brands Description Customer segment
Midscale (limited
service)
Express by Holiday Inn
(in EMEA and Asia
Pacific)
Holiday Inn Express
(in the Americas)
Candlewood Suites
Reduced food and
beverage, bar and
meeting facilities but
similar quality room
product to full service
midscale. Broadly
comparable room
rates with midscale
(full service).
Predominantly
domestic guests, both
business and leisure.
Economy/ Budget __ Cheapest most basic
hotels with limited
facilities
Predominantly
domestic guests.

23. Market Segments used in Hotels
• Corporate
– A/B/C
• Leisure
• Conferences / Events
• Travel Agent
• Airlines/Cruise/Crew
• Long Stayers
• Complimentary

24. Basics of Marketing
• Ps
– Product
– Price
– Place
– Promotion
• Extended Ps
– People
– Process
– Physical Evidence

26. Questions