Market segmentation and trends Spain is a country which geographic location can offer a great variety in the touristic market.
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Market Segmentation and trends A1. Spanish tourism market segmentation:
Purpose of trip
Lifestyle
The motivations create needs that only cease to be until they are satisfied.
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Age:
Nationality
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A2. Variable process:
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Variable identification: First, it has been identified the criteria’s that exist.
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Choice of variables, for example, we chose the
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Applying the method on the market, applied this variable
variable of “purpose of
on the market, we can see the
trip”
segments obtained were
Leisure and holidays:
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Work and business:
Studies:
4 Personal motives:
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Check that the segments obtained meet the requirements: the segments we had obtained accomplish the requirements.
B.1. Importance of the use of these four variables:
Purpose of trip Use of this segmentation base is widespread. Lodging, restaurant, travel agency, cruise line, airline, and destination marketing organizations traditionally apply it as at least part of their segmentation approach. The most important consideration in selecting a primary segmentation base should be that it represents the factor with the greatest influence on the customer's behavior.
If we use all of these variables, we will find a great amount and varied segments.
Lifestyle Is a way of living characterized by the manner in which people spend their time (activities like cultural activities, leisure activities, sport activities, gastronomic activities...), what things they consider important (interests), and how they feel about themselves and the world around them (opinions) [their AIOs]
Age This variable form part of Demographic segmentation, consisting in dividing markets based on population statistics. This statistics are readily available, uniformly defined and accepted, and easy to use.
Nationality It forms part of geographic segmentation. This is the most widely used segmentation base in the hospitality and travel industry because is easy to use, and usually there are numerous demographic, travel, and other statistics available for these markets; it can be easily measured; and the most media vehicles serve specific geographic areas.
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C.1.Requirements for an effective segmentation: The eight criteria’s for an effective segmentation are:
1. Measurable:
5. Durable some market segments are short term or medium term, meaning that they exist for less than five years. The prudent marketer should be convinced that each target market has long-term potential.
It is inadvisable to pick target markets that can´t be measured without a reasonable degree of accuracy. If the marketer can only guess the size of a target market, then there is no way of knowing what level of investment is justified.
6. Competitive Marketers need to take a long, hard look at whether that they offer provides something distinct or unique for these customers.
2. Substantial A target market must be big enough to warrant as separate investment.
7. Homogeneous In dividing the whole market into its component market segments, the organization should make sure that the segments are as different from each other, or as heterogeneous, as possible.
3. Accessible The essence of market segmentation is being able to select and read specific customer groups.
8. Compatible
4. Defensible
When an organization selects a target market it must be sure that this market does not conflict in anyway with the market it already serves. Marketers would say that this mean ensuring that a new target market is compatible with the existing customer mix.
There are situations in which a similar approach can be used with two or more individual target markets. The marketer must be sure that each group requires individual attention.
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C.2. Some segments in function of the four variables are: People interested in Cultural Activities People interested in sun and beach
People interested in gastronomy
People interested in health
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Portuguese tourist trip
English tourist trip
French tourist trip
Single people
Requirements have been complied because, as we can see, there are products made for those segments.
Married people
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D.1. Business strategy design: It is important to do an effective segmentation because you have to make products for those segments.
Product: People interested in sun Place: Web Page and beach
(Purpose of trip)
Promotion and Price
Promotion and Price
Product: Single people trips (Lifestyle)
Place: Webpage
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Product: Imserso Trip
Place:
Webpage,
Government of Spain, tour operators
(Age)
Tour operator specializing in providing travel services to seniors. Main activity management Holiday Program for Older IMSERSO, among others.
Promotion and Price
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Product: German tourist trip (Nationality)
Place:
Webpage
and tour operators.
Promotion and Price
Product: Studies abroad Promotion and Price
(Lifestyle)
Place: Schools.
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Webpage and
D.2. Necessity for an effective segmentation to design a good business
strategy
The main characteristics of the Spanish touristic market are:
Tourism represents around 10% of GDP and employs 10% of the population. Strong seasonality. The main sources of tourism to our country are Great Britain (25.5%), Germany and France (one 57'75% between the three). Their main destinations are focused on Madrid, the Mediterranean coast and the islands. One of the main defining features of the Spanish tourism model is its specialization in the holiday segment. This represents between 80 and 90% of the total. The main segment of tourism in Spain is the sun and beach segment. This segment begins to show signs of exhaustion
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Other segments that present very encouraging data are:
Business tourism Cultural tourism Sport tourism Green tourism Health tourism
According to these characteristics, we must make a segmentation to create effective segments and then products.
E1. Value of the different market variables:
One of the main defining features of the
Spain started the year with the arrival of
Spanish tourism model is its specialization
3.2 million tourists in January, 3.6% more
in the leisure segment. This represents
than in the same month of the previous
between 80 and 90 percent of the total.
year.
5 main tourist potencies of sun and beach tourism: Catalonia: register a number of visitors 19,696 a 4.6 % Valencia: with 10,393 international travelers, 7.2% Andalusia: with 8,344 tourists, up 6% Baleares with 7,072, up 9.7% The Canary Islands with 6,436, up 18%.
The majority of international tourists visiting Spain are aged between 25 and 44 years
The majority of non-resident tourists
(43.1%). At the same time, the weight of
made some activity during his stay in
tourists between 15 and 24 years is 10.5%,
Spain, among which shopping and
while those over 64 accounted for 9%.
cultural activities conducted respectively by 67.6% and 53.9%. Fun
By sending markets, USA and Italy stood
activities such as discos, clubs, etc. are
out by presenting the highest percentage
elected by 20% of tourists, sports
of young tourists. Meanwhile, the group
activities, culinary activities, visits to
“older than 64” had its highest
theme parks and family visits also take
representation in France and the UK, with
prominent positions.
a weight of around 12%.
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E2. Different products of the Spanish tourism market offered to E.1:
I
talian tourists: Italy ranks as the fifth generator output market in February with 141 million euros, and an expansion of 43.8%, motivated by the growing influx of Italians (20.5%) and increased the average expenditure per person. Catalonia was the most benefited.
Young
people trips: More and more companies and destinations are geared towards young tourists to diversify its customer mix. And this segment, which represents 20% of international tours, shows a remarkable resistance to crises and disasters. According to the WTO, the young tourist spends on average between 1,000 and 6,000 dollars per trip, with longer stays (up to 50 days) while the average tourist spending is 1,450 dollars.
People interested in gastronomy: According to the report 'Food Tourism 2014',
Spain leads the ranking at European level where the cuisine is "a key factor" when choosing a destination. This report reflects the views of 389 tourism professionals in five
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countries. Of these, 66% believe that the culinary experiences of travelers are a key to the tourists visiting these countries when choosing the target element. 82% of the professionals surveyed in this study assessed Spain as an attractive destination for its gastronomy, ahead of the UK (73%), Italy (61%), France (60%) and Germany (55%). Within each market has identified the region’s best known for its gastronomy, in the case of Spain, Basque Country stands as the best dining destination. Regarding the tourist profile interested in gastronomy, visitors are mostly between 36 and 55 years (38%). Within the expenditure made, 45% of respondents encrypts between 100 and 250 euros a day.
French tourists: France, after the
UK and Germany, is the third most important source market for Spain. In 2013, a total of 9.52 million French tourists traveled to Spanish destinations, which represented an increase of 6.9%. The market share in tourism destination Spain issuer of France was in 2012 17.2% of all trips and 17.8% of overnight stays, occupying Spain as the first place as a tourist destination of the French. The increase of tourist arrivals from France together with a higher average spending per trip this February, dragged to a rise of total expenditure of 14.2%. In addition the average stay also was prolonged to 6.3 nights.
People interested in sun &
beach: 62% of reservations to coastal destinations that are made in Europe have focused on Spanish cities. The communities identified with the sun and beach tourism account for 84.3% of foreign tourism: Andalusia, Balearic Islands, Catalonia and Comunitat Valenciana. Sun & beach tourism exceeds 10,000 million in revenue in Andalusia.
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F1. Strategies: The strategies to sell a products are:
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P
enetration
2
G
4
D
It's time of maximum innovation. You can penetrate in the market competing at low prices or looking for a niche market.
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M
aturity:
rowth:
To reach this stage it is important to have a clear competitive advantage, have a good portfolio of satisfied clients, a manageable debt and controlled costs. Deals, discounts, loyalty cards, etc. are used.
escent:
They usually reach this stage due to lack of market adaptation and insufficient innovation. If remedial action is not taken, this phase ends in settlement and death of the service/product.
Optimal market size is reached and intense competition begins.
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F2. How these strategies are applied?
Russian tourists interested in the Canary Islands: This segment is in growth stage. 12,111,282 tourist arrivals to the Canary Islands in 2013, 192,784 were from Russia, according to the ISTAC, and most stayed in Tenerife (a 95%) which have already been placed as the fourth most important market. Known for its high purchasing power, spend almost 1,900 euros per person.
British tourists: This segment is in growth stage. UK increased its total expenditure by 6.2% in February, largely due to the increase in their average costs, daily and per person, 5.4% and 10.1% respectively, as the only British arrivals were up 0.7%. This result favored mainly Canarias.
People interested in urban tourism: This segment is in growth stage. According to data from Turespa単a, growing consumption of all tourism products, although a notable increase of urban tourism; the fee goes from 6.3% in 2013 to 6.7% in 2014.
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People interested in adventure: This segment is in growth stage. Active tourism, specifically adventure tourism has grown significantly in recent years in Spain. Attracting more than 7 million people, diversifies its offer. Adventure tourism has shown a
strong resistance to the vagaries of the economy and it looks to continue having a wide significance that lets continue this trend. The largest consumer of these services are those between 25 and 35 years.
People interested in gastronomy: This segment is in growth stage. Gastronomy in Spain only in 2013 attracted 7.4 million international tourists, up to 32%, with an average expenditure per person of 1,170 euros, according to Turespa単a. The cuisine listed as outstanding value between meeting international tourists visiting the country, and especially some destinations, according to the latest survey Habitur. Spanish cuisine is currently the second favorite food of Europeans, ranking only behind the Italian, according to the annual survey conducted by Travel & Gastronomy Travel web TripAdvisor.
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G1/H1. Commercial instruments used in the Spanish tourism market: Product: A product is seen as an item that satisfies what a consumer demands. It is a tangible good or an intangible service. Every product is subject to a life-cycle including a growth phase followed by a maturity phase and finally an eventual period of decline as sales fall. Marketers must do careful research on how long the life cycle of the product is. A package
is the combination of the following services: Transportation Accommodation Other touristic services Before developing a tourism package... 1. Research the market: 2. Discuss if it is appropriate to make a promotion. 3. Focus on a specific customer. 4. 5. 6. 7.
Promotion Some instruments to make this promotion are: Publicity. Touristic fairs. Sales promotion. Public relations. Sponsorship. Direct marketing.
Choose the suppliers. Required information.
Quote. Don't leave loose ends (guide, choffer, tickets...) 8. Give all possible information about the product. Some factors to create a package tour are: Class of clients and their interests. Time and budget available. Number and class of generating demand attractions and complementary facilities and services in the area. Class and nature of products on the market (competition). Events & Activities. Included if they represent the main subject and are demand generators.
TURESPAÑA is the national tourism agency responsible for the marketing of Spain in the World.
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Price
Place (Distribution)
The amount a customer pays for the product. The price is very important as it determines the company's profit and hence, survival. Adjusting the price has a profound impact on the marketing strategy, and depending on the price elasticity of the product, often it will affect the demand and sales as well.
Refers to providing the product at a place which is convenient for consumers to access. Various strategies such as intensive distribution, selective distribution, exclusive distribution and franchising can be used by the marketer to complement the other aspects of the marketing mix.
For marketing managers of an organization, the price is very important for these reasons:
Price is a short-term instrument.
It is a tool with which you can act, within limits, quickly and flexibly.
It is a powerful competitive tool.
It is the only instrument that provides income.
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G2. Positioning of the main Andalusian tourism products: Andalusian tourism industry offers a diverse range of services among which are transport, accommodation, catering and many others that are designed to meet tourist demand. In turn AndalucĂa is equipped with a large number of natural, cultural and social resources by the aforementioned tourist infrastructure make it an attractive destination.
Those that support the overall ride quality are the social environment (kindness, customs, etc.), the cuisine, transport infrastructure, the reservation, accommodation and the process of consultation and information.
Major foreign tourist issuers for Andalusia: UK, Germany, France, Scandinavia, the Netherlands, Belgium and Italy. The quality of services and resources measured in terms of compliance coupled with the image of the destination and price expectations leads tourists to make a commitment or loyalty to that place when thinking about your next vacation.
These tools are important for tourism and allowing Andalusian sell different products offered by this Andalusia.
93.9% of tourists who visited Andalusia during 2013 were considered satisfied with the trip. The most satisfied were the Spanish tourists and that 97% of them the expectations that had been made about the trip, for foreigners only 77% were satisfied with the Andalusian destiny fulfilled.
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H2. Spanish tourism market analysis: The tourism model that has been consolidated in Spain's main characters international origin of visitors, their status as mass tourism and realize their demands in enjoying the sun and the beach. In the first half of 2014, Spain received a total of 28 million international tourists, 23.3% were from the United Kingdom, ranking again as the largest foreign issuer. Moreover, this market has performed well in this period, registering a growth rate of + 5.8% Sending countries are mainly from the European Union (include Britain, France and Germany) and follow them Nordic countries and Portugal. The destinations within the country are mainly the coastal communities: Andalusia, Catalonia and Valencia. There are a large family component; the most widely used is the private car; there are various forms such as beaches, culture, rural, nature, snow, mountain, etc.
Seasonality The largest influx of tourists during the summer, months July to September, is a trait that characterizes Spain as tourist destination. Of the 60.7 million tourists visited Spain in 2013, more than half came from three source markets: UK, Germany and France. The UK was the most substantial, with 14.3 million tourists, although Germany which has a higher average stay 9.7 days. Both the US and the rest of Latin characterized by high average stay mainly due to the remoteness of these countries.
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