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Market

segmentation

and trends Spain is a country which

geographic location can

offer a great variety in

the touristic market.

Marcela Aldana Sotelo

Leticia Delgado Garzón

1ºGIAT-A

1

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.

2

Age:

Nationality

3

A2. Variable

process:

Leisure and holidays:

1

3 2 Choice of variables, for

example, we chose the

variable of “purpose of

trip”

Applying the method on the

market, applied this variable

on the market, we can see the

segments obtained were

Variable

identification:

First, it has

been identified

the criteria’s

that exist.

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Work and business:

Studies:

Personal

motives:

4 Check that the

segments obtained

meet the requirements:

the segments we had

obtained accomplish

the requirements.

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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.

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.

If we use all of these

variables, we will find

a great amount and

varied segments.

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C.1.Requirements for an effective segmentation:

The eight criteria’s for an effective segmentation are:

1. Measurable:

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.

2. Substantial

A target market must be big

enough to warrant as

separate investment.

3. Accessible

The essence of market

segmentation is being able

to select and read specific

customer groups.

4. Defensible

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.

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.

6. Competitive

Marketers need to take a long, hard

look at whether that they offer

provides something distinct or unique

for these customers.

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.

8. Compatible

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.

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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

Requirements have been

complied because, as we

can see, there are

products made for those

segments.

Single people

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

and beach

(Purpose of trip)

Place: Web Page

Promotion and Price

Product: Single people trips

(Lifestyle)

Place: Webpage

Promotion and Price

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Product: Imserso Trip

(Age) Place: Webpage,

Government of Spain, tour

operators

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

(Lifestyle)

Place: Webpage and

Schools.

Promotion and Price

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D.2. Necessity for an effective segmentation to design a good business

strategy

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.

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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E1. Value of the different market variables:

One of the main defining features of the

Spanish tourism model is its specialization

in the leisure segment. This represents

between 80 and 90 percent of the total.

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%.

Spain started the year with the arrival of

3.2 million tourists in January, 3.6% more

than in the same month of the previous

year.

The majority of international tourists visiting

Spain are aged between 25 and 44 years

(43.1%). At the same time, the weight of

tourists between 15 and 24 years is 10.5%,

while those over 64 accounted for 9%.

By sending markets, USA and Italy stood

out by presenting the highest percentage

of young tourists. Meanwhile, the group

“older than 64” had its highest

representation in France and the UK, with

a weight of around 12%.

The majority of non-resident tourists

made some activity during his stay in

Spain, among which shopping and

cultural activities conducted

respectively by 67.6% and 53.9%. Fun

activities such as discos, clubs, etc. are

elected by 20% of tourists, sports

activities, culinary activities, visits to

theme parks and family visits also take

prominent positions.

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E2. Different products of the Spanish tourism market offered to E.1:

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:

1 2

3 4

Penetration

It's time of maximum

innovation. You can

penetrate in the market

competing at low prices or

looking for a niche market.

Growth:

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.

Maturity:

Optimal market size is

reached and intense

competition begins.

Descent:

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.

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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 Turespaña, 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 Turespaña. 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:

TURESPAÑA is the national

tourism agency

responsible for the

marketing of Spain

in the World.

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. Choose the suppliers. 5. Required information. 6. Quote. 7. 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.

Promotion

Some instruments to make this promotion are: Publicity. Touristic fairs. Sales promotion. Public relations. Sponsorship. Direct marketing.

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Price

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.

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.

Place (Distribution)

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.

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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 Andalucía

is equipped with a large number of

natural, cultural and social resources by

the aforementioned tourist infrastructure

make it an attractive destination.

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.

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.

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.

These tools are important for

tourism and allowing Andalusian

sell different products offered by

this Andalusia.

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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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