Market segmentation in Australia
According to TrackMaven | Marketing Analytics Software (2018), market segmentation is a marketing strategy that entails dividing a market into smaller portions according to specific characteristics. This tactic helps marketers, in particular, to come up with customized campaigns for each group to gain a competitive advantage in the marketplace.
Marketing segments are created following the criteria below:
Here, members of a particular segment are similar to each other and anyone can distinctively identify them from other groups. This could be group travelers or solo travelers.
- Strengths of a destination.
Different destinations suit different tourist. This means that every type of destination will attract a particular type of tourists. For instance, destinations with children friendly facilities are likely to form a segment for family tourist destinations.
A segment may not necessarily target a big population for it to be viable. Some segments aim at a smaller niche provided the market for particular destinations is large and lucrative.
This is the ability to communicate effectively with the destination managers and target segments. For instance, newlyweds are likely to read weddings and marriage bulletins and magazines. Tourism bodies and agencies should then advertise for suitable destinations in such platforms. For every segment, there should be a channel to easily reach them.
Bases of market segmentation
They include the following:
- Psychographic segmentation.
Here, tourists can be classified into segments according to their lifestyles, personalities, and attitude towards life. Psychographic segmentation mainly focuses on people’s purchase behavior towards certain products. As discussed in Your Article Library (2018), people purchase new products in the following categories:
- Innovators. This group of the population is always open to trying new products. They are venturesome and an easy target for new travel packages that suit them.
- Early adopters. These are influential people with whom the average buyer/ clients check whether a new product is legitimate. They include the media, licensing bodies and experts. For instance, celebrities are highly used to advertise new travel destinations. They are seen as opinion shapers who influence the perception of their followers.
- Early majority. This group likes checks legitimacy of products before buying. They are keen to read reviews of hyped new destinations.
- Late majority. They wait until a product has earned public trust.
- Laggards. They are traditional buyers. They hold on to old things and they rarely adopt new products.
- Behavioristic segmentation.
People are classified according to their attitude, use, and knowledge of specific products. This is influenced by variables like user status (regular, non-users and occasional users). The second variable is the purchase occasion e.g. a destination may advertise itself as the perfect holiday or hiking destination. Lastly, people purchase depending on the benefits they expect to get. Eg. A destination that offers spa treatments and more complimentary in their packages is likely to win more customers (LLP, 2018).
- Demographic segmentation.
This is classifying people according to age, gender, income, education, and occupation. It is important in identifying the right tourism destinations for each group.
This study focuses on making Australia a destination for young tourists. This is done by providing fun-filled activities such as snorkeling, water rafting and surfing in the major destinations.
- Benefit segmentation.
Tourists choose places, accommodation facilities or agencies based on the benefits offered. This is very important in knowing what different types of tourists prefer. Eg. Some tourists may prefer complimentary city tours when visiting new countries. This basis is important because it focuses on identifying the unique customer needs. It focuses on customer satisfaction and it's easy to use for tourism agencies or facilities penetrating the market. According to Tkaczynski, Rundle-Tiele, and Beaumont (2009, 169-175), benefit segmentation mostly focuses on the services offered by a marketer.
How Australia has positioned itself for market segmentation
As analyzed by Tourism.australia.com (2018), the youth (people between 19-29 years) contributes to 25% of the total visits in Australia and 42% of all visitor spending. This is as a result of the campaign dubbed ‘there’s nothing like Australia’. It has been considered to be appealing to the youth and it portrays the country as a place where young people can juggle easily with work, studying, visiting friends and relatives as well touring the country. The youth has then become a very viable market segment for tourism in the country.
This positioning has made the customers more specific and distinctive. With the current public perception among the youths, most youths are now attracted to study, work and tour Australia. This makes Australia a favorite destination for young people. With this in mind, it is now defined as the heartthrob of activities to fascinate the youth. The beauty of Australia, activities, and facilities are also getting tailored to suit the needs of the youth. The market segment (youth) is now distinct and defined and has a large population. Though the figures may change over time, this is evidence that market segmentation actually works
Destinationnsw.com.au, (2018) Market Segments | Destination NSW. [online] Available at: [Accessed 16 Mar. 2018].
LLP, B., (2018) Meeting the needs of younger travelers - Targeting a market segment - Australia | Australia case studies and information | Business Case Studies. [online] Businesscasestudies.co.uk. Available at: [Accessed 16 Mar. 2018].
Tkaczynski, A., Rundle-Tiele, S., & Beaumont, N. (2009) Segmentation: A tourism stakeholder view. Tourism Management, 2nd edn. Pearson publishers.
Tourism.australia.com, (2018) Youth - Corporate - Tourism Australia. [online] Available at: [Accessed 16 Mar. 2018].
Track Maven | Marketing Analytics Software, (2018) Market Segmentation — Definition — Track Maven. [online] Available at: [Accessed 16 Mar. 2018].
Your Article Library, (2018) Market Segmentation: 7 Bases for Market Segmentation | Marketing Management. [online] Available at: [Accessed 16 Mar. 2018].