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Contents Introduction Rationale Objectives Overview Marketing What is marketing? Segmentation Why segment a market Examples of segmentation Segmentation relating to Amsterdam Buyer behaviour The buyer decision process How destinations can effect buyer behaviour Buyer behaviour relating to Amsterdam How the Amsterdam tourist board can improve it’s future marketing. Rationale This report has been conducted to look into market segmentation. It will discuss the importance market segmentation has when it comes to marketing and also the different factors that affect buyer behaviour.
It will also talk about how market segmentation and buyer behaviour effects tourism in Amsterdam. The report will also discuss how knowing what effects buyer behaviour and how best to segment the market will aid the tourist board. Objectives The aim of this research is to aid the tourist board in Amsterdam. It should help them in deciding how best to market the destination in the future. The aim is to help the tourist board improve the effectiveness of it’s marketing in order to attract more tourists and to increase the amount of money being spent on tourist attractions.
It will also help to aid the tourist board in deciding how best to segment the market and what visitors it should market itself to. Overview The report will start by defining marketing and outlining it’s importance in attracting visitors to a destination. It will then go on to talk about market segmentation. It will describe what market segmentation is and why it is important in marketing. Then it will go on to look at how market segmentation is used by the Amsterdam tourist board, and how it could go on to improve the way in which it chooses to segment it’s market.
After that the report goes on to look into buyer behaviour. The report will talk about the buyer decision process and how people come to decide on a destination . Finally it will conclude by assessing how the Amsterdam tourist board could go on to use this report in improving its marketing techniques. Marketing What is marketing and why is it important? Marketing is a very effective tool when trying to promote a destination. “marketing is about customers. It is about how to find them, how to satisfy them and how to keep them. ” (Morgan, 1996) Without customers a tourist destination couldn’t exist.
Tourists bring money to a destination and use the different facilities there in order to keep the businesses running. This even applies to voluntary and non profitable organisations. “If no one comes to its performances or uses its facilities, then how can it justify spending the money. ” (Morgan, 1996) This is why marketing is increasingly become vital in attracting new visitors to an area. Travel is becoming easier all the time. Air travel is becoming quick and inexpensive and as a result more tourist destinations are opening up to people. This means that destinations are experiencing increased competition. Kotler et al, 1993) discusses how places are “increasingly competing with other places to attract their share of tourists, businesses and investment. ” With the competition increasing all used well it can help to transform the popularity of a destination. One major factor that needs to be considered when designing a destinations marketing in which segment area to aim it’s marketing towards. Segmentation Why segment a market? Segmentation is vital in marketing, with the amount of people travelling and using visitor attractions around the world it would be impossible to advertise affectively without narrowing the market.
Segmentation is the process in which a destination chooses a target market which it will aim to sell a particular product. Without market segmentation destinations would be trying to please too many different types of tourist. “The total market for tourism products is huge. ” (Briggs, 1997) It would simply be impossible to try and reach everyone. “Not every tourist is interested in a particular destination. A place would waste its money trying to attract everyone who wants to travel. (Kotler, 1993) Instead destinations segment the market and try to reach the target market that would be most beneficial to them. the core advantage of segmentation is that customers will be more satisfied with the product because it has been designed with their needs in mind. ” (Morgan, 1996. ) Morgan (1996) also talks about social benefits to market segmentation. She says that people “will be mixing with people like themselves and avoiding other incompatible types. ” If an organisation knows exactly which target market it is hoping to reach it can also use its marketing to its full effect. It can advertise in media most likely to be seen by the target market and save time and money on mass-marketing which could prove ineffective.
Examples of segmentation There are many different ways that a market can be segmented. Each different method has it’s advantages and disadvantages. One way to segment a market is Geographic segmentation. For most destinations “finding out where their customers come from is probably the most important piece of research they can do. ” (Morgan, 1996) If a destination can accurately identify where there target market are travelling from then they can ensure that advertising is focused in that area and so is used effectively. They could perhaps target local newspapers or regional TV advertising.
The destination needs to think about “Which countries contain a large number of citizens who have the means and motivation” to enjoy the destination. (Kotler et al, 1993) Another way to segment a market is Demographic segmentation. This means “the external measurable characteristics of a people, such as their age, gender, occupation. ” (Morgan, 1996) If a destination can get a good idea about the people that are visiting or who they want to visit then it can help aid the development of marketing campaigns. For example they could direct advertising into magazines that are read by their target market.
Many destinations also try to get an idea of the target markets social class. “Social class is widely used by marketers as a way of identifying the spending potential of tourists. ” (Page, 2009) There are many other ways that markets can be segmented, How each destination decides to target it’s market depends entirely on the tourists it is hoping to attract as well as the facilities it can offer. Each destination may choose to separate it’s target markets differently or may aim at different target markets in different campaigns. Segmentation relating to Amsterdam
In relation to Amsterdam the most effective way to start segmenting the market may be to first decide on the areas that their target markets come from. Amsterdam has a wide variety of different attractions to offer and they may find that they have a variety of different target markets. Another approach may be to try and discourage groups that are undesired from visiting. Kotler et al (1993) mentions that some of Amsterdam’s tourists may be undesirable “Amsterdam’s reputation as a very tolerant city attracts a larger number of “flower children” and drug users, with the consequence of an increasing crime rate. As soon as they can decide on the places that their target market are travelling from they can think about targeting different lifestyle groups. They can focus of local papers that their market are likely to read or sell the destination in a way that is likely to appeal to the target market. They must make sure however that the target market is “large enough to make targeting them worthwhile. ” (Briggs, 1997) there is no point in segmenting the market so far that you are only appealing to a very small number of tourists. Buyer behaviour The buyer decision process
Every time a person makes a purchase they under take what has become know as the buyer decision process. This process varies considerably from person to person and depending on the purchase they are making. When it comes to a tourist making a decision they will try to find the destination or attraction that will be most beneficial to them. They will assess a variety of different factors including price and enjoyment. Kotler et al (1993) says that the buying process begins when a person “recognises a problem, need, or opportunity and takes some action. They may start the process by gathering information on the destination or discussing it with others. Before a purchase is made though there are many factors that can influence. For example people can be influenced by family and friends. People tend to trust to opinion of those close to them and may visit a destination based on a recommendation. From this they will narrow down their choices to ones that they think they would like to visit. At this evaluation stage they can still be influenced by “attitudes of others” or “situational factors. (Kotler et al, 1993) In both of these cases the buyer may change their decision, if something unforeseen happens in their life that can have an effect on where they would like to travel or indeed if they would like to travel at all. There are however many factors that can have influence on a buyers decision, and each person will be influenced differently. How destinations can effect buyer behaviour In the case of marketing a destination you need to keep in mind the buyer decision process. The destination needs to appear to be the best option to its target market and try to ensure that a purchase is made.
Morgan (1996) explains that the tourist “is really buying an experience” not always a physical product. In this case you need to market the experience correctly As you “cannot handle or test it before purchase” (Morgan, 1996) you need to ensure that in marketing you create a distinctive and desirable image of the destination. People will often look for the opinions of others before they decided to visit so you need to try and ensure that customers are satisfied and so will only pass on positive comment on the destination.
Kotler et al (1993) explains that in marketing a destination you need to decided who is involved in the decision making process, what influences the buyers decisions, and what the typical pattern the decision process takes. If the marketer can answer these point then they can get a good idea of how to market effectively and how to reach the desired market. Buyer behaviour relating to Amsterdam In order for Amsterdam to get the most out of it’s advertising it needs to be able to understand what impacts buyer behaviour in their target market. There are a variety of ways they could do this.
One is to do a survey of their customers and see what it is that made them choose the destination. Another way is to assess the marketing that is already in place. What type of marketing is proving the most effective to the market segment and why is this proving effective. A great way to try and make sure that their will be a positive impact on the buyers behaviour is to ensure that customers do not leave unhappy. If a customer is unhappy with the experience they are likely to go away and tell others. If somewhere in the destination receives a omplaint they must ensure that it is dealt with. If a problem can be resolved then bad publicity could be avoided. According to Page (2009) In the Netherlands “British tourists are the most important source market. ” This means that in Amsterdam they know that they need to direct at a good proportion of it’s market to Britain. It also needs to understand the needs and wants of a British tourist and try to cater for them. They need to ensure that Amsterdam is a well known and well respected destination with their target market so that the destination is one that is likely to be considered.
How the tourist board can improve it’s future marketing. In future marketing Amsterdam needs to consider the market that it wants to attract. As tourism is often unpredictable and is always changing the Amsterdam tourist board needs to make sure that it keeps assessing its marketing and stays up to date. “In many of the Western industrialized countries, tourism markets are becoming characterised by an ageing population. ” (Page, 2009) Perhaps Amsterdam could use this information to start to target some of the older travellers.
This report has outlined the importance of being able to segment a market in order to make advertising more effective. The Amsterdam tourist board should use this information to get an idea of their target market and design advertising campaigns based around that. They should look at what is effecting buyer behaviour in their market group and try to combat any problems this causes. In order for Amsterdam to stay ahead of the competition it needs to constantly re asses their marketing strategy and to personalise their approach to different markets they hope to attract.
They also need to try and create an attractive image of the destination so that it can appeal to a large market and increase the amount of tourists who are visiting. Segmentation and buyer behaviour are important considerations when designing marketing and they should both be researched before the marketing is created. Bibliography Briggs, S. , 1997. Successful tourism marketing. London: Biddles Ltd. Kotler, P. et al. , 1993. Marketing places. New York: the free press. Morgan, M. , 1996. Marketing for leisure and tourism. Essex: Prentice Hall. Page, S, J. , 2009. Tourism management, managing for change. Third edition. Oxford: Elsevier Ltd.