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Brey sokimmorrisontm2007webbasedpermissionmarketing

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  • 1. ARTICLE IN PRESS Tourism Management ] (]]]]) ]]]–]]] www.elsevier.com/locate/tourman Web-based permission marketing: Segmentation for the lodging industry Eric T. Breya,Ã, Siu-Ian (Amy) Sob, Dae-Young Kimc, Alastair M. Morrisond a Kemmons Wilson School of Hospitality and Resort Management, University of Memphis, 3700 Central Ave., Suite 140G, Memphis, TN 38152, USA b Institute For Tourism Studies, Macao, China c Department of Hotel & Restaurant Management, University of Missouri-Columbia, MO 65211, USA d Hospitality and Tourism Management, College of Consumer and Family Sciences, Purdue University, West Lafayette, IN 47907, USA Received 26 December 2005; accepted 10 January 2007 Abstract Permission marketing is becoming an important tool in maintaining relationships with travelers via the Internet. Its growing importance can be seen in tourism marketing, specifically in the lodging industry. With an increase in industry use, the effectiveness of this technique needs assessment. This paper initiates this process by examining current methods used to collect contact information for the purpose of permission marketing. Three segments of the market are identified and compared based upon their willingness to supply contact information. Significant differences were found in socio-demographics, online habits, trip characteristics, and website design preferences. Implications for lodging marketers are presented and future research topics are discussed. r 2007 Elsevier Ltd. All rights reserved. Keywords: Consumer comparison; Lodging marketing; Permission marketing; Relationship marketing; Web marketing 1. Introduction sales and marketing that these sites afford (Gregory et al., 2005). To benefit from these technological advancements, Marketing to lodging consumers has gone through marketing methods not available for widespread use in the significant changes in recent history due to Internet growth. pre-Internet era have flourished. One such method, perm- Web-based techniques have become integral to successful ission marketing, is based upon garnering initial customer hotel sales and marketing (Gregory, Kline, & Breiter, consent to receive information about a product or services 2005). This channel offers major advantages over other from a company (Marketing Terms.com, 2004). The techni- communication forms by enhancing overall marketability que, considered an excellent venue for successfully reaching (Gilbert & Powell-Perry, 2002). Furthermore, lodging and maintaining consumers, has not garnered much attention websites can accelerate marketing, establish brand names, in lodging-based research. and expand current markets (Jeong & Choi, 2004). Given The need for research is compounded as the misuse of these benefits, developing an effective website is important this method carries detrimental impacts to marketing to lodging facilities regardless of size and other classifica- effectiveness. Spam, or unsolicited commercial e-mail tion differences (Ham, 2004). (UCE), occurs when consumers perceive e-mail commu- But just having a website does not guarantee that nications as unwanted or unnecessary (Hodges, 2004). potential or current guests will be attracted to the site Through misuse, permission that was granted can be (Kasavana, 2002). Within the lodging sector, proprietary- revoked and potential business lost. Oppositely, effective e- owned websites are realizing the need to further capitalize mail can lead to viral marketing, the electronic equivalent on the Internet (Miller, 2004), brought on by increased of traditional word-of-mouth (MacPherson, 2001). Much like its traditional counterpart, encouraging online referrals ÃCorresponding author. Tel.: +1 901 678 4584. from potential clients is both effective and economical. But E-mail address: ericbrey@memphis.edu (E.T. Brey). there exists a thin line between successfully encouraging 0261-5177/$ - see front matter r 2007 Elsevier Ltd. All rights reserved. doi:10.1016/j.tourman.2007.01.002 Please cite this article as: Brey, E. T., et al. Web-based permission marketing: Segmentation for the lodging industry. Tourism Management (2007), doi:10.1016/j.tourman.2007.01.002
  • 2. ARTICLE IN PRESS 2 E.T. Brey et al. / Tourism Management ] (]]]]) ]]]–]]] potential clients to forward a marketing message and being provide interested marketers with information about the seen as invasive (Nussey, 2004). Without research investi- types of advertising messages they would like to receive. gating the effective use of permission marketing and a need The marketers then use this information to target adver- to examine e-behavior within the lodging industry (Miller, tisements and promotions. The aim is to initiate, sustain 2004), a significant knowledge gap exists. This research and develop a dialogue with customers, building trust and begins to resolve this by providing a deeper understanding over time lifting the levels of permission, making it a more of permission marketing. By analyzing data concerning valuable asset (Kent & Brandal, 2003). Godin (1999) states: consumers’ willingness to supply information online, this Consumers are now willing to pay handsomely to save study’s two research objectives were to: time, while marketers are eager to pay bundles to get attentiony The alternative is permission marketing, O1: Segment groups of consumers based upon the levels which offers the consumer an opportunity to volunteer of permission they supply to websites. to be marketed to. By talking only to volunteers, O2: Examine group differences including socio-demo- permission marketing guarantees that consumers pay graphics, trip characteristics, online habits and beha- more attention to the marketing message (pp. 42–43). viors, and website design preferences. This technique is seen as reducing clutter and lowering While the first objective represents an initial effort to search costs for the consumer while increasing the targeting categorize consumers based upon permission granted, the precision of marketers (Godin, 1999; Krishnamurthy, 2001; second examines important differences between these Marinova, Murphy, & Massey, 2002). This is accomplished groups. Current evidence exists that consumer preferences by obtaining trust and building a two-way relationship online can be influenced by socio-demographics. Gender, with consumers. household income, and situational factors such as trip Permission marketing has three specific characteristics purpose or travel party significantly impact which informa- that set it apart from traditional direct marketing (Godin, tion sources are used (Luo, Feng, & Cai, 2005). Further- 1999). First, customers who permit their names to be more, direct correlation has been found between travel included on direct-mail lists can anticipate receiving behavior and online activities. In the examination of repeat commercial messages (anticipated). Second, the sending visitors, So and Morrison (2004) found that information company can personalize those messages (personal). Third, search behavior significantly affected repeat travel beha- the messages will be more relevant to the customers’ needs vior (2004). As for website design preferences, the need for (relevant). These characteristics are what allow marketers understanding is fundamental. Often the most difficult to cut through the clutter and speak to prospects as friends, aspect of permission marketing is obtaining qualified leads not as strangers. This personalized, anticipated, frequent, (Lewis, 2002). In addition, additional research is needed to and relevant communication has a greater impact than a examine how usability of hotel websites impacts online random message displayed in a random place at a random marketing initiative (Essawy, 2006). By examining differ- moment. Five levels of permission can be won from ences in website preferences, additional insight into design customers targeted by a permission-marketing campaign dynamics in permission marketing can be examined. (Godin). These levels include: Based upon these objectives, the outcomes of this study will provide an understanding of consumers’ willingness to L1: ‘‘Situation’’ permission is a one-time or limited-time supply contact information, the methods of collecting data permission, which is the least potent of the five levels. for permission marketing purposes that are most successful, This is given when consumers agree to receive sales or and a comparison of the characteristics of the consumer promotional messages from a company for a specified segments. These findings are then applied in a lodging time. context and applications for marketing professionals are L2: ‘‘Brand trust’’ is the most common way marketers discussed along with future research opportunities. practice their craft. With this permission, consumers have developed confidence in a product or service that 2. Permission marketing carries a particular or well-known brand name. L3: ‘‘Personal relationship’’ uses individual relationships Most mass media venues do not allow marketers to between the consumer and marketer to temporarily target consumers with a high degree of precision, even refocus the attention or modify the consumer’s beha- though targeting and segmenting are arguably marketing vior. This approach is the best technique to sell centerpieces (Krishnamurthy, 2001). With this difficulty customized or highly involving products. existing, one of the most recent direct marketing ap- L4: In the level of ‘‘points permission,’’ points are a proaches focuses on consumers’ preferences and develop- formalized, scalable approach to attracting and keeping ing a meaningful interactive dialogue (Kent & Brandal, the prospect’s attention. This involves consumers 2003). One such proposed technique is permission market- allowing the company to collect personal data and to ing (Godin, 1999), which seeks permission in advance from market its products and services to them on a points- consumers to send marketing communications. Consumers based loyalty scheme. Please cite this article as: Brey, E. T., et al. Web-based permission marketing: Segmentation for the lodging industry. Tourism Management (2007), doi:10.1016/j.tourman.2007.01.002
  • 3. ARTICLE IN PRESS E.T. Brey et al. / Tourism Management ] (]]]]) ]]]–]]] 3 L5: ‘‘Intravenous’’ refers to the highest level of permis- permission marketing can be implemented in any direct sion to be won from consumers. This involves customers medium, its use has increased with the advent of the trusting the marketer to make buying decisions for Internet and e-commerce. The emergence of permission them. marketing via the Internet is based upon the low cost of marketer-to-consumer communication (Hoffman & Novak, According to MacPherson (2001), one of the theories 1996; Shiman, 1996). The development of the Internet has behind permission marketing is that, presumably, a also enabled rapid feedback mechanisms allowing instanta- customer who has given permission to receive promotions neous two-way communication (Hoffman & Novak). is a better, more loyal and profitable customer. It entails a An additional reason for executing permission marketing shift in power from the marketer to the consumer. via the Web has been the failure of the direct mail approach Consumers’ permission has to be sought, which allows of sending unsolicited promotional messages. The primary consumers to realize the power in the data they can provide example of this is UCE or ‘‘spam’’ as it is widely known (Kent & Brandal, 2003). (Cranor & LaMacchia, 1998). Despite the enormous Krishnamurthy (2001) also points out that the concept amount of spam disseminated on the Web, this method of permission marketing is closely related to two concepts does not represent a legitimate form of marketing commu- that have been discussed within marketing literature— nication (Shiman, 1996). It leads to an excessive message relationship marketing (Han, Hu, Bal, & Jang, 2005) and volume for consumers, weakening of brand reputation and one-to-one marketing (Simonson, 2005). Relationship a slowing of the entire network. In this sense, permission marketing proposes that marketers focus on long-term marketing can be seen as a feasible alternative for Internet relationships with customers rather than single transac- marketing. tions. The main idea of one-to-one marketing is that marketers must think of a segment as one person and 2.2. Demographic influence customize the marketing mix to each customer. Krishna- murthy (2001) also adds that while ‘‘permission market- Demographics and situational variables could also ing’’ was coined by Godin, the generalized concept of significantly impact permission marketing activities. Ex- customer permission in direct marketing had been pre- tensive literature exists supporting the close relationship viously discussed in the context of privacy issues. between demographic characteristics and information search behavior (for example Dodd, 1998; Eby, Molnar, 2.1. Permission marketing and the Internet & Cai, 1999; Luo et al., 2005; Prideaux, Wei, & Ruys, 2001). This body of literature has indicated that respondent According to Farris (2001), permission marketing has characteristics influence information sources and indivi- mainly been adopted by organizations practicing Internet duals’ attitudes toward different online channels. Demo- and e-mail marketing. E-mail in particular can be inte- graphic characteristics such as gender, education, income, grated into a one-on-one medium, with a more interactive race, and vocation are considered to be influential factors and multi-layered communication process. MacPherson for individuals’ Internet usage and search behavior. (2001) describes permission based e-mail marketing as Specifically, for example, Internet users are more likely being the future of direct marketing with such benefits as: Caucasian males with higher education and household direct communication with prospective and existing custo- income (Bonn, Furr, & Susskind, 1998; McDonald & mers, interactivity, lower costs, and targeting of qualified Adam, 2003). leads. Another important determinant of search behavior and In the early stages of Internet marketing, banner channel usage is an individual’s experience. Familiarity and advertising and sponsorships were theorized as having expertise, relating to both websites and the destination of potential to provide consumers with relevant information. interest, have been posited as impacting information search Despite early promise detailed in pioneering research behavior (Gursoy & McCleary, 2004). Gender also (Hoffman & Novak, 1996), click-through rates have not produces differences as males’ technology usage is dictated improved, averaging approximately 0.5 percent. Moreover, by perceptions of usefulness while women are influenced by eye-tracking research indicates that Internet users may perceptions of ease (Venkatesh & Morris, 2000). Prior avoid looking at banner ads during online activities (Dreze experience or familiarity with a product also impacts & Hussherr, 2003). In this sense, it may reasonably be consumer choices. As familiarity with a product increases assumed that placing banners on websites is ineffective in the time required, depth of information gathered, and delivering the message. overall confidence change (Park & Lessig, 1981). Further- Given these current issues of marketing to the online more, as people gain experience, their knowledge accumu- audience, researchers argue that permission marketing lates due to the integration of information. This increased offers improved targeting by helping consumers interface experience with a product increases reliance upon stored with marketers most likely to provide relevant promotional product information in-lieu of collected information messages (Chittenden & Rettie, 2003; Godin, 1999; (Park, Mothersbaugh, & Feick, 1994). In this sense, Kavassalis et al., 2003; Krishnamurthy, 2001). Although trip experience and characteristics potentially impact Please cite this article as: Brey, E. T., et al. Web-based permission marketing: Segmentation for the lodging industry. Tourism Management (2007), doi:10.1016/j.tourman.2007.01.002
  • 4. ARTICLE IN PRESS 4 E.T. Brey et al. / Tourism Management ] (]]]]) ]]]–]]] information search behavior and the success of permission Internet to decide on accommodations in the last 12 marketing. months selected for analysis (n ¼ 1066). Accompanying the expansion of literature on Web-based Questions that sought responses as to when respondents permission marketing has been the exponential growth provided their name or e-mail were used for the analysis. within industry, specifically within the lodging sector. These measures were: ‘‘given name/e-mail to personalize a While this direct method of marketing to consumers is site’’, ‘‘given name/e-mail to obtain a login or password’’, purported to be successful in comparison to other Web- ‘‘given name/e-mail to subscribe to a newsletter’’, ‘‘given marketing techniques, relatively little is known about its name/e-mail to receive notification of discounts’’, ‘‘given application. In addition, a dearth of information concern- name/e-mail to enter a contest’’, ‘‘given name/e-mail to ing how demographics and experience influence tourist’s purchase online’’, and ‘‘given name/e-mail to request a online information search behavior exists. Based upon travel brochure’’. The responses were either yes or no. these information gaps, this research will establish a better These questions were selected based upon the assumption understanding of impacts through comparison of consu- that a company would receive access to a consumer for mer segments. permission marketing activities. Several statistical techniques were applied to analyze the data. Cluster analysis, which allowed the researchers to 3. Methodology group consumers based upon similar characteristics, was used to identify clusters or like groups of respondents The data utilized in this study were from the 2001 (Hair, Anderson, Tatham, & Black, 1998). Discriminant Internet Travel Survey conducted for the Canadian Tour- analysis was then used to validate the clusters. After the ism Commission (CTC). While collected in 2001, the data clusters were identified, each segment was profiled based are valid to investigate permission marketing in the current upon the type of channel to which respondents were willing environment for several reasons. First, the nature of this to provide names/e-mails, and the total number of channels research is explorative and investigates an area with used by respondents in each cluster. Chi-square analyses minimal coverage. Use of this data provides an introduc- and one-way ANOVAs were conducted to determine if the tion of permission marketing within the lodging industry clusters (segments) were significantly different. Multino- and provides impetus for research into this increasingly mial logistic regression, which analyzes the relationship effective marketing method (Dufrene, Engelland, Lehman, between independent and dependent variables (Hair et al., & Pearson, 2005). Second, previous studies dealing with 1998), was then used to compare socio-demographics, tourism consumers have effectively used mature data in online habits, trip characteristics, and website design segmentation-based studies (Carmichael & Smith, 2004). preferences for the three clusters. While recently collected primary data would be most The socio-demographic characteristics included age and advantageous, this survey provides satisfactory informa- income. The statements that measured online habits were tion for the study’s objectives. Third, even though ‘‘How many hours, in total, do you personally surf/browse consumer’s perceptions of e-mail have evolved (Hoffman, the Internet for work or personal reasons in an average Novak, & Venkatesh, 2004), methods of building an e-mail week?’’ and ‘‘How long have you been using the Internet to list for permission marketing have remained fundamentally surf/browse the World Wide Web?’’ The trip characteristics unchanged. This study not only provides an introductory were ‘‘How many vacation, leisure or get-away trips have analysis of the topic but serves as a foundation from which you taken in the past 12 months (since September 2000)?’’, future comparisons can be made. ‘‘Number of nights away from home?’’, ‘‘How many hours The focus of the Internet Travel Survey was to evaluate in total, did you spend on the Internet planning/research- online travel behaviors by collecting information relating ing your trip?’’, ‘‘Did you have any destination in mind to trip planning information sources, number and types of when you started planning on the trip?’’, ‘‘How much did online sources, time spent online specifically for trip you spend’’, and ‘‘Where was the destination?’’ As this planning, information search timelines, influence of in- study examined destinations within North America, the formation search in decision making, online travel booking responses for ‘‘Where was the destination’’ were recoded to behaviors, and socio-demographic information of North either ‘‘within state/province’’ or ‘‘out of state/province but American travelers with Internet access (iTravellers). within North America.’’ Collection of data was completed via two methods: To measure website design preferences, principal com- telephone interview and Internet survey. The Internet data, ponents factor analysis with varimax rotation was used to collected between November 8th and December 18th, 2001, reduce the original 10 questions into fewer dimensions. The was made available for this research. The sampling frame, 10 questions used were ‘accommodations should be consisting of e-mail addresses collected from participating presented using video’, ‘accommodations should be pre- destination management organizations within Canada, sented using virtual tours’, ‘accommodations should be were sent an e-mail requesting participation along with a presented using flash’, ‘accommodations should be pre- link to the survey. A total of 2470 respondents completed sented including ratings’, ‘accommodations should be the online survey, with those indicating the use of the presented including price’, ‘accommodations should be Please cite this article as: Brey, E. T., et al. Web-based permission marketing: Segmentation for the lodging industry. Tourism Management (2007), doi:10.1016/j.tourman.2007.01.002
  • 5. ARTICLE IN PRESS E.T. Brey et al. / Tourism Management ] (]]]]) ]]]–]]] 5 presented using objective information’, ‘accommodations multiple discriminant analysis, if there is K groups, KÀ1 should be presented using testimonials’, ‘accommodations discriminant functions will be estimated. Since this study should be presented using text’, and ‘accommodations identified three clusters, two functions were estimated. The should be presented using pictures’. A minimum eigenvalue overall Wilks’ lambda statistics (0.054; 0.289) for both of one was used in order to control the number of factors functions were statistically significant (po.0001). A classi- extracted. All the items had factor loadings between 0.542 fication procedure within discriminant analysis had 97.4 and 0.833. The results of the principal components analysis percent accuracy in predicting membership of the three indicated four factors, which were ‘‘accommodation should groups. be presented in video/virtual tour/flash’’, ‘‘accommodation The three segments identified from the cluster analysis should be presented in price/ratings’’, ‘‘accommodation were labeled as the recurrent (RG), typical (TG), and should be presented in objective information’’, and occasional (OG) groups. These groupings and names ‘‘accommodation should be presented in text pictures’’. reflected the propensity to supply names/e-mail addresses These factors explained a total of 59.11 percent variance. while visiting websites. RG members provided their contact information the most while the OG provided their’s the 3.1. Sample characteristics least. The TG represented middling responses compared to RG and OG. The ANOVA results demonstrated that the Approximately 57.7 percent of the respondents in the three clusters were significantly different in terms of the sample were female (Table 1). Around 59 percent of the total number of the channels to which they were willing to respondents were between 35 and 54 years old with the provide their names/e-mail addresses while visiting a site majority between 45 and 54 years. Half of the respondents (Table 3). The Chi-square results confirmed significant (52.3 percent) had annual household incomes of more than differences among the channels used by the three segments $60,000. About 21.4 percent had household incomes of (Table 2). $40,000–$59,999. The majority (39.4 percent) graduated For the RG, the average number of channels that from university/college/technical school, and approxi- respondents were willing to give names/e-mails was the mately 20 percent had postgraduate education. highest with an average of 5.93 channels compared to the TG’s 4.15 channels, and the OG’s 2.87 channels. All RG 4. Results and discussion respondents were willing to give their names/e-mails on the Internet to request a travel brochure. Besides requesting a 4.1. Cluster analysis results travel brochure, the primary channels that RG respondents were willing to provide their names/e-mails were to obtain The results of the cluster analysis identified three a login or password, to enter a contest, to subscribe to a respondent groups. The three-cluster solution was vali- newsletter, and to receive notifications of discounts. dated with a more stringent canonical discriminant The two primary purposes for the TG to supply their analysis, which showed significant differences among the names/e-mails were to obtain a login or password and to three clusters in all seven variables with po0.000. In a enter a contest. None of the TG respondents were willing to provide their names/e-mails to request a travel brochure. For the OG, the primary channels to which respondents Table 1 Descriptive profile of the sample were willing to provide their names/e-mails were to request a travel brochure and to obtain a login or password. Type Percentage Type Percentage Comparisons of the three segments’ socio-demographics uncovered several statistically significant differences Gender Annual household income Male 42.3 Less than $15,000 3.5 (Table 3). Approximately 51.8 percent of the RG was Female 57.7 $15,000–$24,999 7.1 between 30 and 49 years old, compared to 56.3 percent of Age $25,000–$34,999 15.8 the OG, and 58.4 percent of the TG. Gender composition 18–24 2.6 $40,000–$59,999 21.4 also differed as 54.5 percent of the OG was male and only 25–29 7.5 $60,000–$79,999 18.5 37.4 percent of the TG was male. The incomes of the 30–34 10.4 $80,000–$99,999 12.7 35–39 13.5 $100,000–$149,999 12.3 segments varied as 53.7 percent of the RG earned $60,000 40–44 14.4 $150,000–$199,999 4.7 or more, compared to 54.8 percent of the OG, and only 45–49 15.8 $200,000 or more 4.1 46.2 percent of the TG. Employment status also differed as 50–54 15.3 Education 14.7 percent of the OG compared to 10.9 percent of the TG 55–59 10.4 Less than high school 0.4 was self-employed. Homemakers were about 11 percent of 60–64 6.0 Some high school 2.5 65–70 2.7 Graduated high school 11.5 the RG group and only 3.6 percent of the OG. More than 3 71 or 1.3 Some university or college 25.8 percent (3.4) of the TG were students while less than 1 older percent (0.9) of the OG was students. About 5 percent of Graduated university or 39.4 the TG and 0.8 percent of the OG were unemployed. college Trip characteristics were also analyzed with only the city Postgraduate 20.4 trip variable indicating significant difference between Please cite this article as: Brey, E. T., et al. Web-based permission marketing: Segmentation for the lodging industry. Tourism Management (2007), doi:10.1016/j.tourman.2007.01.002
  • 6. ARTICLE IN PRESS 6 E.T. Brey et al. / Tourism Management ] (]]]]) ]]]–]]] Table 2 Profiles of the three-cluster solution Variables Recurrent Occasional Typical Total F/Chi-squareà n ¼ 604 n ¼ 224 n ¼ 238 No. of channels respondents willing to give name/e-mail 5.9288 2.8705 4.1471 4.8884 944.240 Given name/e-mail to personalize a site 182 31 40 253 32.087 Given name/e-mail to obtain a login or password 578 137 214 929 176.093 Given name/e-mail to subscribe to a newsletter 562 90 170 822 264.361 Given name/e-mail to receive notification of discounts 554 52 189 786 396.542 Given name/e-mail to enter a contest 571 50 200 821 489.932 Given name/e-mail to purchase online 530 113 183 826 130.391 Given name/e-mail to request a travel brochure 604 170 0 774 NAa à p-values ¼ 0.000. a The expected cell of the typical group do not satisfy the Chi-square tests assumption in which any expected cell size should be at least 5, Chi-square test is not applicable in this case. Table 3 Three-cluster significant differences RG (%) OG (%) TG (%) Total (%) Chi-square n ¼ 604 n ¼ 224 n ¼ 238 Socio-demographic Age 18–24 2.65 1.79 3.36 2.63 34.36* 25–29 8.11 6.25 7.14 7.50 30–34 10.10 12.05 9.66 10.41 35–39 13.58 10.71 15.97 13.51 40–44 11.59 17.86 18.49 14.45 45–49 16.39 15.63 14.29 15.76 50–54 16.23 11.61 16.39 15.29 55–5 9 10.93 9.82 9.66 10.41 60–64 6.79 6.70 3.36 6.00 65–70 2.81 4.02 1.26 2.72 71 or older 0.83 3.57 0.42 1.31 Gender Male 39.74 54.46 37.39 42.31 17.56** Female 60.26 45.54 62.61 57.69 Annual income Less than $15,000 3.38 5.53 1.71 3.45 26.98* $15,000–$24,999 6.42 7.37 8.55 7.09 $25,000–$39,999 16.39 11.06 18.80 15.82 $40,000–$59,999 20.10 21.20 24.79 21.38 $60,000–$79,999 19.09 17.51 17.95 18.50 $80,000–$99,999 14.36 11.98 8.97 12.66 $100,000–$149,999 12.67 14.75 8.97 12.27 $150,000–$199,999 4.39 3.69 6.41 4.70 $200,000 or more 3.21 6.91 3.85 4.12 Employment status Self- employed 11.98 14.73 10.92 12.32 27.47** Employed full-time 55.07 62.05 61.34 57.95 Employed part-time 5.16 5.36 4.20 4.99 Homemaker 10.98 3.57 7.56 8.65 Student 3.00 0.89 3.36 2.63 Retired 10.82 12.50 7.56 10.44 Unemployed 3.00 0.89 5.04 3.01 Trip purpose and pattern Trip pattern City trip 29.22 16.52 21.52 24.81 34.27** Outdoor focus 23.71 29.02 29.54 26.13 Touring trip 21.70 34.38 18.57 23.68 Visiting friends/family 25.38 20.09 30.38 25.38 n ¼ 1022, *po0.10, **po0.05. Please cite this article as: Brey, E. T., et al. Web-based permission marketing: Segmentation for the lodging industry. Tourism Management (2007), doi:10.1016/j.tourman.2007.01.002
  • 7. ARTICLE IN PRESS E.T. Brey et al. / Tourism Management ] (]]]]) ]]]–]]] 7 groups. About 29.2 percent of the RG indicated their information on websites when compared to those in the recent trip was more of a city trip as compared with only OG (Table 4). RG members were also more likely to prefer 16.5 percent of the OG. accommodation sites to be presented in video/virtual tour/ flash, price/ratings to be included on the site, and objective 4.2. Multinomial logistic regression results accommodation information when compared to the TG. When compared to the OG, the RG tended to spend more The results of the multinomial logistic regression hours online per week and devote more hours to online indicated significant differences among the three groups researching/planning for vacation trips. However, they (RG, TG, and OG) based upon their socio-demographics, were less likely to spend a longer amount of time on the online habits, trip characteristics, and website design actual vacation and less likely to vacation within their preferences. The results showed a statistically significant home state or province. difference among the three groups with a Chi- The OG tended to spend fewer hours online per week but square ¼ 167.626 and a p-value of less than 0.001 (Table 4). took more vacation trips in the last year when compared to For the RG, the odds of the number of hours online per the TG (Table 4). Additionally, the OG was more likely to week among these respondents were 1.134 times greater spend more time at a destination and stay online longer when compared to the TG (Table 4). The odds that the when compared to those in the TG. The OG was more number of vacation trips in the last year among those in the likely to have taken their last vacation within their home RG were 1.245 times more than for the TG. The odds state or province than those in the TG. concerning number of hours spent online research/plan- ning for the last recent vacation trip were 1.3 times greater 4.3. Implications for the TG. Generally, the RGs were more likely to spend additional hours online per week, have taken more This study brings to light important implications that vacation trips in the previous year, and spend more hours lodging marketers can use to address the need to capitalize online to research and plan vacation trips. on the Internet and improve their websites. The first is In terms of web design preferences, those in the RG were identification of distinct online consumer groupings: 1.38 times more likely to prefer video/virtual tours and recurrent, typical, and occasional. These group labels flash, 1.149 times more likely to prefer price/ratings on reflect the degree of potential access that marketers have to websites, and 1.180 times more likely to prefer objective consumers to collect contact information. These groupings Table 4 Multinomial logistic regression results Predictors I-Reference group typical (TG) II-Reference group occasional (OG) Recurrent (RG) Occasional (OG) Recurrent (RG) Typical (TG) Socio-demographic Age 1.063 1.066 0.997 0.938 Annual income 1.023 1.007 1.016 0.993 Online habit Hours spend online per week 1.134** 0.720*** 1.574*** 1.388*** Time began online 1.053 1.154* 0.912 0.867* Trip characteristics Number of vacation trips in the last year 1.245*** 1.188** 1.047 0.841** Number of nights away on recent trip 0.998 1.067** 0.935*** 0.937** Hours spent online research/planning last vacation trip 1.300*** 1.041 1.248** 0.961 Destination in mind when you started planned on the 1.096 1.254 0.874 0.797 last vacation trip Money spent on most recent trip 0.961 0.998 0.962 1.002 Destination of the last vacation trip 0.924 1.416* 0.652** 0.706* Website design preferences Accommodation should be presented in video/virtual 1.380*** 1.166 1.183* 0.857 tour/flash Accommodation should be presented in price/ratings 1.149* 1.031 1.114 0.970 Accommodation should be presented in objective 1.180* 1.013 1.166* 0.987 information Accommodation should be presented in text pictures 1.067 0.978 1.091 1.023 LR Chi-square 167.626*** Log likelihood 1848.465 n ¼ 1022, *po0.10, **po0.05, ***po0.001. Please cite this article as: Brey, E. T., et al. Web-based permission marketing: Segmentation for the lodging industry. Tourism Management (2007), doi:10.1016/j.tourman.2007.01.002
  • 8. ARTICLE IN PRESS 8 E.T. Brey et al. / Tourism Management ] (]]]]) ]]]–]]] supply an initial context in which further exploration of is for urban properties’ marketers to supply stimulating permission marketing can be conducted in tourism and and technologically advanced web content with objective hospitality. While the current study does not provide an in- and pertinent information. Despite the high technology depth analysis of possible differences based upon levels of aptitudes of this consumer group, everyone requested a permission, the findings indicate meaningful differences printed brochure via postal mail. This suggests that among them. although the Web is a powerful source of information, The second finding is the variation in willingness to traditional print materials are still required by Internet- supply information for specific information purposes. savvy consumers. There was only one channel to which more than 60 percent Despite greater difficulties in collecting contact informa- of all three groups were willing to supply their information; tion from the OG, they are still an attractive segment. They to obtain a login or password. The RG were willing to typically have a higher number of vacation nights and are provide their names/e-mails to five of the six other apt to travel more than the TG and only slightly less than channels. The TG was generally less willing to provide the RG. Of particular interest is the location and how the their details than the OG, but a majority would do so for OG prefers to travel. They are more likely to travel in a four of the six other channels. The OG was the most tour group closer to home than the RG and TG. Therefore, reluctant to supply their details, with a majority willing to accommodation providers looking to attract the OG do so for just two other channels. This indicates that should develop web-based permission marketing that lodging properties should develop their websites with three caters to older, regional group travelers and concentrate alternative strategies to collect permission marketing on the most successful methods to collect information. information: primarily rely upon the login/password Given these differences among the three consumer groups, method, advancement of current methods, or develop permission marketing can and should be tailored to each new avenues. The first strategy would be to increase the group based upon the individual lodging property. effectiveness of the most popular method for catching consumer’s information, the login/password system. This 4.4. Future research could be accomplished by providing additional incentives for logging in or simplifying the procedure (i.e., collecting This research study analyzed seven channels used to only the consumer’s name and e-mail address). The second collect information to pursue a permission marketing and third strategies would be to address the lack of agenda. Three primary groupings of consumers were consistency in effectively collecting consumer information identified and compared. While this study provides under- across the groupings. A resort website should supply a standing regarding specific elements of permission market- variety of channels to effectively collect information from ing, additional areas of study should be pursued. First, this consumers, either that presented in this study or through study did not examine nonresponse as secondary data were development of new methods. used and that information was unavailable. Future studies The third finding directly relates to the fact that informa- may examine the nonresponses and overall generalizability tion can only be collected successfully from all consumer to a wider group of tourism customers. Second, subsequent groups through one channel, the login/password method. studies should concentrate on directly analyzing lodging This channel is best represented by the first level of consumers. Using the Internet Travel Survey allowed for permission, the situational level. Although marketers exploration of the permission marketing concept, but possess a direct link to the consumer, lodging companies respondents were not specifically targeted for their lodging need to explore avenues in which communication at a higher experiences. By examining lodging-only consumers, com- level can be established. The goal should be the intravenous parisons between lodging types and perceptual differences level, where they can make the decision for the consumer. can be explored. Third, special consideration should be But as the feasibility of this option is uncertain, the point’s given to the security features of websites (Kesh & level, which is second highest, may be a more realistic goal. Ramanujan, 2004). While current data allowed for This is where personal information can be collected to make exploration, additional studies should take into account specific suggestions to the consumer. Upon attaining this the complexity of data security relating to lodging websites. level of trust between the marketer and consumers, market- Fourth, the permission marketing function should be ers would have greater influence to ‘‘suggest’’ those products further investigated to support hospitality and tourism in which they want consumers to actively participate. operators. As numerous components have been identified Of specific interest for lodging marketers are the as impacting effectiveness, personalization and previous differences between each consumer group. The RG is more relationships, for example, should be examined (Tezinde, likely to be traveling to an urban location regardless of trip Smith, & Murphy, 2002). Similarly, research focusing on purpose. This presents specific opportunities and chal- factors affecting response rate success such as subject line lenges for lodging properties in these locales. An almost content, e-mail length, incentives and image use should be effortless opportunity to collect contact information exists examined (Chittenden & Rettie, 2003). By examining these as the RG have a greater propensity to supply contact and other relevant topics, a substantial contribution to information through most existing channels. The challenge hospitality and tourism marketing can be made. Please cite this article as: Brey, E. T., et al. Web-based permission marketing: Segmentation for the lodging industry. Tourism Management (2007), doi:10.1016/j.tourman.2007.01.002
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