Market research and segmentation plan

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Market research and segmentation plan

  1. 1. Market research and segmentation plan<br />Amsterdam<br />Setting up a new strategy for Amsterdam is a result from the fact that the competition between cities in Europe increased. The result of a research done by Berenschot, commissioned by the municipality showed that Amsterdam had to differentiate itself more on an international level according to many ranking lists. Another reason is that markets started to be more demanding and are able to take decisions faster, Amsterdam had not pointed out its advantages clearly enough and it did not top any of the rankings so far. Therefore, a market research plan is essential to track and respond to changing market needs and support a sustainable development and marketing of tourism. Leading destinations don’t guess which trends and technologies are worth investing in, but build their marketing strategy on a solid base of travel research.<br />The purpose of our research is to examine the profile of Amsterdam as a travel destination, to understand the motivations and the benefits sought from the travel experience. Therefore, this study<br />focuses on the characteristics of individual travellers and is concerned with developing a means of grouping these travellers together in meaningful clusters or strata to develop more informed and strategic approaches to destination marketing. However, we recognize that findings of such a market segmentation study need to be closely integrated with other components of the destination decision model in order to develop coherent and effective marketing strategies that will have the necessary<br />capability to influence choice of destination. Recognizing that markets and those individuals who make up such markets are not homogenous that no one single market offering will satisfy all individuals. Therefore leisure travel destinations, which are comprised of multiple market offerings need to group customers together into meaningful market segments so as to better match marketing variables<br />with the unique characteristics of the various market segments.<br />Market research objectives:<br />To identify potential target market segments <br />To test the feasibility of entering a new market (such as MICE)<br />To determine market influences on timing, pricing, service<br />To identify and examine perceptions towards Amsterdam as a conference destination<br />To capture key concerns and expectations from travelers<br />To measure customer satisfaction and to benchmark satisfaction against competitors<br />To measure the attractiveness of cultural tourism in Amsterdam<br />To identify target visitors demand and behavior<br />To understand the reasons why domestic travelers don’t chose Amsterdam as a leisure destination<br />To pinpoint the sources of information in trip planning<br />To estimate the probable rate of repeat visits<br />Sample<br />800100107950Sampling unit -> Cross-sectional surveys of our target consumers developed through questionnaires such as:<br /> - the most positive aspects of Amsterdam <br />– the perceived image of the destination <br /> - price/quality ratio of Amsterdam on a scale ranging from 1 to 3 (value for money in restaurants, value for money in accommodations)<br /> - daily expenditures per nationality and travelers segment <br />The target market on which the research will focus can be seen as one of the core elements of the city marketing. These are:<br /><ul><li>Business people (MICE)
  2. 2. International visitors from U.S., Belgium, U.K., Germany, France, Italy and B.R.I.CS
  3. 3. Domestic visitors
  4. 4. VFR’s</li></ul>The target market consists of people of various income levels, ethnicities, age groups, gender.Therefore, we will make sure our sample will be a cross-section of these and will reflect the demographics.<br />Sample size: We plan to interview approximately 6000 tourists that will stay at least one night in the city or its surroundings. This will give a spread of responses and the opportunity to identify interesting differences.<br />Sampling procedure: stratified random sampling.<br />Research Methods<br />In order to gain in-depth insights on key issues we will use qualitative research as primary research method. This will include:<br /><ul><li>Surveys - completing questionnaires face-to-face or online
  5. 5. Focus groups
  6. 6. Online focus groups
  7. 7. Interviews (open questions).</li></ul>Monitoring the attitudes of visitors has been an important but problematic task for destination marketing organizations (DMOs). The standard approaches mentioned above have included tick box surveys and focus groups, in-depth interviews and other methods. The former are relatively cheap to administer but provide generally poor data. Consumer generated web content (including, but not limited to `blogs') may offer a way for destinations to monitor visitor attitudes. There may be particular value in a blog based market research tool because the content is provided in a less artificial setting than in surveys or interviews. The research will examine different sources of consumer generated web content about travel to Amsterdam and will evaluate the authorship and readership as well as the nature of the content itself. We propose a targeted approach to monitoring blogs that takes into account the market segments likely to engage in blogging and the aspects of the destination likely to come under scrutiny.<br />Secondary research will be used in order to serve as a background on the topic and to introduce models useful for destination strategy. Using secondary data or information can be an advantage because it offers savings in cost and time. Also it is a useful technique for the foundation of answering the research questions and it gives the opportunity to gain an insight on how others approached their topic and set up their methodology. <br />The survey and questionnaires will be designed to elicit the desired information most accurately and comprehensively. The Internet is a cheap and powerful instrument of market research nowadays which can be used in an innovative way to collect valuable data from primary as well as secondary sources.<br />We believe that the key to successful data collection through primary means lies in designing the questionnaire appropriately. However, we plan to keep the questionnaire simple and as brief as possible so that the respondents are encouraged to provide proper responses. Contests, prizes or some kind of freebies may be offered to the respondents in order to gain the best attention of the respondents in exchange. The target respondents will be chosen for primary data collection, and their responses will recorded accurately with minimum margin for error.<br />Secondary research methods will focus on:<br /><ul><li>Government statistics
  8. 8. Case studies
  9. 9. Public libraries
  10. 10. Chambers of commerce, trade boards, city hall and local government offices
  11. 11. Online and offline market research sources
  12. 12. Industry reports
  13. 13. Competitor information</li></ul>182880035560Objectives0Objectives<br />2636520190501828800344805Information requirements 0Information requirements <br /> <br />2636520412750<br />3543300365760Secondary researchSecondary research342900365760Primary researchPrimary research4335780762001143000152401143000152400<br />43434003238500011430003238500<br />342900290195Qualitative research00Qualitative research<br />116586025654000<br />263652033718501173480337185<br />1943100303530Data processing0Data processing<br />Develop a comprehensive market research and tracking system for Grey County to support marketing efforts<br />·         Provide information on key visitor markets and trends for the industry<br />Studies to be developed<br />Survey for leisure visitors<br />264414045085Surveys for business visitors to provide information on key visitor markets and<br />Surveys for international and domestic visitors trends for the industry in order to support destina-<br />Surveys for VFR tion marketing efforts<br />The market research will:<br />-improve the performance of certain aspects of the destination<br />-help to establish and satisfy the needs of the market <br />-show the way forward in strategic moves such as moving towards new market segments<br />-assist and improve marketing decisions, selecting the optimum alternative <br />With this market research, we aim to move beyond advertising towards developing Amsterdam as an important destination for meetings and city breaks within Europe. Through collaboration with stakeholders, understanding markets, product development and strategic positioning Amsterdam will build on its assets and experiences to attract the MICE sector. <br />An important aspect of the survey is to understand the meeting sector in order to strengthen Amsterdam’s position as a meeting city. The database which has been already constructed for this purpose will be improved each year in future. The aim is the creation of an extensive and comprehensive databank containing city-wide information for the benefit of the meeting sector. Data from earlier years will be included for comparison.<br />For the data collection we intend to approach directly people at the most important meeting ( both meeting locations and hotels with meeting facilities) in Amsterdam and the surrounding areas.<br />On the other hand <br />Destination development involves creating memorable experiences for visitors based on a critical mass of attractions, events and services and involves management of the destination’s assets in addition to marketing activities. The most successful destinations match their region’s demand generators with their market opportunities. Thus, to develop the tourism potential of Amsterdam, it is important to build on the products and experiences it offers combined with an understanding of its existing and potential markets. Being aware of the perception of Amsterdam’s tourists, the decision-making process and our target market’s expectations we will be able to obtain a competitive advantage by transmitting the UP in an efficient way and supporting further development of local and regional tourism industry. The results of the research will help Amsterdam to implement a new strategy which will enable the destination to surpass several competing European City Break destinations, such as Paris, Rome etc.<br />Putting marketing research into action<br />Research methodsPeriodSecondary research Online and offline market research 2 weeksPrimary research surveys1 to 2 months focus groups1 to 2 months online focus groups3 months interviews2 months<br />Marketing implementation executes the message formulated during the market research phase. With the right message ready to be communicated, it's time to go public in ways that are most suitable for Amsterdam.<br />Market segmentation<br />Amsterdam is not trying to appeal to everyone because not everyone looks for the same thing in a destination, and every destination cannot be all things to all people. Target marketing, focusing on a particular segment or segments of the market, allows for a more effective marketing plan. Our market research will define the market segments, which will find those tourists most interested in what Amsterdam has to offer. <br /> <br />The results of the research will determine the variables that distinguish marketing segments from other segments. The segmentation variables can be measurable because are related to consumer needs and behavior toward the destination. .<br />Variables for segmenting our consumer markets include: <br />Demographic - age, sex, fertility rates, migration patterns, and mortality rates, ethnicity, income, education, occupation, family life cycle, family size, religion and social class.<br />Geographic - climate, population density, subcultural values, different population growths in different areas.<br />Psychographic - personality characteristics, motives and lifestyles.<br />Benefits – dividing the market into groups according to the different benefits that consumers seek from traveling to the destination.<br />Behavioristic variables - Regular visitors<br /> -first time visitors<br />Once a target market has been defined, discovering where and why tourists travel is important when focusing advertising (including target market questions that can help to determine a target market and related motivations).<br />The benefits of market segmentation include the ability to gain a better understanding of a particular market, to improve techniques to predict consumers behavior and to improve the ability to identify and exploit new market opportunities. The capacity to divide markets into distinct groups of travelers, who respond differently to changes in marketing mix variables will enable the destination to influence tourism demand for particular market segments.<br />Despite the limitations of market segmentation techniques, it is important for the planning, management and marketing of Amsterdam as a travel destination to gain and improve understanding of the origin of its visitors, their travel patterns and travel motivations. Based on such understandings we can aim to alter marketing mix variables to influence decision making.<br />We believe that a creative combination of a-priori and post-hoc segmentation will lead to more original approaches to segmenting travel markets, producing solutions not yet exploited by competitor destinations. By considering a wide variety of possible approaches to market segmentation we will gain deeper insight to the market from a variety of perspectives.<br />The benefit segmentation study will adopt common approach, commencing with the analysis of secondary data and/or conducting in-depth interviews and focus groups to identify relevant attributes and benefits for the destination<br />To be effective, our marketing strategies will be derived as part of the overall strategic plan for the destination. Our plan relies on developing our mission, supporting the objectives and coordinating functional strategies so that Amsterdam will take advantage of emerging opportunities in the dynamic environment.<br />The market segmentation will be utilized as an important step in the process of identifying target markets. Once the homogenous group within the heterogenous market will be identified, we will evaluate each segment’s attractiveness and select one or more segments towards which marketing resources will be directed. Within each of the chosen segments we will formulate a market position aiming to place Amsterdam in clear, unambiguous, distinctive and desirable in the minds of target travelers, relative to competing destinations, thereby formulating an enhanced competitive position for our destination.<br />In a world of increasing homogeneity, driven by globalization and technology, creating a distinctive ‘sense of place’ for the travelers is very important to deliver a competitive advantage of the destination. Therefore, it is important that prospective external customers and local residents both share a similar view of the place, based on understanding the place’s evident and credible strengths. If these two perceptions are not in relative harmony with each other, then the place’s performance is likely to be suboptimal. But if they are in harmony, then ideally, this can lead to a virtous cycle whereby reinforcement of the destination’s core values through residents’ behavior influences external visitors’ perceptions. That’s why developing a proper market research it’s vital for the destination.<br />

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