Catégorie : Customer segments

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Customer segments

Girlfriend getaways

femmes voyage entre copines une

A flourishing market

Although we were unable to find recent statistical data on women’s travel, a 2013 American Express survey reported a record number of trips involving female friends or family, with 56% of female travellers saying they had taken a « women-only » trip.

This booming customer segment led to a 230% increase in the number of US businesses specializing in women-only travel between 2008 and 2014, according to Marybeth Bond, author of the Gutsy Traveler blog and a women’s travel expert.

This booming customer segment led to a 230% increase in the number of US businesses specializing in women-only travel

Although Intrepid Travel, a small-group tour specialist, reports that 63% of the 100,000 reservations made through its Website in 2012 came from women 25 to 39 years old, those aged 60 and over make up a large proportion of female travellers. Now retired, they travel because they have the time and the resources.

According to Kelly Lewis, founder and publisher of Go! Girl Guides, guidebooks for female travellers, women are looking for more active travel experiences or those that involve volunteering. However, health and safety still remain key concerns. Let’s take a look at the tourism industry’s efforts to adapt to this lucrative market.

Girlfriend-friendly hotel packages

Many « girlfriend getaway » hotel packages feature traditional spa and massage sessions like the one at the Auberge Godefroy in Bécancour, the Hotel Spa Watel in Sainte-Agathe-des-Monts, and the Auberge de la Montagne Coupée in the Lanaudière region. The girls’ getaway at the Auberge and Spa West Brome even includes a chick flick and popcorn! Other packages like those at the Courtyard Marriott Niagara Falls and the Andrew Pinckney Inn focus instead on shopping and food.

For something a little less traditional, the Wellness and Workout Weekend in Charlevoix at the Le Germain Hotel in Baie-Saint-Paul invited women to a fall weekend of hiking on the surrounding trails. The full package included a yoga session, hiking, thermal spa experience and a lecture about nutrition.

If a little adventure and entertainment is what you seek, several member resorts of Resorts of Ontario offer activities like poker lessons, courses in cocktail mixing or jewellery making, an extreme course, paintball, hiking and mountain biking.

filles resort ontario

Source: Resorts of Ontario

Is the distribution network targeting the girlfriend getaway market?

Not exactly. However, it does offer products for groups of women with similar interests like outdoor activities or adventure travel. Wild Women Expeditions has been catering to women for over 25 years with a host of outdoor activities like canoeing, kayaking, rafting, biking, hiking and horseback riding on nearly every continent.

World Expeditions, which specializes in small group adventure tourism, has seen a substantial increase in the number of female clients over the past 20 years, with this group rising from 38% of its clients in 1996 to 54% in 2016. Even on the most challenging itineraries, such as mountaineering or long-distance mountain treks, women now represent 30% of the group. Because of this, the tour operator has developed a brand new range of women-only active adventures that will launch in 2017

Destinations promoting girls’ weekends

The Chattanooga Convention and Visitors Bureau began marketing packages designed specifically for women in 2010, a year after the state of Tennessee launched its promotional campaign aimed at female tourists. Its girlfriend getaways include spa treatments, jewellery making, winery tours, meals in local restaurants and, of course, shopping, all with a « behind the scenes » aspect that offers something out of the ordinary.

Seetorontonow, the Tourism Toronto Website, clearly features its girls’ weekends, offering three itineraries involving luxury, spa, food, shopping, museums and entertainment.

femmes bar Toronto

Source: Tourism Toronto

A girlfriends’ fishing trip – why not?

To promote hunting and fishing activities to urban women, the Association des pourvoiries de la Mauricie launched the « Trip de filles » radio campaign that ran from February 29 to March 11, 2016. Female listeners had to answer questions about wildlife to be eligible for a chance to win a package for four offered by the outfitter Le Seigneurie du Triton.

Orvis, a fishing and outdoor equipment retailer in Vermont also runs a school and organizes trips. To celebrate its 50th anniversary this year, Orvis is offering a women-only fly-fishing trip to Belize’s largest island.

trip filles Mauricie

Sources: Pourvoiries Mauricies

Even the sharing economy is getting in on it

A product of the sharing economy, the Website Copines de voyage posts new travel products each week, offering those interested a platform to discuss potential trips with other interested parties before even making a reservation. Once the minimum number of participants has been reached, the trip is confirmed.

In 2015, nearly two million Canadian women 18 years and up travelled in Quebec. Why not take a greater interest in offering them a range of products and services, including girlfriend getaways? Give it a try and see what happens!

Image on first page: Pixabay

 

Catégories
Customer segments Products and activities

Generation Y, the new face of business travel

Why take an interest in the business travel of Generation Y?

First of all, because of the potential: Millennials currently make up about one-third of all passengers on business flights in the United States and their share should rise to 50% by the year 2020, while that of Baby Boomers will drop to 11%.

Secondly, they spend more on travel than members of other generations, according to a survey by Boston Consulting Group. When travelling for business, they indulge in extras: they frequently make last-minute reservations, opt for refundable tickets, change their seat for one with more legroom, make changes to their itinerary, and splurge on high-end meals or onboard Wi-Fi, all of which leads to higher-than-average business travel expenditures.

Booking and planning travel

Spontaneity and connectivity are the hallmarks of Gen Y business travellers, so mobile devices are crucial: nearly one third (32%) of Millennials use smartphones to book travel while 20% use tablets, compared to just 12% of business travellers over 45. They are also much more likely than their elders to use mobile devices to enhance their travel experience: nearly three-quarters of them have travel apps on their smartphones.

for Gen Y, meetings have seven possible purposes: celebrate, decide, educate, ideate, network, produce and promote

To satisfy this demanding clientele, the Marriott chain has introduced an innovative concept that reinvents how meetings are planned. Meetings Imagined is a very visual, social site that offers expert advice, information on the latest trends in the world of event planning and hundreds of inspiring photos to stimulate creativity. Users of the site can work with the hotels to design customized experiences or browse the ideas proposed by participating hotels. They can also post their favourite images on social media sites like Facebook and Pinterest. The concept was the result of research showing that, for Gen Y, meetings have seven possible purposes: celebrate, decide, educate, ideate, network, produce and promote. So instead of concentrating solely on dates, rates and floor plans, the Meetings Imagined approach focusses on the specific purpose of the meeting to create and design a more personal experience.

CN_Affaires_Millenials_image1

The importance of social networks

The majority (80%) of young business travellers attach considerable importance to online reviews when planning travel. They are also much more likely to post a negative online review of a hotel, restaurant or mode of transport (airline, public transit, taxi or rental car): 26% of those 34 and under said they had done so in the last year, compared to 14% of their older peers. Hotels were the most popular subjects of negative reviews from US business travellers, just ahead of restaurants.

The popularity of « bleisure » travel

The line between business and leisure is become increasingly blurred, particularly among young people. According to a survey conducted by the Hilton Garden Inn chain, 84% of Gen Y business travellers are willing to extend a business trip to take in a few days of leisure, a much higher number than their older peers. Furthermore, 65% said that exploring a new city was the best part of a business trip.

Are Gen Y travellers loyal?

although inclined to join loyalty programs, they do not actually show a lot of brand loyalty

Young business travellers are more likely to join loyalty programs: half of them take such programs into account when booking flights (48%) and hotels (51%), compared to a third of travellers ages 46-65 (31% and 30%, respectively). That being said, although inclined to join loyalty programs, they do not actually show a lot of brand loyalty. In fact, they are less brand loyal than their elders and more apt to switch from one airline or hotel chain to another if they believe the loyalty program is better for them. In fact, Gen Y business travellers do not seek the same program benefits as their colleagues. For example, they are more likely to use airline miles and points on free or discounted travel rather than on upgrades.

Youth hostels, an interesting alternative to traditional hotels

Youth hostels are becoming more popular among hip young business travellers – especially those on a tight budget – who don’t want to spend an entire evening alone in their room. Generator Hostels is one such chain: on certain days of the week, particularly during the off-season, nearly 20% of its guests are young business travellers.  Another example is the Fusion in Prague, which is both a hotel and youth hostel. It offers individual standard rooms and dormitory-style accommodations, as well as non-traditional meeting spaces like its 360° Lounge Bar and Playroom, which features over-sized seating attached to the wall that can also be folded up and out of the way. In addition, its social media presence enables business travellers to meet other guests with similar interests, even before their arrival.

CN_Affaires_Millenials_image2

Young business travellers are still in the process of trying out different brands to determine what appeals to them most and best corresponds to their life style and travel habits. It is the ideal time for hotels, restaurants and other tourism stakeholders to listen to them and try to meet their expectations for they are the travellers of today… and tomorrow!

Catégories
Customer segments

The growing solo travel market

Solo travellers come in all different types and the Quebec tourism industry must adapt to attract this booming clientele. Although solo tourists obviously travel alone, they often travel in groups, as contradictory as this may seem. In fact, many travel specialists (tour operators and DMOs) are noticing that solo travellers wanting to experience new places with other people who share their interests now constitute a larger proportion of their group clientele.

Single travellers are a growing market segment. More and more people are single by choice at various stages of life because of marrying later, getting divorced, losing a spouse, etc., contributing to the rise in one-person households:

  • one-person households account, on average, for 35% of all households in developed countries
  • in Finland and Norway, this average is about 40% (2011)
  • in the Netherlands, it is 37% (2011)
  • in the United States (27% in 2010) and United Kingdom (29% in 2011), the percentages are similar to that in Canada (28% in 2011)
  • in Quebec, the proportion of one-person households is 32% (2011)

Definitions, characteristics and behaviour of solo travellers

A solo traveller is, by definition, a person travelling alone… but not always! According to Statistics Canada, a person is considered to be « travelling alone » if not accompanied by another member of the same household; for example, people travelling with friends or in a group are considered solo travellers if they are unable to provide any information on the expenditures and activities of the people accompanying them.

With this in mind, researchers from the University of St. Gallen in Switzerland have identified four categories of solo travellers:

  • single-solo: live alone and travel alone
  • single-group: live alone, but travel in a group of more than six people
  • collective-solo: live in a multi-person household, but travel alone
  • collective-group: live with others, but travel without them in a group of more than six people

Here are some characteristics of these different categories (see Table 1):

  • single people travelling alone or in a group are primarily older women, while those in the other two categories are primarily young men
  • solo travellers tend to take shorter trips than other travellers, with the exception of the collective-solo category
  • preferred type of accommodation:
    • with friends or family (single-solo)
    • vacation homes (collective-solo)
    • hotels (the other two segments)
  • type of trip:
    • visits with family and friends (single-solo)
    • city and shopping trips as well as cruises and beach holidays (collective-solo)
    • sightseeing tours (single-group)
    • events and sports vacations (collective-group)
  • The two categories of solo travellers who travel in groups (collective and single) look for travel information from friends and family as well as promotional materials from tour operators

CN_Voyageur_solo_Table1_eng

More and more individual travellers are visiting Quebec

In this section, we have chosen to examine only individuals travelling alone, not in a group of any kind.

In 2010, Canadians who travelled alone in Quebec made nearly three million leisure person-trips of one or more nights, accounting for 34% of all stays. Note that Quebeckers made up 83% of these solo travellers.

Of the Americans who made a leisure trip to the province, only 13% travelled alone in 2011. Maine residents travelled alone the most often in the province, representing 20% of all lone American visitors. However, the number of potential visitors is much larger. In fact, according to the Office of Travel and Tourism Industries, 38% of the Americans who travelled overseas in 2011 for leisure and to visit family and friends did so alone.

On average, one out of five leisure visitors from the top European tourist-generating countries who visited Quebec for one or more nights in 2011 travelled alone, while among Chinese and Brazilian tourists, these visitors made up the majority, or 60%.

Finally, from 2006 to 2011, the number of solo travellers from overseas and the U.S. recorded very strong growth (21% and 55%), while total arrivals fell. This was particularly remarkable in the case of American travellers (see Table 2).

CN_Voyageur_solo_Table2_eng

Examples of market adaptation

Many tour operators such as Abercrombie & Kent, a company specialized in luxury travel and safaris, have eliminated supplements for solo travellers or reduced such fees by 50 to 75%. Other companies offer to find their solo clients a roommate and then reduce their rate by 50%.

Many cruise lines have also done away with the single supplement or reduced it for certain cabin categories — often the least expensive — or specific destinations. In 2010, Norwegian Cruise Line (NCL) was the first to offer 128 studio-style cabins for solo travellers at no extra cost on the Norwegian Epic. It also created a lounge area designed especially for solo travellers to socialize. These individual cabins have been so successful that NCL has decided to offer another 59 studios on the Norwegian Breakaway, which sets sail in May 2013.

 CN_Voyageurs_Solos_image1

Source: Norwegian Cruise Lines, Studio for solo cruise traveller

Tour operators like Singles Travel International have created a social network where solo travellers of all stripes can do things like share their interests, favourite activities and destinations visited and meet potential travel partners. Airlines such as Air Baltic, KLM and Malaysia Airlines and new applications (SeatID,

CN_Voyageurs_Solos_image2

Planely, Facebelt) enable solo travellers to select a seatmate based on their social network profile. Others, like Maiden Voyage, are a network of for female business travellers who would like to network and socialize at their destination. How will you take steps to attract this clientele?

 

Sources:

– Fox, Jena Tesse. « Travel for One » Travel Agent Central, February 15, 2012.

– Laesser, Christian, Pietro Beritelli and Thomas Bieger. « Solo travel: Explorative insights from a mature market (Switzerland), » Journal of Vacation Marketing, Vol. 15, no. 3, p. 217- 227.

– Légaré, Odile. « Perspectives démographiques 2006-2056 et logement: un aperçu » Habitation Québec; Le bulletin d’information de la Société d’habitation du Québec, Vol. 4, no. 4, Summer 2010.

– Lenhart, Maria. « Solo Travel is booming and suppliers are responding » Travelmarketreport, October 20, 2011.

– Office of Travel and Tourism Industries. « Profile of U.S. Travelers Visiting Overseas Destinations: 2011« 

– Statistics Canada. « Canadian households in 2011: Type and growth. Families, households and marital status, 2011 Census of Population » September 2012.

– Statistics Canada. « International Travel Survey » and « Travel Survey of Residents of Canada, » 2007 to 2011.

Catégories
Customer segments Facts and figures

Enough of Gen-X, Y and the Boomers; here comes the senior market

Consumer society has not always been responsive to the needs of travellers aged 60 and up. And yet, this customer segment is flourishing as the world’s ageing population creates a major demographic shift. When they are healthy and free of time constraints and financial obligations, older consumers are an ideal clientele. Now is the time to examine the characteristics and preferred leisure activities of seniors, an emerging consumer market.

At what age does one become a “senior”?

There are numerous terms to describe individuals of a “certain age”: seniors, senior citizens, Golden Agers, pensioners, retirees, the elderly. The age at which one assumes the title of “senior” varies from 55 to 65, depending on the study or statistic. To distinguish seniors from Baby Boomers (those born between 1947 and 1966), who are currently 41 to 60 years old and have already been examined by the Tourism Intelligence Network, this article will focus on drawing a portrait of those aged 60 and up. Naturally, any predictions, even short-term ones, will inevitably include some Baby Boomers as they are slowly entering this market segment, creating what some have called the “senior boom” or “senior surge.” However, the seniors of tomorrow will definitely be very different from those of today.

The silent generation

At the present time, the 60+ market segment is populated by members of the “silent generation.” Marked by the war and thus, in many respects, less spoiled than later generations, this generation can be characterized as follows:

  • instilled with a sense of duty
  • respectful of authority
  • looking for stability
  • thrifty and cautious
  • often neophytes when it comes to information and communications technologies

These are, of course, generalizations, and they apply in varying degrees, depending on the age of the individual in this cohort. For example, many 60-year-olds are familiar with or even experienced in information technology, unlike those aged 75 and up.

Quebec seniors

In Quebec alone, there were 1.5 million people aged 60 and over in 2006, or 20% of the entire population. According to the Institut de la Statistique du Québec, this number will grow to 2.27 million by 2026 to represent 28% of all Quebeckers. The Print Measurement Bureau (PMB) estimates that 621,000 Quebeckers aged 60 and up have taken an overnight vacation trip within Canada in the past 12 months, with 475,000 of these trips taken in Quebec. During the same period, 356,000 Quebec seniors travelled outside the country.

Figure 1
Percentage of Quebeckers aged 60 and up
who took at least one overnight trip in the past 12 months

Visiting friends and relatives

The preferred type of accommodation for seniors travelling in Canada is the home of friends and relatives (44%), followed by a hotel (25%); amongst the general population, the favourite accommodation is a hotel.

Figure 2

The primary activities of these travellers are visiting friends and relatives (54%) – which is higher than the percentage recorded for the entire population –, sightseeing (38%) and shopping (25%). Furthermore, the percentage of golfers is higher among seniors (7%) than it is among the overall travelling population (4%).

Figure 3

Walking, cultural activities and golf

Generally speaking, those aged 60 and up also engage in a number of leisure activities that can be easily practised when travelling: walking and biking, live theatre, classical music concerts, museum visits and golf, for example (Figure 4).

Figure 4
Percentage of Quebec seniors participating in leisure and sports activities

Destinations

The foreign destinations most often visited by Quebec seniors are listed in the following table. When compared to Quebeckers of all ages, a higher percentage of seniors have gone to Florida and Italy.

Table 1
Top destinations of Quebec seniors who have travelled outside the country in the past 3 years

The senior market also represents:
• one-third (32.5%) of all Quebec coach travellers (for trips within Canada)
• 30% of travellers who have taken a cruise in the past 3 years
• 57% of those who use travellers’ cheques
• 25% of the clientele of Quebec travel wholesalers (65 and over)

Products adapted to seniors

Some companies are targeting this booming market. At Boston travel agency Vantage Deluxe World Travel, the median customer age is 71 and trips and travel components are selected to meet the needs and desires of this clientele. For example:

  • trips are longer than average
  • itineraries are less full, meaning that sites can be visited at a leisurely pace
  • cruise ships are smaller, with spacious cabins
  • customers can travel alone or be paired with a travel companion

As the AG2R Group notes, to accommodate travelling seniors, one must provide secondary services:

  • transfers to and from airports
  • baggage transportation or even shipping bags in advance
  • especially attentive and warm receptions in hotels

Some Quebec ski resorts offer lifetime passes to those aged 70 and up. These seniors must first purchase a regular season pass, which is then automatically renewed the following year. Older skiers practise the sport with friends, who are sometimes younger, or with family members, so they bring “paying” skiers with them. They also tend to visit resorts during less busy periods.

Seniors around the world

Thanks to scientific progress, human beings are living longer, healthier lives. The age pyramid is slowly becoming inverted in most developed countries. In conclusion, here are a few facts and figures about the senior phenomenon around the world:

  • By the year 2050, more than one person out of five, or 22% of the world’s population, will be aged 60 and up, compared to only 10% today. The number of people over the age of 60 was 602 million in 2000; this number will rise to nearly 2 billion by 2050.
  • In the United States, some 37 million people are aged 65 and over, and 9.2 million of them are aged 80 and up.
  • The Americas are home to 75 million seniors (those born before 1945).
  • France was home to 200 centenarians in 1950, 3760 in 1990 and 18,962 as of January 2007. According to the Institut National de la Statistique et des Études Économiques (INSEE), this number will rise to 150,000 by 2050. France now keeps a list of “supercentenarians,” that is, those over the age of 110.
  • In the United Kingdom, recreation accounts for the largest share of household spending among seniors, more than lodging and food.
  • In the very near future, seniors will represent the largest customer segment for the travel industry.

Sources:
– Durand, Amandine. “Seniors: les agences de voyage spécialisées,” L’Internaute. [www.linternaute.com] Last accessed December 14, 2007.
– Hunter-Jones, Philippa and Adele Blackburn. “Understanding the Relationship between Holiday Taking and Self-Assessed Health: An Exploratory Study of Senior Tourism,” International Journal of Consumer Studies, Vol. 31, No. 5, September 2007.
– Institut de la statistique du Québec, 2006.
– Institut de la statistique du Québec, Si la tendance se maintient… Perspectives démographiques, Québec et régions, 2001-2051, November 2004.
– Mesmer, Philippe. “Bienvenue dans un monde senior,” Vivre en 2020, Le Monde, hors série, October 2007.
– Pak, Cabrini and Ajit Kambil. “Over 50 and Ready To Shop: Serving the Aging Consumer,” Journal of Business Strategy, 2006, Vol. 27, No. 6.
– Print Measurement Bureau, 2007.
– Seniorjournal.com. “Travel Agencies that Target Senior Citizens May Best Meet Special Travel Needs,” Senior Citizen Travel & Vacation, September 10, 2007.

Catégories
Customer segments

Spotlight on Generation Y

Although the definition can vary, the term “Generation Y” generally refers to people born between 1978 and 1989, or those aged 18 to 29. Whether you call them Echo Boomers or Generation Y, they are without doubt a major, surprisingly different, customer segment. However, does Quebec’s Generation Y travel? If so, what are its favourite activities when travelling, and in general? What is the best way to appeal to these complex new consumers weaned on technology?

Profile of the Echo Boomer market segment

In 2005, Generation Y represented 20.3% of the Quebec population 18 years and over. They account for a similar proportion of the travel market, constituting 18.8% of the province’s domestic travellers and 19.5% of its international travellers during the past year.
According to the Print Measurement Bureau (PMB), 42% of young Quebeckers in Generation Y have travelled within Canada in the past year, while the rate is 46% among the entire population aged 12 years and over (Table 1). Nearly one-third of them made at least one trip within Quebec and 10% visited Ontario.

 

Table 2 lists the most popular international destinations among Generation Y travellers in the past three years, noting the percentage of those who made at least one trip to each destination, as compared to the entire Quebec population. Though this demographic group visited the Northeast United States and France in greater numbers than did the overall Quebec population, it was not as fond of Cuba as other customer segments were.

Figure 1 illustrates the percentage of young people aged 18 to 29 who take part in certain activities while travelling in Canada, compared to the number of participants from the overall Quebec population. Members of Generation Y are more likely to practise sports activities, hiking and skiing, and engage in shopping and nightlife than other travellers. However, they are less likely to attend cultural activities like museums, art galleries and events.

Here are some more pertinent facts taken from the PMB with regard to the travel behaviour of Quebec Generation Y travellers in Canada:

  • 85% travel by car, 9% by bus and 10% by plane
  • 78% travel for only a few days, 22% for one week and only 7% for two to three weeks
  • their favourite type of accommodation is with friends and family (40%), followed by hotels (34%), motels (18%), campgrounds (18%), cottages (17%) and, rarely, B&Bs (5%)

When travelling outside the country:

  • 41% travel for a few days, 44% for one week, 27% for two to three weeks and 12% for one to two months
  • 76% travel by plane, 36% by car and 10% by bus

Other than their favourite activities while travelling, what interests this clientele? What are its favourite hobbies and leisure activities? Figure 2 illustrates the percentage of this generation that engaged in various sports and leisure activities over the past year.

Compared to the overall population, young people aged 18 to 29 have a higher participation rate in a greater number of sports and activities (cycling, dance, photography, running, canoeing, amusement parks, etc.). Nightlife is especially popular, with 46% of young people having gone out to bars in the last year.

As illustrated in Figure 3, some Quebec events are quite popular with young people in Generation Y: for example, 15% attended the Montréal International Jazz Festival last year. Other Quebec attractions are popular too, with one out of five Quebeckers aged 18 to 29 having visited La Ronde, a proportion that is twice that of the overall Quebec population.

Looking beyond the numbers

With personalities and behaviours that differ from those of preceding generations, Echo Boomers are a challenge for the companies who would like to attract them. However, they are not unreachable, and the following information may help you understand them better.

  • For this generation, travel offers a sense of accomplishment and pleasure; it is a tool of personal development, a way to discover new lands and an enriching experience, both personally and socially. Traditional sightseeing activities, guided tours and museums are not attractive to them. They prefer adventure tourism, sports tourism, the latest forms of entertainment and outdoor activities.
  • Professionally, the children of Baby Boomers do not want to be like their parents. While the latter are often workaholics, Generation Y aims for a better balance between work, family and one’s personal life. Not particularly loyal employees, these people look for work that they can be passionate about, rather than something stable and well paid. They do not like hierarchical organizations.
  • Though often big consumers, they are also savvy, experienced buyers. As a customer segment, they are demanding and hard to predict. Because they often have limited budgets and many have a high debt ratio, the quality-price ratio is key to them (they often travel with only one credit card). In addition, they are very skilled at searching the Web for the ideal destination and price. The Internet now offers tremendous information transparency and Generation Y is certainly the generation that takes full advantage of this.
  • Technology is part and parcel of their lives and the internet holds few secrets for them; they navigate easily and confidently, whether searching for information or making online reservations.
  • Unlike other customer segments, Echo Boomers are not afraid of innovation. On the contrary, they enjoy surprises, adapt quickly, and like to get off the beaten path to discover new horizons, new destinations and new activities.
  • In terms of marketing, it is vital to remember that they have been immersed in advertising since birth and, as a result, are less sensitive to it or even immune. Therefore, they can be difficult to reach through traditional media and more easily reached through the internet. However, viral marketing, search engine referencing and online public relations are more effective than conventional advertising banners. Furthermore, the advent of social networking sites like MySpace and Facebook means that marketing efforts must “listen” in order to identify, target and reach Generation Y. Members of this generation like to talk about themselves and their lives (their trips, friends, photos, etc.) on personal pages and blogs.
  • Remember that they share a lot. Thanks to social websites, cell phones, online chatting and Skype, they are instantly up to date with whatever their friends are doing, no matter where or when. This is why well-executed viral marketing campaigns can be so effective.
  • The most powerful hook for them is probably a sense of humour, or even sarcasm. Strategies that can make them (and their friends) laugh will win points. Some marketing campaigns have used humour to great effect, even with limited budgets.

In short, they are skilled negotiators, ambitious and nonchalant, and they question everything. They are also wholehearted hedonists, sensitive to the fate of the planet and keen to learn more about the world. Full of ideas, these people are inspiring.

Sources:

– Print Measurement Bureau, 2007.
– Renaud, Jean-François. « Le Web de la génération Y », Adviso, conseil + stratégies, 7 décembre 2005.
– Hira A., Nadira. « You Raised Them, Now Manage Them », Fortune, 28 mai 2007.
– « The Children of the Web », Business Week, 2 juillet 2007.
– Ramsay, Charles-Albert. « Fallait y penser: un nouvel emploi chaque semaine? », Les Affaires, 7 juillet 2007.
– Canning, Simon et Lara Sinclair. « End of the Love-in », The Australian, 20 octobre 2006.

Catégories
Customer segments Marketing @en

Familiar with tweens? You should be…

A recent development in marketing has been to define a new customer segment: « tweens » or preteens. While young people ages 9 to 14 are no longer children, they are not yet teens, either. With surprising purchasing power and influence on a variety of family decisions, they are an attractive market. Although manufacturers have recognized the potential of this market, the travel industry is just beginning to clue in. In fact, tweens now make up another type of traveller. This does not mean family vacations are a thing of the past; they have simply changed direction – to follow tweens!

What is a tween?

« Tween » is a marketing term used to describe preteens ages 9 to 14. Straddling childhood and adolescence, they have a foot in both worlds. When it comes to technology, they rule: they are online longer, adopt and master new technologies faster than adults and participate in a wider variety of online activities. In Canada, 85% of tweens have access to a computer, 82% to a video game system, 25% to an iPod or MP3 player and 16% have a cell phone (this number rises to 26% among 12 to 14 year-olds).

While their favourite medium is still television (50%), 27% of American 9 to 14 year-olds watch it on the internet. Figure 1 lists their favourite online activities.

activites_tweens

Purchasing power and influence on family decisions

Spending by tweens has doubled every decade for the past 30 years. In the US today, between spending their own money and influencing their parents’ purchasing decisions, this segment controls or influences approximately US$260 billion in spending. According to the BRANDchild study (conducted by Millward Brown among 2,000 young people ages 9 to 14 years in several countries), tweens influence 80% of their parents’ brand purchases.
Tweens2

In 2005, there were approximately 2.5 million tweens in Canada and their average annual income was CAN$1,155. This means they controlled CAN$2.9 billion of their own money in addition to influencing another CAN$20 billion in family purchases.

It is this financial power that differentiates tweens from earlier generations; never has this age group exercised such influence. The generation is populous enough to ruin a brand it does not like or catapult another to success by adopting it. The influence of tweens is particularly noticeable when it comes to choosing a restaurant, groceries and even cars, but they can also affect travel-related decisions:

  • Over 40% of young people believe they have some or a lot of influence when it comes to choosing a vacation destination.
  • Although only a small percentage of tweens feel they have a strong influence on hotel choices, 59% believe they have some influence. Also, 20% of parents say they « always or sometimes » ask for their tween’s opinion when selecting a hotel.
  • Tweens believe they influence the planning of vacation activities 55% of the time.

achat_tweens3

They may be plugged in, but do they shop online?

Surprisingly, tweens and teens are shopping online in increasing numbers, thanks to prepaid gift cards. Major companies now offer prepaid credit cards designed especially for young people. The Visa Buxx card is just one example and can be used everywhere Visa is accepted, particularly online!

Tweens5

Receptiveness to advertising

Young people in the United States, Australia and Great Britain see an average of 20,000 to 40,000 commercials per year and spend 60% more time in front of the television than at school. Two surveys conducted by The Harris Interactive Youth and Education Research Group in May 2006 offer more insight into young people’s attitudes towards advertising:

  • Tweens attach a great deal of importance to objects and brands « cool. »
  • Friends have a tremendous influence on their preferences and they want what their friends have. Their consumer choices are also influenced by advertising.
  • More than earlier generations, tweens are very receptive to celebrity-driven advertising.
  • Young people say they are most influenced by television commercials (54%), magazine ads (23%) and movie-theatre commercials (19%).
  • Advertisements for food seem to attract the most attention from tweens.

Generally speaking, marketing specialists use the strategy of treating tweens like teens. The marketing industry has forced children to grow up faster and studies show that those aged 11 and older no longer consider themselves children.

Ethical debate

There is a major debate concerning the ethics of tween-oriented marketing. By treating these young people like mature, independent consumers, advertisers are taking parents out of the decision-making process and thereby making children more susceptible to unhealthy messages about body image, sexuality, relationships and violence. This is an emotional issue that creates sharp divides. Although the tourism industry is less involved in such marketing, it is important to be aware of the issues.

Some tourism examples

In terms of the tourist experience, tweens are often too old for activities aimed at children and too young for teen and adult activities. Very few tourism-based businesses offer products specifically for tweens. However, some businesses have adapted their products for this segment.

Club Med offers two programs designed for 11 to 17 year olds: Junior Club Med, which supervises young people and organizes group activities (beach volleyball, trapeze, trampoline, sailing, inline skating, tennis, etc.), and Club Med Passworld, an exclusive new zone with special high-tech equipment. Specially-trained counsellors facilitate the discovery of new activities designed specifically for them and encourage their development and socialization.

Some Four Seasons hotels (Atlanta, New York, London, Chicago, Philadelphia and Toronto) have added a youth concierge to their service teams to deal specifically with tweens and teens. These hotels have also conducted focus groups with tweens in the aforementioned cities to identify cool things to do locally. They now have an updated idea of this clientele’s preferences and interests. These hotels also provide special amenities to this customer category, offering things like popcorn, recent magazines and films, an indoor pool, and balanced meals designed especially for them. For its part, the Ritz Carlton in South Beach, Miami, provides a tech centre for tweens and teens.

Finally, the Florida tourism portal lists activities aimed at tweens, like scuba diving, an indoor rink for roller-skating and skateboarding and water skiing.

Be among the first!

Given their economic muscle, tweens will no doubt continue to be targeted by businesses. In addition, since relatively few tourism businesses target this clientele in particular, doing so would probably provide a competitive edge. A few suggestions for reaching this market segment:

  • Carefully analyze their likes, dislikes and influences, to offer products and services tailor-made for them.
  • Speak their language: tweenspeak is the system of abbreviations, symbols, icons and numerals used for text messaging and in chat rooms. This new language enables them to communicate with each other around the world without even speaking the same language!
  • Keep wait times to a minimum. Although no longer interested in colouring, tweens still don’t have much patience.
  • Offer cool products traditionally aimed at older customers, but ensure they are closely supervised to reassure parents.

Sources:
– Business Wire. « iGillottResearch Finds Significant Opportunities for Wireless Devices in the Tween Segment, » July 22, 2005.
– De Mesa, Alycia. « Marketing and Tweens, » Business Week Online, October 12, 2005.
– eMarketer. « What Do Kids, Tweens and Teens Do Online? » www.emarketer.com, October 10, 2006.
– Lindstrom, Martin. « Branding Is No Longer Child’s Play! » Journal of Consumer Marketing, Vol. 21, No. 3, 2004.
– Martin, Suzanne. « Advertising to Youth: What Youth Want And What Advertisers Need to Know, » Trends & – Tudes, Harris Interactive, Vol. 5, No. 7, August 2006.
– Media Awareness Network. « Special Issues for Tweens and Teens, » www.media-awareness.ca.
– Shohan, Aviv and Vassilis Dalakas. « He Said, She Said, They Said: Parent’s and Children’s Assessment of Children’s Influence on Family Consumption Decisions, » Journal of Consumer Marketing, Vol. 22, No. 3, 2005.
– YTV, Corus Media. « 2002 YTV Tween Report: Special Kidfluence Edition » and « Winter 2006–YTV Kids Trend Report. »

 

Catégories
Around the world Customer segments

Loyal customers spend less than new customers

Spanish researchers have analyzed the expenditures of travellers in relation to how many times they have visited a destination. According to their findings, returning travellers spend less than first‑time visitors, primarily because of their increased knowledge of the destination. Destinations may want to consider the true economic benefits of new visitors versus loyal customers in relation to the money spent to attract them.

The advantages of loyal customers

In the tourism industry, regular customers are generally desirable for a number of reasons, in particular:

  • Marketing costs for attracting loyal customers are lower than those required to solicit new business.
  • A repeat customer usually indicates satisfaction with the product or service.
  • Customers who regularly return to a destination tend to encourage those around them to do the same.

In economic terms, destinations appreciate repeat visitors because they help stabilize market share, require lower promotional costs, and are less sensitive to price variations and potential service problems. However, another factor comes into play: returning travellers are more familiar with the destination and able to make more informed decisions when it comes to most travel expenses.

The Balearic Islands: A case study

Researchers Joaquin Alegre and Catalina Juaneda, from the University of the Balearic Islands, have attempted to analyze the relationship between consumer behaviour and repeat visits. The study looked at a sampling of German and British tourists vacationing in Spain’s Balearic Islands; many variables were analyzed, such as the number of visits to the destination and motivations like delivery quality.

In particular, the study examined the fact that first-time visitors are initially influenced by external factors, primarily the cost of the trip. Once destination quality proves to be a critical factor, high price is often seen as the best indicator of quality. As for repeat visitors, they are more motivated by factors linked directly to the destination, for example, hotel and service quality.

Not all tourists can be loyal

To clearly understand the context of repeat visits, it is important to realize that some tourism motivations run counter to destination loyalty. For example, for those who see travel as a break from routine (an opportunity for unique experiences and the discovery of new places, new people and other cultures) destination loyalty is not appealing. Travellers fitting this description would generally not be interested in revisiting a destination.

On the other hand, individuals with little tolerance for risk would feel comforted and relieved to return to the same place. This type of traveller usually seeks relaxation, comfort, a familiar environment, and a minimum of uncertainty and risk. Moreover, it takes time and effort to find and research a new destination, and money to set up new routines.

Differences observed

Why do first-time visitors spend more? Even if they have managed to compile a lot of information from travel guides or Web searches, it is very difficult to acquire intimate knowledge of local pricing realities. Given this lack of information (and more importantly, lack of first-hand experience), first-time visitors readily accept prices that may, in fact, not be considered competitive.

The study’s findings show that repeat visits to a destination have an influence on tourist expenditure patterns. The share of expenditures made in the home country of travellers who are visiting for the second or third time is 28% lower when compared to expenditures by new visitors. The difference is even more significant (32%) among tourists who are on their fourth or higher visit.

The impact of customer loyalty on consumer behaviour is even more remarkable when one looks at the amounts spent at the destination itself, during the vacation. Repeat visitors, regardless of how many times they have been, spend 40% less than first-timers.

Other motivating factors

Tourists who attach a great deal of importance to hotel quality tend to spend more on their vacations, both at home before the trip (+49%) and at the destination (+44%). People who consider the quality of their surroundings to be important also spend more, especially at the destination itself (+28%). A similar observation can be made about tourists who return to the same region, with expenditures of 17% more in the destination country.

The study findings also demonstrated the following:

  • Repeat visitors are more likely to opt for half-board lodgings, in other words, accommodations that include one or more meals.
  • Loyal tourists have a longer length of stay.
  • The more times tourists visit a destination, the more they tend to visit the same region.

Lessons learned?

A destination’s positioning should consider the proportion of new to return visitors. When a large percentage of one’s customers are not first-timers, it may be risky to promote services with a large mark-up. According to the study’s authors, increased profitability from unit sales will not be enough to compensate for an eventual decline in the number of visitors from a well-informed customer base.

Obviously, the example presented by the researchers covers only the case of the Balearic Islands (a sun destination) and is based on a restricted clientele, that of British and German tourists. However, the study’s authors conclude that their findings still apply to many destinations.

Sources:
– Alegre, Joaquin and Catalina Juaneda. « Destination Loyalty: Consumers’ Economic Behaviour, » Annals of Tourism Research, Vol. 33, No. 3, p. 684-706, 2006.
– Um, Seoho, Kaye Chon and YoungHee Ro. « Antecedents of Revisit Intention, » Annals of Tourism Research, Vol. 33, No. 4, p. 1141-1158, 2006.

Catégories
Customer segments Products and activities

More to luxury travel than meets the eye

The transition from an emphasis on the tangible to a focus on the emotional is changing the face of luxury travel. Products are evolving to include uniqueness, eccentricity and exclusivity in the travel experience. In the luxury market, authenticity is key and providers have to keep things fresh.

Without doubt, today’s luxury consumers are increasingly diversified and their behaviour has changed over time. Travel industry insiders now talk about traditional luxury versus new luxury: the former is associated with five-star hotels, posh resorts and high prices, and the latter, while still expensive, is the anti-thesis of material consumption and the desire to possess costly objects. Focused on emotions and experience, it has more to do with the manner in which one consumes luxury items.

Luxury means…

  • a spacious hotel suite, a room with a view, a penthouse, a limousine
  • an upscale brand, a place where the staff knows your name

But it also means…

  • time, space, silence, privacy
  • an emotional experience
  • getting away from daily concerns and the complexity of the world at large to a place where everything is simple and easy
  • something original, out of the ordinary, and above all…
  • exclusivity!

A diversity of experiences, from the eccentric to the unique

A luxury traveller can rent a fifty-room castle in the Scottish Highlands for a family reunion or charter a fully crewed yacht for a honeymoon in the Mediterranean. He can practice an extreme sport and look forward to a butler and spa services at the end of the day. Interested in personal development, she can learn photography, sailing, join an archaeological dig or cook with a famous chef. Consumers are pushing the envelope in their quest for what is new and exclusive. Established standards are falling by the wayside; more and more, luxury clientele want to be where the action is and optimize the self-fulfilment aspect of their experience.

The upscale travel site www.thebluefish.com offers clients the chance to become a fighter pilot for a day (Top Gun Challenge), fly over the Himalayas and see the summit of Mt. Everest, take part in a high-performance boat race from Miami to Key Largo (Poker Run), take a private jet to an exclusive golf and safari experience in South Africa, and more.

Conversely, luxury travel can also cater to a completely different set of needs: relaxation, privacy, a focus on health, personal pampering and an opportunity to experience renewal. These other needs mean that companies operating in the luxury niche have to offer a wider variety of more sophisticated products – from spas to spiritualism and from mud wraps to meditation.

At the same time, there is the desire among luxury consumers for ownership – even partial – of something like a villa, yacht or condominium on board a cruise ship. There is also the « small is beautiful » concept, where guests seek the privacy of a residence club or the ambience of a small hotel to fulfil their desire for intimacy.

Many destinations that are still considered exotic, such as South America (with Brazil at the top of the list), the Baltic states, Africa, China, the Middle East, Asia and the Pacific Rim, are attracting new customers, while established urban and resort destinations (London, Paris, Tuscany and the Côte d’Azur) are holding their own.

Soul and style now the signature of the hotel industry

Prestigious institutions in the world of luxury accommodation have recently created chains. For example, the Crillon luxury banner has the celebrated Hotel de Crillon in Paris as its flagship, while the Waldorf-Astoria has given rise to the new Waldorf-Astoria Collection. Another new chain, Capella Hotels & Resorts, has been launched under the direction of Horst Schulze, the man behind the recent success of the Ritz-Carlton.

For the past several years, celebrated architects and icons from the world of fashion and design have been developing hotels stamped with their signature style (there are hotels named Armani, Bulgari and Versace, and each of the 11 floors of the Hotel Puerta America in Madrid was designed by a famous architect). Bathrooms are getting bigger and more lavish. Many hotels are taking on local accents by using materials and décor that reflect the culture of the host country.

Customized and « tailor-made » solutions are now the order of the day. The size of a hotel is becoming a distinguishing factor because it is still quite difficult to deliver quality, personalized service in an establishment with over one hundred rooms. Long-established luxury hotels must shake off the dust if they want to attract Gen Xers (25-40 year-olds), a growing customer segment. In fact, the reputations and austerity of such hotels tend to intimidate these young consumers who are looking for a more modern image and the ease afforded by high-tech amenities.

Spa products very popular

Neil Jacobs, senior vice president-operations, Asia-Pacific, for Four Seasons Hotels, stresses that spas are now a given, just like restaurants and meeting space. Spas have become a deciding factor when selecting a place to stay. Although still in their infancy, destination spas are experiencing tremendous growth. Spas come in various forms: eco-spas, thalassotherapy spas, medi-spas, urban spas and ayurvedic spas (employing traditional Indian folk medicine), to name a few. The privacy afforded by spas, the service focus of these resorts, experienced therapists, authenticity, elegance, refinement and excellent cuisine (famous chefs) are all elements of a luxury experience.

Airline services taking off in all directions

The inconveniences of air travel (crowded airports, restrictive security measures, waiting times, deteriorating service, delays, etc.) discourage most passengers. To avoid these problems, to make every minute count, and to enjoy point-to-point travel with no transfers, many wealthy travellers are turning to various alternatives.

Air taxi services are becoming more common (e.g. Boston-Newark), offering competitive fares and reducing the delays associated with traditional airlines. A helicopter service (US Helicopter) now takes passengers between downtown Manhattan and Kennedy Airport in only eight minutes for US$160.

Rental, charter, co-ownership and ownership of jets are just some of the other options explored by wealthy customers. Growing demand has made the process easier and chartering a jet is becoming as easy as renting a car. The very latest service innovation is the membership card (which requires a large deposit) that enables the holder to subscribe for prepaid charter time at a lower hourly rate.

The new A380 airplane is redefining the notion of luxury service. Its interior can be configured to offer a bar, office, casino, gym, lounge, private sleeping area, open area so passengers can stretch their legs and, the height of luxury, showers! However, water for showers remains problematic because of the weight.

If you are in the business of luxury, it’s got to be real!

In this market segment, the « best » is standard. Although high prices remain a given, they are not the only mark of a luxury product. A number of words contribute to the perception of value: exclusivity, reputation, brand integrity, experience. The « take-care-of-me » attitude of this clientele, the desire for personalization and recognition of one’s standing all require flawless service and flexibility. Moreover, a personal butler for each guest is becoming the norm in the highest luxury bracket.

Although the luxury travel industry is booming, it is worth noting that the life cycle of a luxury product is relatively short and the concept of quality is no longer so narrowly defined. Company executives are feeling market pressure to create more diversified, authentic and unique experiences. Companies must constantly: refresh their products and embrace innovative concepts; update their products to keep them timely, modern and current; adapt products for every customer so that clients enjoy a personalized experience; and recruit exceptional staff who can deliver on the experience.

However, there is an industry trend towards one-upmanship that should be avoided. Is it necessary to offer a choice of 18 different pillows in every room? Does bottled water have to be served by a sommelier? Should customers be able to select from among 12 different pens simply to sign a restaurant bill? If a company is known for impeccable quality, customers should have total trust in the brand.

As clients in this sector become increasingly demanding, customer relations management is key to building loyalty. For this reason, providers must emphasize service quality, attention to detail (like a hand-written note) and extend their efforts both before and after the customer’s stay.

Sources:
– HotelMarketing.com. « Survey: 2006 Consumer Trends in Affluence & Luxury, » June 23, 2006.
– Smith Travel Research. « Experts Discuss Future Of Luxury Travel, » June 26, 2006.
– Travel Weekly, special issue « 2006 Consumer Trends in Affluence & Luxury, June 14, 2006:
– Chipkin, Harvey. « Hotels Indulge the ‘Give Me More’ Generation. »
– Chipkin, Harvey. « Spa-centric Hotels Part of an Evolving Trend. »
– Gebhart, Fred. « Private Jet Travel Taking Off in All Directions. »
– McDonald, Michele. « Airbus’ A380 To Send Luxury Transport Soaring. »
– Weiner Escalera, Karen. « Luxury Travel Now… And What’s Next, » [Hotel-Online.com], October 2005.
– Weiner Escalera, Karen. « Luxury Travel Now And What’s Next for 2006, » [Hotel-Online.com], March 2006.
– Weiner Escalera, Karen. « Luxury Travel Now And What’s Next III, » Smith Travel Research, May 2006.

Catégories
Customer segments Trends

Exploiting the « Gap Year Travel » niche

Although the idea of taking time off in order to travel is by no means a recent one, « gap year travel » is both a relatively new and a relatively unknown market segment. Travellers in this segment do not spend a great deal, yet nonetheless make a significant contribution to the local economy because of their length of stay. [August 10, 2006] This phenomenon has gained widespread popularity in the UK. Several primarily internet‑based organizations have capitalized on it, offering services ranging from basic travel advice to specialized travel agencies organizing the entire trip.

What does it mean?

« Gap travel » refers to a trip taken by a person who has decided to postpone or put on hold work or studies in order to satisfy his or her wanderlust. « Gap travel » first began after WWII, at a time when society looked favourably on young people discovering the globe in order to broaden their outlook and increase the possibility of achieving world peace. However, it was not until the end of the 90s that the idea of travelling before starting university became more widespread.

Three distinct segments

More recently, the gap travel concept has expanded to include other age groups, specifically successful professionals who have decided to change careers. These people often take advantage of this period of transition in order to travel. Increased acceptance of this idea in educational and professional milieus has contributed to the expansion of this kind of travel. A growing number of seniors who are both financially secure and in good health also decide to discover new horizons. People in this category were backpackers in their youth and are hence experienced travellers. There are three distinct categories of gap travellers:

  • College or high school graduates about to start university;
  • Professionals who decide to take time off from their job;
  • People who have taken early retirement but who have not yet begun any post-retirement activities (casual part-time work, volunteering, etc.).

Extent and origin of the market

Over 90% of the gap travel market consists of independent travellers who organize their own trips. The British research firm Mintel estimates that such travellers spend over CAD$10 billion on 1 million to 1.5 million trips per year worldwide. The UK has by far the most gap travellers, accounting for roughly CAD$5 billion in spending.

In terms of their impact on the local economy, their length of stay offsets the relatively low daily spending of this group of travellers. On average, gap travellers spend roughly CAD$10,000 per trip; those in mid-career tend to have deeper pockets, budgeting approximately CAD$16,000 per trip. UK gap travellers represent a mere 1% of international departures from Britain, but an astonishing 10% of total spending.

The primarily English-speaking youth segment hails mostly from the UK, Australia, New Zealand and South Africa. Approximately 230,000 British students between 18 and 24 go on this kind of trip. The Scandinavian countries, Canada and Ireland could also be potential client bases. A certain percentage of young Americans studying in the UK visits the Old World between semesters. However, unlike other nationalities (notably the British), American youth seem less inclined to travel internationally.

British mid-career gap travellers number 90,000, compared with a total of 200,000 retirees.

Destination possibilities

Australia and New Zealand are ideal destinations for this kind of trip, particularly for Europeans. A number of factors affect a destination’s appeal for gap travellers: security, visa requirements, cost of living and the chances of getting a job. Australia capitalizes on its reputation as a far-away, dream destination, boosting its competitive advantage in this area with aggressive ad campaigns. In 2005, the Australian government allocated CAD$6 million for publicizing the advantages of its Working Holiday Maker visa to attract gap travellers from abroad. It also extended the visa period from one to two years.

Asia’s combination of cultural riches and low cost of living also appeals to this kind of traveller. Must-see destinations in that part of the world include India, Thailand, Malaysia, Vietnam and Indonesia. Japan is also a favourite destination, but more as a place to work.

South America and the South Pacific, with Brazil and the Fiji Islands heading the list, are increasingly popular choices. Finally, Africa’s international aid organizations attract a great number of workers inspired by humanitarian values.

What about Canada?

Since the rules governing international visitors fall under federal jurisdiction, the Canadian government plays a crucial role in attracting this segment of travellers. Foreign Affairs and International Trade Canada has Working Holiday Programs. They offer visas to residents of the 13 eligible countries: Germany, Australia, Austria, Belgium, South Korea, Finland, France, Ireland, Japan, New Zealand, the Netherlands, Sweden and the United Kingdom. These visas enable foreigners to travel in Canada and supplement their travel funds through incidental employment, up to a maximum period of 12 months. Unfortunately, residents of the US are not eligible for this kind of visa.

At the regional level, Tremblant is an excellent example of a destination that has successfully exploited this market segment. The organization « Ski le Gap » was created in 1994, specifically targetting British outdoor enthusiasts looking for intensive downhill ski or snowboard instruction. The resort claims it provides a unique gap-year experience as well as the opportunity to gain practical qualifications. This also gives it access to a pool of qualified instructors, a significant asset for companies in this sector.

There are innumerable strategies for attracting this category of travellers, whose habits certainly do not follow any of the usual patterns. New ways of exploiting obvious affinities – such as Tremblant’s Ski le Gap program aimed at British skiers – could be explored. For example, Quebec could stimulate French interest in specific niche markets. After all, our wide-open spaces are still a powerful draw that could easily be associated with a work-travel program, specifically by the outdoor and adventure tourism sectors.

Sources:

– e-tid. Brazil Develops as Gap Year Destination, July 11, 2006.
– Hide, Will and Tom Chesshyre. « The Trip of a Lifetime Starts Here, » The Times [travel.timesonline.co.uk], June 17, 2006.
– Hotel News Resource. Gap Travel – Emerging Niche Market with 1 million to 1.5 million Trips Per Year, February 21, 2006.
– Mintel International Group. « Gap Year Travel International, » Travel & Tourism Analyst, No. 12, July 2005.
– Wignall, Alice. « Time Out, » The Guardian [travel.guardian.co.uk], August 19, 2004.

Catégories
Customer segments

Make the most of market segmentation with geomarketing

As marketing experts promote the benefits of segmentation and niche marketing, the tourism sector would do well to investigate geomarketing. This new approach classifies and geographically pinpoints population groups to both identify potential markets and determine the best ways to reach them.

There’s « geo-info »…

Although it is crucial for companies in the tourism industry to know their markets and clientele, many of them view compiling lists of client postal codes as an onerous task.`

It is, however, well worth the effort since grouping clients geographically enables companies to pinpoint their current markets. Knowing the regions and municipalities their clients come from enables marketing executives to more effectively target their advertising messages. While this time-honoured practice provides companies with information about their current client base, it does not allow them to identify and penetrate new markets – the primary basis for growth.

… and then there’s geomarketing!

Briefly, geomarketing is a marketing concept that uses geographical data to analyze consumer behaviour and expectations. The value-added factor derives from the application of location-based information, combined with segmentation.

By examining demographic, economic and sociological data through the filter of the environment in which client segments live, geomarketing enables tourism companies to make new connections between geography-based market data and client segmentation based on consumer habits.

Birds of a feather…

One of the principles of geomarketing is that people with similar tastes, values and behaviour will tend to congregate. It therefore follows that, once the company has compiled information on its customers’ lifestyle types, it can use geomarketing to identify the neighbourhoods where this type of clientele represents a significant percentage of the population.

Consumer segmentation systems by lifestyle types

The current popularity of this marketing approach has led a number of research firms to develop consumer segmentation systems by lifestyle types. Some of the more well-known ones are:

  • PRIZM CE from the Canadian company Environics Analytics, based on the PRIZM system developed by American company Claritas. This system classifies Canadians into one of 66 groups (www.environicsanalytics.ca);
  • PSYTE@ADVANTAGE, by Mapinfo Corporation and Compusearch Canada, divides the Canadian population into 65 different lifestyle segments (www.mapinfo.com);
  • FOCUS, by Quebec’s Optima Marketing, has a different approach; it divides the population along provincial and territorial lines, with 20 segments in Quebec alone (www.optimarketing.com).

Each of these companies has drawn on information from a variety of sources, such as Statistics Canada or the Print Measurement Bureau (PMB), in order to develop client segmentation systems that take into account demographic, economic and consumer data.

What can it do for you?

If your company or organization wants to try this approach, read on for a basic introduction to geomarketing:

Step 1: Find out where your clientele comes from:

  • Determine which segment(s) of your clientele you want to target by this approach (pleasure or business, summer or winter, etc.). This classification usually focuses on a number of factors: reason and frequency of visits, choice of activities, services used, average spending, etc.
  • Use postal codes to determine where the clients in each of the segments come from. Choose a research firm to create a map that represents this information visually.
  • Identify the areas (regions, cities or neighbourhoods) with a high concentration of your clients. Note absolute values as well as penetration rate (percentage of clients in terms of total population).
  • This will help you pinpoint your « success areas », i.e., those areas where your company’s clientele comes from.

Step 2: Next, identify the client lifestyle types originating in each of these success areas:

  • Find a company that specializes in geomarketing and choose a segmentation system that identifies lifestyle types by residential area.
  • Have the geomarketing specialist help you analyze each of your chosen geographical areas and identify the lifestyle types that represent the highest percentage of area residents.
  • Compare these sociodemographic descriptions (habits, interests, consumer profile) with the characteristics displayed by your clients on-site, in order to identify the lifestyle type(s) that correspond to these clientele segments.
  • This will enable you to identify the lifestyle types of your clientele – or, at least, that segment of your clientele targetted by this process.

Step 3: Find new areas where clients from the same lifestyle segment are likely to live:

  • Have the geomarketing specialist help you draw up a list of places where much of the population has a lifestyle profile similar to the one displayed by your current clientele.
  • You will obtain a list of areas (regions, cities or neighbourhoods) in which the residents are more likely to be interested in your product or service since they have the same lifestyle profile as your current clientele.

If your company plans to follow up by implementing a marketing plan, geomarketing tools can also generate the kind of information that will maximize your campaign’s effectiveness. For example:

  • Identifying the postal codes of high-potential areas means you can pinpoint the best strategies to use for mass-mailings or newspaper inserts;
  • Combining a specific aspect of a consumer profile (such as interest in a certain activity) with a list of pre-selected postal codes enables you to purchase or rent address lists for a targetted mailing;
  • Identifying the reading habits (newspapers, magazines, etc.) of your selected profiles enables you to maximize the effectiveness of your media advertising budget;
  • Identifying purchasing habits not related to travel and tourism also paves the way for the creation of non-traditional business alliances and partnerships.

Make your client database work for you

The more varied and specific kinds of information you have about your clients, the more marketing opportunities you have at your disposal. Since it is increasingly becoming both impossible and unprofitable for companies to try and reach every customer out there, it is high time they focussed on currently available client data. Geomarketing could be an interesting way for some of these companies to put that data to use.

Sources:
– Institut d’analyse géographique (ISG). Qu’est ce que geomarketing?, [www.iag.asso.fr] www.iag.asso.fr/questions/geomarketing.htm.
– Latour, Philippe. Geomarketing, vite!… mais pas trop, [www.visionarymarketing.com] visionarymarketing.com/articles/geomarketing.html.
– Niot, Carine. Géomarketing: un nouvel outil au service des entreprises, Indexel [www.indexel.net], January 3, 2002. www.indexel.net/doc.jsp?id=1341.