Report on Market Segmentation in Australia: Targeting Young Tourists

This report provides an analysis of market segmentation strategies employed in Australia, with a specific focus on attracting young tourists. The report defines market segmentation and its criteria, including distinctiveness, strengths of a destination, size, and reachability. It explores various bases of market segmentation such as psychographic, behavioristic, and demographic segmentation, highlighting how they are used to understand and target different tourist groups. The study emphasizes how Australia has positioned itself to appeal to the youth market (19-29 years), which contributes significantly to tourism revenue. The report discusses the campaign 'There's nothing like Australia' and how it has successfully targeted young people. The report concludes by highlighting the distinctiveness and large population of the youth market segment, supported by statistical evidence. References from various sources, including tourism websites and academic publications, are included to support the analysis.

MARKET SEGMENTATION 1
MARKET SEGMENTATION IN AUSTRALIA
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MARKET SEGMENTATION 2
Market segmentation in Australia
According to TrackMaven | Marketing Analytics Software (2018), market segmentation
is a marketing strategy that entails dividing a market into smaller portions according to specific
characteristics. This tactic helps marketers, in particular, to come up with customized campaigns
for each group to gain a competitive advantage in the marketplace.
Marketing segments are created following the criteria below:
1. Distinctiveness.
Here, members of a particular segment are similar to each other and anyone can distinctively
identify them from other groups. This could be group travelers or solo travelers.
2. Strengths of a destination.
Different destinations suit different tourist. This means that every type of destination will
attract a particular type of tourists. For instance, destinations with children friendly facilities are
likely to form a segment for family tourist destinations.
3. Size.
A segment may not necessarily target a big population for it to be viable. Some segments aim
at a smaller niche provided the market for particular destinations is large and lucrative.
4. Reachability.
This is the ability to communicate effectively with the destination managers and target
segments. For instance, newlyweds are likely to read weddings and marriage bulletins and
magazines. Tourism bodies and agencies should then advertise for suitable destinations in such
platforms. For every segment, there should be a channel to easily reach them.
Bases of market segmentation
They include the following:
1. Psychographic segmentation.

MARKET SEGMENTATION 3
Here, tourists can be classified into segments according to their lifestyles, personalities, and
attitude towards life. Psychographic segmentation mainly focuses on people’s purchase behavior
towards certain products. As discussed in Your Article Library (2018), people purchase new
products in the following categories:
I. Innovators. This group of the population is always open to trying new products. They are
venturesome and an easy target for new travel packages that suit them.
II. Early adopters. These are influential people with whom the average buyer/ clients check
whether a new product is legitimate. They include the media, licensing bodies and
experts. For instance, celebrities are highly used to advertise new travel destinations.
They are seen as opinion shapers who influence the perception of their followers.
III. Early majority. This group likes checks legitimacy of products before buying. They are
keen to read reviews of hyped new destinations.
IV. Late majority. They wait until a product has earned public trust.
V. Laggards. They are traditional buyers. They hold on to old things and they rarely adopt
new products.
2. Behavioristic segmentation.
People are classified according to their attitude, use, and knowledge of specific products.
This is influenced by variables like user status (regular, non-users and occasional users). The
second variable is the purchase occasion e.g. a destination may advertise itself as the perfect
holiday or hiking destination. Lastly, people purchase depending on the benefits they expect to
get. Eg. A destination that offers spa treatments and more complimentary in their packages is
likely to win more customers (LLP, 2018).
3. Demographic segmentation.
This is classifying people according to age, gender, income, education, and occupation. It is
important in identifying the right tourism destinations for each group.
This study focuses on making Australia a destination for young tourists. This is done by
providing fun-filled activities such as snorkeling, water rafting and surfing in the major
destinations.

MARKET SEGMENTATION 4
4. Benefit segmentation.
Tourists choose places, accommodation facilities or agencies based on the benefits offered.
This is very important in knowing what different types of tourists prefer. Eg. Some tourists may
prefer complimentary city tours when visiting new countries. This basis is important because it
focuses on identifying the unique customer needs. It focuses on customer satisfaction and it's
easy to use for tourism agencies or facilities penetrating the market. According to Tkaczynski,
Rundle-Tiele, and Beaumont (2009, 169-175), benefit segmentation mostly focuses on the
services offered by a marketer.
How Australia has positioned itself for market
segmentation
As analyzed by Tourism.australia.com (2018), the youth (people between 19-29 years)
contributes to 25% of the total visits in Australia and 42% of all visitor spending. This is as a
result of the campaign dubbed ‘there’s nothing like Australia’. It has been considered to be
appealing to the youth and it portrays the country as a place where young people can juggle
easily with work, studying, visiting friends and relatives as well touring the country. The youth
has then become a very viable market segment for tourism in the country.
This positioning has made the customers more specific and distinctive. With the current
public perception among the youths, most youths are now attracted to study, work and tour
Australia. This makes Australia a favorite destination for young people. With this in mind, it is
now defined as the heartthrob of activities to fascinate the youth. The beauty of Australia,
activities, and facilities are also getting tailored to suit the needs of the youth. The market
segment (youth) is now distinct and defined and has a large population. Though the figures may
change over time, this is evidence that market segmentation actually works

MARKET SEGMENTATION 5
References
Destinationnsw.com.au, (2018) Market Segments | Destination NSW. [online] Available at:
https://www.destinationnsw.com.au/tourism/facts-and-figures/market-segments [Accessed 16
Mar. 2018].
LLP, B., (2018) Meeting the needs of younger travelers - Targeting a market segment - Australia
| Australia case studies and information | Business Case Studies. [online]
Businesscasestudies.co.uk. Available at: http://businesscasestudies.co.uk/australia/targeting-a-
market-segment/meeting-the-needs-of-younger-travellers.html [Accessed 16 Mar. 2018].
Tkaczynski, A., Rundle-Tiele, S., & Beaumont, N. (2009) Segmentation: A tourism stakeholder
view. Tourism Management, 2nd edn. Pearson publishers.
Tourism.australia.com, (2018) Youth - Corporate - Tourism Australia. [online] Available at:
http://www.tourism.australia.com/en/markets-and-research/industry-sectors/youth.html
[Accessed 16 Mar. 2018].
Track Maven | Marketing Analytics Software, (2018) Market Segmentation — Definition —
Track Maven. [online] Available at: https://trackmaven.com/marketing-dictionary/market-
segmentation/ [Accessed 16 Mar. 2018].
Your Article Library, (2018) Market Segmentation: 7 Bases for Market Segmentation |
Marketing Management. [online] Available at:
http://www.yourarticlelibrary.com/marketing/marketing-management/market-segmentation-7-
bases-for-market-segmentation-marketing-management/27959 [Accessed 16 Mar. 2018].