Sephat Tours: Market Analysis & Segmentation in Tourism Sector

This report examines Sephat Tours' marketing strategies within the hospitality and tourism sector, focusing on identifying target market segments and analyzing their characteristics. It evaluates the purpose and process of market segmentation to effectively design a marketing mix for the company. The analysis includes demographic, psychological, and geographic segmentation, tailored to meet diverse customer needs. The report further explores Sephat Tours' market analysis, highlighting market needs, trends, and competitive advantages, particularly in the context of Botswana's tourism industry. A SWOT analysis is conducted to assess the company's strengths, weaknesses, opportunities, and threats, providing a comprehensive overview of its strategic position. The report emphasizes the importance of leveraging mobile services, establishing relationships with travel agencies and hotels, and utilizing online platforms to enhance customer experience and expand market reach. Ultimately, it aims to guide Sephat Tours in optimizing its marketing efforts and achieving sustainable growth in the competitive tourism landscape. Desklib provides access to similar solved assignments.

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Executive summary
Tourism sector has endured a rapid growth and development of unsurpassed nature for many
years. This is mainly because of the dawn of ‘’borderless’’ and the advancement of
information dissemination concerning majestic scenarios that exist in the world with no
exception of southern African region.
The company is on blink of piercing a lucrative market in the fast growing industry. The
current trend on the road to increasing the number of tourist that enters the country reflects an
opportunity for the organization to penetrate the market.
The purpose of writing this report is to identify different market segment that Sephat Tours
targets, and provide analysis for the particular characteristics of the target market. The report
will also evaluate the purpose and process of market segmentation that will assist the
company to successfully design a marketing mix.
I will propose and provide analysis of Sephat Tours for a specific segmentation and explain
how they satisfy the need of the specific targeted segments. I will thereafter conduct a
SWOT analysis for the organization and conclude the report.

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Table of Contents
1.0 Introduction.....................................................................................................................4
2.0 Market segments targeted by Sephat....................................................................................4
3.0 Purpose and process of market segmentation to successfully design of marketing
mix 5
Purpose of market segmentation................................................................................................5
Breaking down large number of audience..............................................................................5
Creation of target market........................................................................................................5
To reduce waste......................................................................................................................5
Focused message....................................................................................................................5
process of market segmentation.................................................................................................5
I. Determining the wants of the segments..........................................................................5
II. Identifying the segment...................................................................................................5
III. Identify the most attractive segment............................................................................6
IV. Determining if the segment is giving profit................................................................6
V. Positioning for the segment.............................................................................................6
VI. Expanding the Segment...............................................................................................6
VII. Incorporating the segmentation into your marketing strategy.....................................6
4.0 Sephat market analysis.........................................................................................................6
5. 0 Swot analysis.......................................................................................................................7
6.1 Strengths...........................................................................................................................7
6.2 weaknesses.......................................................................................................................7
6.3 opportunities.....................................................................................................................7
4.4 Threats..............................................................................................................................8
5.0 Concussion...........................................................................................................................8
7.0 references.............................................................................................................................9

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1.0 Introduction
Sephat Tours needs to provide groups as well as individual travel so as to leisure clients.
Products and services by Sephat Tours include custom packages, travel consultations, pre-
arranged tours among other related services. For the company to grow it is important for the
company to expand the quality of services offered and to apply a good marketing strategy.
The company should also add leverages through establishment of various representations and
relationships (Kevork & Vrechopoulos, 2009).
The organization is a privately owned limited company that is united by Companies
Registrar. It is solely owned by Botswana Film.
2.0 Market segments targeted by Sephat
There are four market segments that would be targeted by Sephat Tours. Since there is
increase of tourism with wider preferences and the availability of competitive options,
more segmentation would be very critical for the marketing plan of the organization. The
company should in fact launch products while keeping in mind the segmentation.
There are ways in which Sephat Tours tourism can satisfy the customer needs. Though,
for the company to decide their wants, needs and demand, it must do segmentation first.
To carry out segmentation the first step is to define the type of customer that will prefer
the company products. Obviously, the customer will be from the targeted segment. Who
would need the products and if they would be from the company’s targeted segment. Who
would need the product and if its falls in the wants segments. Once the company have
decide on the products and services it will offer, then it will decide on the segmentation to
use (Hua, 2016).
The following are the type of segmentation that would be applied by Sephat:

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 Demographic segmentation
Demographic segmentation would have the following variables
I. Age - The product and services offered will be according to the age of the
customers
II. Gender - Services that would be offered to male would not be the same as that of
women
III. Buying behaviour- Some customers would like to spend while others would spend
little, classifying them accordingly will be an advantage to the company#
IV. Nationality
V. Income – Income of tourism will differ in many ways, it is important for the
company to segment markets according to the income because it affects the
buying behaviour
 Psychological segmentation
This type of segmentation uses the life style of people, their interest, there activities or
opinions. Application of psychological segmentation would be advantageous to the
company because it will cover the lifestyles of people.
 Geographic segmentation
This type of segmentation will divide people in the basis of geography where they are
located .For example people who reside in municipal areas will need RO purifier for
water whereas those found in the municipal areas will need UV purifiers. Therefore
the need will vary according to the customer location (Gursoy, Kiliç, Öztüren &
Rezapouraghdam, 2018.).

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2.1 Target market segmentation strategy
The company’s market strategy will be based on provision of the right services to the
selected target market. The company would need to ensure that the prices that would
be set would be set would consider the people’s budget and consider the organization
as well. The marketing strategy that would be adopted should covey a sense of quality
to our potential customers in every publication, every promotion and every picture.
Our main purpose will be to target groups and individuals that are looking for areas to
visit and leisure activities. The company will need to focus its marketing message and
its service offerings. We will need to service offerings and marketing message (Ryan,
2015).
2.1.1 Market needs
Although the tourist sector has gone through a rapid growth over the last few years, most of
the terrorist that enters the sector have gone to the North where Okavango Delta and a
national park is located and other points of attraction sites. Very few companies have focused
on central and south Botswana. Having this in mind, we need to exploit the unreached market
in the area so as to provide our clients with good services and help us realize our core
business objectives (Cho, Woods, Jang, Erdem, 2009).
2.1.2 Market trends
Although there is uncertainty that surround this type of industry, there is one fact
‘tourism is there to stay’. The only thing we need to ask is the extend at which the tourism
industry will reach and whether it will sustain or exceed the growth rate. As the size of the

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market expand , the Sephat Tours strongly trust and believe that the travel will be a crucial
element of the market place.
The statistics for tourism show an unfailing to the market size. The latest tourism statistics
done in the year 1998 was a total of 1351798 which represents 12.5% increase from 1997.
2.1.3 Analysis of business
Potentially Botswana is one of the richest countries in natural resource. The industry of
tourism is increasingly becoming an importantly player in the current economy and may in
future be more treasured than the mineral resources in terms of revenue generation. Having
this knowledge in mind the company need to provide mobile services that are directed to
tourist so as to contribute to the role of tourist industry developments.
2.1.4 Service distribution
Mobile operations like that of Sephat Tours are mainly promoted orally and through referral
with previous experience and relationships being an important factor. Relations means the
establishments of links with travel agencies, hotel and lodges who usually contact with the
company’s target customers. The experience which our customers will have on us will help in
influencing them to refer their friends to be our customers. To enhance this the company need
to provide a comfortable and luxurious experience that would be unforgettable to them. This
will make the customers to share a good word about the company.
The company should also thing of connecting the company to World Wide Web that will
enable it to market the product and services on the internet and also to enable customers to do
Pre-booking on the Web. This will make will help our customers to save on money and time.
It will also assist in widening the catchment area for our customers.

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2.1.5 The buying patterns and competition
The crucial element in the utilization of service decisions that are made at client level of the
company is the reputation trust and the firm reliability. The most vital part factor in this kind
of market will be the places of outing and the quality of service. The interests of groups and
individuals should be considered because the customers always intend to see as many places
as possible. The nature of our company’s service dictates that our pricing will vary according
to distance because clients decide to tour different within a specific time frames.
3.0 Purpose and process of market segmentation to successfully design of marketing
mix
Purpose of market segmentation
Segmentation is a technique that would be used to reduce a large market into a narrowly
define market group. There are a number of strategies that can be used to identify type of
market segmentation. This process of classifying and targeting the distinct segments of the
customers has got important benefits in promotion. The purpose of market segmentation are
as follows: (Huerta, Muñoz,Ríos & Ruiz, 2017).
Breaking down large number of audience
Markers recognize the peoples’ feedback through communication. The more tourist the
company will try to send a message to, the more the company will have vulnerable to
miscommunication, complete avoidance and inattention. By segmenting the customers into
small groups with similar traits, the company will be able to disseminate information to a
manageable group.
Creation of target market
Once the potential segments have been identified, the company will need to decide the
market to target using a specific marketing campaign. By defining the market segments the

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company will need to figure out the type of media that is used mostly by its audience. It is
also necessary to figure out types of messages to use and the budget that would be required
(Wang, Cole & Chancellor,2016).
To reduce waste
Another purpose of segmentation is to help in reducing wastage. While advertising wastage
would be realized when the ads sent for the product or service have no interest or wants to
their target consumers.
Focused message
The major purpose of segmentation is to focus the message. In some other cases, a product
would be used in many ways and may offer multiple benefits which will appeal different
methods to different customers.
Process of market segmentation
I. Determining the wants of the segments -This first stage involves finding out what the
customer needs are. Customers are grouped based on their needs, placing the ones with
similar desires together. The idea is to implement a classification strategy based on the
consumption of the consumers or clients. That is, what would each of the company’s
client like to have? In this case, Sephat Tours Company may identify certain needs by
their consumers such as; the need of a touring company that offers tours around the city
allowing tourists to explore the city’s spectacular culture and history (Venter, Wright &
Dibb, 2015).
II. Identifying the segment-The second stage of market segmentation involves narrowing
down to the particular clients that the company targets based on the needs identified from
the previous step. The “who” we want is stipulated in this phase. Sephat Tours for

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example could identify previous clients who have toured other parts of the country as
their target consumers to tour the city. This may be attributed by their desire to learn more
about the country.
III. Identify the most attractive segment-The step that follows next approaches the targeting
level as a company selects the most attractive segment for them. Out of the segments
identified, some will have to be left out if they seem unprofitable after analysis.
Competition is a primary factor while considering the attractiveness of a segment. If a
consumer segment appears to be highly competitive, then it is best to leave it out as it is
not attractive at all. Sephat Tours will need to pick customer segments that are highly
demanded and with minimum expenditure to meet their needs (Plank, 2015).
IV. Determining if the segment is giving profit- After determining the different types of
segmentation, the next step is determining the segments that are most profitable. This is
another phase that narrows down further the target consumers in the segmentation
process. For example, Sephat Tours may identify the consumer segment that is mostly
demanded but may be costly in implementing reducing their profits. On the other hand,
the most profitable package in their tours may not be on high demand (Cross & Belich,
Rudelius, 2015).
V. Positioning for the segment- Positioning the products in the mind of consumers is the step
which follows next after determining the most profitable segments. Basically, the
company requires to assign a value for their products. If the company wishes consumers
to purchase their products, then they will need to determine the value that the consumers
get from buying their products. In the case of Sephat Tours, Consumers’ mind-sets on the
company’s brand and products based on their experience after acquiring their service will
be determined by how the company position their segments’ mind-sets.

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VI. Expanding the Segment- All segments should allow for expansion. Once the company
identifies a suitable consumer segment, it should be able to grow in scalability in terms of
business. If the segment is very niche, the business will come to an end in due time.
Sephat Tours hence needs to research on ways to improve their profitable segments
identified to ensure they accommodate more consumers and runs for long periods without
being irrelevant.
VII. Incorporating the segmentation into your marketing strategy- After identifying the
consumer segment that is expandable and profitable, the final step is implementing it in
the marketing strategy of the company. This involves adding or adjusting the existing
consumer segments to include the new venture. For Sephat Tours, incorporating new
touring packages may need the management of the company to do away with previous
ventures to be able to meet the needs of the new customer segment.
4.0 Sephat market analysis
Since the company today is experiencing a fast growth of incomparable nature due to
macroeconomic policies and the reduction of foreign exchange regulations towards enticing
foreign investors. The fiscal and monetary policies would be geared towards upholding
growth with social fairness that will highly contribute to the growth of the company
(Schuckert, Liu & Law, 2015).
The current emphasis and drive by the government of diversifying the industrial base far from
minerals sector reflects an opportunity towards the achievements of this goal. Having carried
out comprehensive and thorough research on the market of this company, I realized that there
is need for a company to transport tourist that will focus on providing vacation trips to tourist.
Although mobile operators are currently in the market, I believe that there is a need for a

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market that provides enjoyable and comfortable transportation services to visitors and
tourists. This is also a consideration of the fact that Botswana is potentially rich in natural
resources. The industry of tourism is becoming very crucial in the economy and may even
prove valuable in future than the mineral resources in terms of revenue (Leung, Xue & Bai,
2015).
The company need to be aware of the fact that operating in this sector depend highly on good
networking , the will need to establish strategic and networks associations with various travel
agents, hotels, travel agents and lodges in order to ensure that the company has consistent
flow of clients. Though, for the company to do that, the company will need to ensure that the
services provided to their clients is high quality and ensure that the client is comfortable. Our
target share would be 20% of the market and we need to focus mainly on Southern Botswana
and Gaborone area.
We will appreciate to enter such market, but we need to understand that it isn’t ‘bed of rose’
and the company will need to establish string links with a number of strategic partners. Hence
the company will need to implement a very aggressive market strategy that should be
supported very well by business functions.
Keeping the comfort of tourists to be a priority, the company would be designed and
maintained as per the expectations and standards of the customer. There is need to offer
facilities such as churches, schools and sports among other activities. The company intends to
offer the following services: (Xu & Gursoy, 2015)
 City Tour- This will be a guided tour in the city centre that goes along: Finance Mall,
The National Museum, The City council Library, The House of parliament among
others. This would be appealing to the tourists. Included in the services above would

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be refreshments and information wallets containing the Gaborone history and the
main sites. The tour covers an area of nearly 50 kilometres (Ramanathan,2010.).
 Cultural tour- This is the combination of city centre tour and the cultural tour it will
be marketed as Total Package which will enable tourist to appreciate the life style of
Botswana. This package would involve guided tour, information folder, picnic lunch
and refreshments (Rate, Ballantyne, Kerr & Moutinho, 2017.).
5. 0 Swot analysis
The company intends to enter a lucrative market in the fast growing economy. The company
needs to foresee its strength in providing services to the tourists if it is looking forward to
penetrating the market, the following is the summary of strengths, weakness, opportunities
and threats for Sephat Tours (Law, Buhalis & Cobanoglu, 2014.).
6.1 Strengths
 Diversification of client base- This will assist the company in reducing dependency
on one market.
 Combination of employees skills- The company director intends to engage very
qualified and experienced employees to develop strategy and long-term plans for
business with the main intention of attaining the objectives of the company.
 Robust advertising and marketing- The Company will carry out broad advertising and
marketing that will promote both the name and product/services awareness. Hence a
focused and aggressive promotion campaign with clear strategies and goals will be
our mainstays.

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6.2 weaknesses
 Lack of reputation when compared to our competitors. This is because of the fact that
our company is still new in the market.
 The introduction of new personnel and new practices in the organization is a
challenge to an organization
 The company has a limited base of finance when compared to other players in the
industry
 The company does not have clear strategies.
6.3 opportunities
 The plans by the government to encourage the participation of local
entrepreneurship sector is an opportunity to the Company which it will fully utilize.
 Currently reliable transportation organization to take care of tourist does not exist
 The trend of international tourist shows that nowadays most travellers need more
heartening experience than what ‘’sun and sea’’ provides.
4.4 Threats
 The current growth in the tourism sector may result to an increase in the number of
organizations entering the market. This will lead high competition that comes from
variety of emerging firms in the tourism sector
 Established transport agencies, lodges and hotels will look at the growth of new
lines and to integrate transportation to provide extra services to the customers.
5.0 Concussion

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The key to success for Sephat Tours would be very effective market segmentation via
identification of many niche implementation and market strategies. For the company to
increase sales, I recommend it to implement advertising, direct marketing and personnel
selling to the targeted market that has been identified in the report. The company’s marketing
strategies will revolve around keeping in touch with travel and hotels consumers. The
company would need to concentrate very well in advertising in order to achieve its key
success factors.

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7.0 references
Bai, B., 2015. Internet marketing research in hospitality and tourism: a review and journal
preferences. International Journal of Contemporary Hospitality Management, 27(7),
pp.1556-1572.
Cho, S., Woods, R.H., Jang, S.S. and Erdem, M., 2009. Measuring the impact of human
resource management practices on hospitality firms’ performances. International Journal of
Hospitality Management, 25(2), pp.262-27
Cross, J.C., Belich, T.J. and Rudelius, W., 2015. How marketing managers use market
segmentation: An exploratory study. In Proceedings of the 1990 Academy of Marketing
Science (AMS) Annual Conference (pp. 531-536). Springer, Cham.
Gursoy, D., Kiliç, H., Öztüren, A. and Rezapouraghdam, H., 2018. The 7th Advances in
Hospitality and Tourism Marketing and Management: 10–15 July 2017, Famagusta,
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Hua, N., 2016. E-commerce performance in hospitality and tourism. International Journal of
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Huang, L., 2008. Strategic orientation and performance measurement model in Taiwan's
travel agencies. The Service Industries Journal, 28(10), pp.1357-1383.
Huerta-Muñoz, D.L., Ríos-Mercado, R.Z. and Ruiz, R., 2017. An iterated greedy heuristic for
a market segmentation problem with multiple attributes. European Journal of Operational
Research, 261(1), pp.75-87.

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Kevork, E.K. and Vrechopoulos, A.P., 2009. CRM literature: conceptual and functional
insights by keyword analysis. Marketing Intelligence & Planning, 27(1), pp.48-85.
Law, R., Buhalis, D. and Cobanoglu, C., 2014. Progress on information and communication
technologies in hospitality and tourism. International Journal of Contemporary Hospitality
Management, 26(5), pp.727-750.
Leung, X.Y., Xue, L. and Bai, B., 2015. Internet marketing research in hospitality and
tourism: a review and journal preferences. International Journal of Contemporary
Hospitality Management, 27(7), pp.1556-1572.
Plank, R.E., 2015. Conceptualizing the International Industrial Market Segmentation
Problem. In Proceedings of the 1985 Academy of Marketing Science (AMS) Annual
Conference(pp. 58-62). Springer, Cham.
Ramanathan, R., 2010. E-commerce success criteria: determining which criteria count
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Rate, S., Ballantyne, R., Kerr, F. and Moutinho, L., 2017. Marketing communications in
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Handbook of Consumer Behaviour in Hospitality and Tourism(pp. 387-395). Routledge.
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Schuckert, M., Liu, X. and Law, R., 2015. Hospitality and tourism online reviews: Recent
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Venter, P., Wright, A. and Dibb, S., 2015. Performing market segmentation: a performative
perspective. Journal of Marketing Management, 31(1-2), pp.62-83.

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Wang, W., Cole, S.T. and Chancellor, C., 2016. Profiling Rural Festival Visitors by Previous
Visits, Purpose of Travel, and Activities: A Multi-Segmentation Approach.
Xu, X. and Gursoy, D., 2015. Influence of sustainable hospitality supply chain management
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