Segmentation Based on Shangrila

Topic: ArtDesign
Sample donated:
Last updated: May 22, 2019

Similarly, product positioning is an important element of a marketing. Product positioning is the process marketers use to determine how to best communicate their products’ attributes to their target customers based on customer needs, competitive pressures, available communication channels and carefully crafted key messages. Effective product positioning ensures that marketing messages resonate with target consumers and compel them to take action.

Even companies, who have mass marketing phenomena, are now adopting this new world’s strategy i. . segmentation. The purpose of segmentation is the concentration of marketing energy and force on subdividing to gain a competitive advantage within the segment.

We Will Write a Custom Essay Specifically
For You For Only $13.90/page!

order now

It’s analogous to the military principle of concentration of force to overwhelm energy. Concentration of marketing energy is the essence of all marketing strategies and market segmentation is the conceptual tool to help in achieving this focus. The marketer must try to understand the target market’s needs, wants, and demands. Need can be described as basic human requirements.People need food, air, water, clothing, and entertainment. These needs become wants when they are directed to specific objects that might satisfy the need. An American needs food but wants hamburger, French fries and a soft drink. Wants are shaped by one’s society (Kotler, 2000).

. Strategically, the business must be centered on the customers more than the products. Although good and quality products are also essential, the buying public still has their personal preferences. If an organisation targets more of their needs, they will come back again and again and even bring along recruits.On the other hand, if an organisation push more on the product and disregard their wants and the benefits they can get, the organisation would potentially lose customers in no time.

Unfortunately, getting them back would be the hardest part. Segementation: The process of dividing a market into meaningful, relatively similar, identifiable segments or groups 1. 0 Introduction: Marketing is a very important aspect in business since it contributes greatly to the success of organizations. Production and distribution depend largely on marketing. Marketing covers advertising, promotions, public relations, and sales.It is a process of introducing and promoting the product or service into the appropriate market(s) and encourages sales from the buying public. Since the goal of marketing is to make the product or service widely known and recognized to the market, marketers must be creative in their marketing activities.

Today where the world is being recognized as global village marketing has become vital ingredient for every business success. It is almost become difficult to every competitor to survive in market for a prolonged period because competition is cut to throat. Change or die is the core faith of marketing.Therefore, marketing has powerful potential to contribute to the highly important aspects of the organisational competitiveness, namely innovation (Kerin, 1992) and competitive analysis (Varadarajan, 1992). Effective marketing strategies or marketing campaigns often consist of a combination of several marketing tactics that work together in a synergistic way to establish brand, reduce sales resistance, and create interest and desire for products and/or services.

Therefore, carrying out market segmentation, targeting and positioning are important elements of successful marketing.This means that the business will need to develop an appropriate marketing mix for each segment. Market segmentation enables a business to: • accurately defi ne its markets; • position products and services to match the demands of particular markets and segments; • identify gaps in the market that it could fi ll; • make more effi cient use of its marketing resources. According to Cartwright (2002), need is something that people cannot do without a want, is the method by which people would like the need to be satisfied.Demands are wants for specific products backed by an ability to pay (Kotler, 2000).

Hence, market is to divide into groups of consumers or segments with distinct needs and wants. Doing the detailed understanding of the marketplace into strategic decisions and the targeting of appropriate customer groups. This targeting should emphasise on any differential advantages and adopt a suitable positioning within the target segments (Dibb and Simkin, 1996). This strategy of dividing the market in homogenous group is known as segmentation. BackgroundBandos Island Resort (hereafter BIR) established since 10th December 1972, located approximately 8 kilometers from the international airport and capital of Maldives, is one the best resorts among the 86 resorts of the Maldivian Tourism Industry (Ministry of Tourism, 2002). BIR has a comprehensive range of facilities such as accommodation, restaurants, recreational facilities and trained workforce to serve more than 450 guests at any one time and well-equipped Dive School and convention facilities (Bandos, 2002).

The major markets are from China, Italy, United Kingdom, Germany and Japan.Purchases for operation of the resort are supplied from local suppliers and various suppliers from Singapore, Sri Lanka and UAE (Bandos, 2002) (see Appendix – 1A). Despite the speedy recovery by year 2000 from the impacts of Asia economic crisis since mid 1997 and the German economic slowdown since the East Germany and West Germany reunification inflammation and the El Nino effects in 1998, BIR experienced turbulent times due to world economic slowdown as a result of increased international terrorism activities and war on terror since September 11th terrorist attack on USA (Amir, 2003).Addition to the impacts of the global economic downturn, BIR faced major difficulties in year 2001 in their financial performance due to mismanagement within the resort (Waheed, 2003). With the remedial action to recover from the financial difficulties, the implementation of measures such as downsizing of workforce from 491 employees to 410 employees (Shareef, 2004), effective cost controlling, improved marketing strategies to improve the sales revenue, put firmly in place at the beginning of 2002, resulted in the end of a promising financial year in 2002. 2. Types of segmentations adopted by BandosThrough market segmentation, organisations divide large, heterogeneous markets into smaller segments that can be reached more efficiently and effectively with products and services that match their unique needs Kotler et al (2006). Therefore, market segmentation can be defined as the process of dividing a market into distinct groups of buyers with different needs, characteristics, or behaviour that might require separate products or marketing programs.

Hence geographic, demographic, psychographic and behavioural segmentation are most commonly used in the …………………….. .BIR enters in new markets serving a single segment, and when this proves successful than they add more segments (Bandos, 2012). Most importantly, BIR segments their market by geographically selecting locations where outbound holidays to tropical destinations have greater advantages available. Furthermore, BIR targets at demographic segmentation to target at honeymooners, families with children and recreational travelers within the geographic segmentation adopted by them. Kotler (1984) has identified four requirements that a marketer can use in evaluating the desirability of potential market segments, namely easureability, accessibility, substantiality and actionability. Once a segment has been identified which meets these requirements, it is possible to develop a product or service which meets the unfulfilled needs of this segment.

While BIR targets mainly on five nationalities, Germans, Italians, British, Chinese and Japanese (Bandos, 2012), known as consistent and most prominent markets even for the entire Maldives Tourism Industry for several years, facilities such as childcare, convention centre and dive school in Bandos have been important contributors of BIR’s demographic segment.Pickton and Broderick (2005: 376) argue that a company can target one or more areas and must be aware of the fact that data according to geographic segmentation may vary due to population shift. [pic] 2. 1. 1. Geographical Segmentation According to Pickton and Broderick (2005), geographic segmentation divides customers into segments based on geographical areas such as nations, states, regions, countries, cities or neighborhoods. BIR segments consumers by their nationality.

Source: Sales and Marketing Department, Bandos Island Resort.It is important to segment according to geographic, due to the fact that the purchasing behaviour of the customers are influenced on where they live, work etc. (Gunter and Furnham, 1992: 5). Hence, BIR customizes their product, advertising, promotion and sales efforts to fit the needs of the geographical variables. The geographic segmentation is very useful when there are differences in a location where a product is marketed.

The differences can be caused by cultural factors, traditions, politics etc. Furthermore, the differences can be significant in one segment, whereas in other segments the differences can e minor and less significant. (Gunter and Furnham, 1992: 5) Furthermore as a result of an increase in the globalisation today the geographic segmentation has been linked to other differences in socio-economic and demographic characteristics.

The result of this type of segmentation is referred to as geodemographics (Gunter and Furnham, 1992: 7). The geodemographic segmentation combines the geographic segmentation with the demographic segmentation and thereby combines the study of the target customers with where they live (Pickton and Broderick, 2005: 376).Hence the geodemographic classifies the customers according to where they live in comparison to the way the social class defines consumers by their occupation and thereby the companies are more capable of predicting consumer behaviour (Gunter and Furnham, 1992: 7).

2. 2. Characteristics of geographical segmentation adopted by BIR 2. 2. 1.

German market 2. 2. 2. Italian market 2. 2.

3. British market 2. 2. 4. Japanese market 2. 2. 5.

Chinese market 2. 3 Positioning adopted by BIROnce the company has decided which market segments to enter it should decide what positions it wants to occupy in those segments. Market Positioning is arranging for a product to occupy clear, distinctive, and desirable place relative to competing products in the minds of target customers. A products position is the place that the product occupies relative to competitors in consumers minds. Here in this case the Starbucks has developed a unique market position for their products because if a product is to be exactly same like the others on the market than consumers would have no reason to uy it. Starbucks has positioned themselves in the market as a highly reputed brand (Kotler and Armstrong, 2006). In this case Starbucks has planned his positioning in such a way that it distinguish their products from competing brands and give them the greatest strategic advantage in their target markets.

Starbucks has a descriptively simple statement to inspire and nurture the human spirit-“one person, one cup, and one neighbourhood at a time”. Starbucks positioning strategy was customer base so that it can give the best service more than what the customers expect.Starbucks has gained a competitive advantage over customer satisfaction and employee satisfaction as Starbucks had developed its positioning strategy based on the customer and provided the utmost facility in terms of layout, furniture to the music, and in terms of employee satisfaction Starbucks make employee as a partners and gave them a personal security with a freedom to participate in the every decision of the business and make it successful (Porter ; Miller, 1985, Porter, 1998). Behavioral segmentation divides the target customers into segments based on their attitude towards a product.By doing so the marketers will have a better understanding of their target audience and thereby make their marketing more effective (Gunter ; Furnham, 1992).

Since, BIR is famous for scuba diving and convention facilities, the 2. 1. 1 Behavioural segmentation REFERENCES 1. AMIR, I. , (2002), Marketing Plan of Bandos Island Resort. , Sales and Marketing Department of Bandos, January 2002. 2.

AMIR, I. , (2003), Informal interview with the General Manager of Bandos Island Resort, December 2003. 3. AMIR, I. , (2003), Marketing Plan of Bandos Island Resort. , Sales and Marketing Department of Bandos, Janaury 2003.

. BANDOS, (2002), Bandos 30th Anniversary Special Publication, Novelty Printers ; Publishers Pvt Ltd, Maldives. 5.

BLYTON, P. , and MORRIS, J. , (1992), ‘H. R. M. and the limits of flexibility’ Reassessing Human Resource Management, TORRINGTON, D.

, AND HALL, L. , (1998), Human Resource Management, 4th Ed. , Prentice Hall Europe. 6. DIRECTORATE-GENERAL FOR ECONOMIC AND FINANCIAL AFFAIRS, (2003), European Economy: 2002 review, European Commission.

Vol. 0379-0991, No. 6, pp. 01-106. 7. FASEEH, I.

, (2004), interview with the Training Manager of Bandos Island Resort, March 2004. 8. FAZEEL, N.

(2004), interview with the Director of Ministry of Trade of Maldives, April 2004. 9. FRANGIALLI, F. , (2002), Speech by the Secretary-General of World Tourism Organisation at the European Tourism Forum, Brussels, Belgium, 10th December 2002.

10. FRIDGEN, J. D. , (1996), Dimensions of Tourism. , Educational Institute of the American Hotel ; Motel Association, Unite States of America. 11.

GUEST, D. E. , (1987), Human Resource management and industrial relations. Journal of Management studies.

Vol. 24, No. 5, pp.

503-521. 12. HOLDEN, L. , AND BEARDWELL, I. , (2001), Human Resource Management : a contemporary approach, 3rd Ed. Pearson Education Limited, United Kingdom. 13. HOLLOWAY, J.

C. , (1998), The Business of Tourism, 5th Ed. , Adisson Wesley Longman Limited, New York. 14. HOOK, C. , AND FOOT, M. , (1999), Introduction to Human Resource Management, 2nd Ed.

, Addison Wesley Longman Limited, England. 15. HOUSELID, M. , (1995), The impact of human resource management practices on turnover, productivity and corporate financial performance.

Academy of Management Journal, Vol. 38, No. 3, pp. 635-672. 16. JOHNSTON, R.

, AND CLARK, G. , (2001), Service Operations Management, Harlow, Pearson Education Limited 2001. 7. LIM, L. , (1997), Global Implications of Southeast Asia’s Currency Crisis. Journal of International Institute, Vol. 5, No.

2, pp. 1-6. 18. MALDIVES MONETARY AUTHORITY. , (2003), Maldives Economic Research and Statistics.

Economic Bulletin Maldives, Vol. 8, No. 1, pp1-27. 19. MCCOSKER, P. , (2001), “A review of ratio analysis: How the calculations of a few simple ratios can greatly improve our understanding of a business and its financial performance (Part 2)”, CIMA Financial Accountant, Chartered Institute of Management Accountants, England, December 2001.


C. , (2002), “Organization design: the continuing influence of information technology”, Management Decision, Vol. 40, No. 6, pp. 620-627. 21. MINISTRY OF HOME AFFAIRS HOUSING AND ENVIRONMENT. , (2002), National Assessment Resport : Progress towards Sustainable Development from Rio 1992 to Johannesburg 2002.

22. MINISTRY OF PLANNING AND NATIONAL DEVELOPMENT. , (1998), Statistical Year Book of Maldives 1998. , Novelty Printers and Publishers, Maldives.

23. MINISTRY OF PLANNING AND NATIONAL DEVELOPMENT. (2001), Statistical Year Book of Maldives 2001.

, Loamaafaanu Print, Maldives. 24. MINISTRY OF PLANNING AND NATIONAL DEVELOPMENT. , (2002), Statistical Year Book of Maldives 2002. , Print Image (PVT) Ltd, Maldives. 25. MINISTRY OF PLANNING AND NATIONAL DEVELOPMENT.

, (2003), Statistical Year Book of Maldives 2003. , Loamaafaanu Print, Maldives. 26.

MINISTRY OF TOURISM, (2002), “Tourism Statistics 2002”, Ministry of Tourism, Maldives. 27. MINISTRY OF TOURISM, (2002), “Tourism Statistics 2002”, Ministry of Tourism, Maldives. 28.MINISTRY OF TOURISM, (2003), “Tourism Statistics 2003”, Ministry of Tourism, Maldives. 29.

POON, A. , (1993), Tourism, Technology and Comparative Strategies, London, CAB International. 30. PRABHU, S. , (1996), “Challenges for hospitality and tourism operators: a North American perspective”, International Journal of Contemporary Hospitality Management, 8/7 p. 61. MCB University Press.

31. PURCELL, J. , (1998), Human resource bundles of best practice: a utopian cul-de-sac. 32. SHAREEF, M. , (2004), interview with the Human Resources Director of Bandos Island Resort, January 2004.

3. TOURISM TRENDSPOTTER, Market Segment and the New Millennium, What Next? , Vol. 2, issue 2, Dec.

1999 – Jan. 2000. 34. TRIBE, J. , (1999), The economics of leisure and tourism, 2nd Ed.

, Butterworth-Heinemann, Oxford, United Kingdom. 35. WAHEED, M. , (2003), interview with the Finance Director of Bandos Island Resort, December 2003. 36. WOOD, R.

C. , (1997), Working in Hotel and Catering, London, International Business Press. 37. WOODS, R. H.

, (1995), Human Resource Management, Educational Institute of the American Hotel & Motel Association, United States of America. 8. WTO. , (2001), “The impact of the attacks in the United States on international tourism: An initial analysis”, World Tourism Organization, 18th September 2001, Special Report, Madrid.

39. WTO. , (2003), “World Tourism in 2002: Better than expected”, World Tourism Organization, News Release, Madrid, 27th January 2003.

Appendix – 1A Market Share (%) of Bandos Island Resort, 1998 – 2001 Appendix – 1B [pic] Source: Ministry of Planning and National Development, Maldives. Appendix – 1C [pic] Source: Ministry of Planning and National Development, Maldives.Appendix – 2 Major Expenditure Areas (excluding payroll and related expenses), Bandos Island Resort, 2000 – 2003 [pic] Source: Finance Department, Bandos Island Resort. Appendix – 3 [pic] Source: Sales and Marketing Department, Bandos Island Resort. Appendix – 4 [pic] Source: Finance Department, Bandos Island Resort. Appendix – 5 Growth Rate (%) of Market Share, Bandos Island Resort, 1999 – 2001 [pic] Source: Sales and Marketing Department, Bandos Island Resort. Appendix – 6A [pic] Source: Sales and Marketing Department, Bandos Island Resort.

Appendix – 6B [pic]Source: Finance Department, Bandos Island Resort. Appendix – 7 [pic] Source: Ministry of Planning and National Development, Maldives. Appendix – 8 Financial Ratio of Bandos Island Resort, 2001 and 2002 |Ratios |2001 |2002 | | | | | |Liquidity Ratios | | | |1. 70: 1 |1. 41 : 1 | |1. Current Ratio (Current Assets ? Current Liabilities) | | | | |0.

40 : 1 |0. 28 : 1 | |2.Cash to Current Liabilities | | | |(Cash at Bank and in Hand ? Current Liabilities) | | | | |0. 75:1 |1. 08:1 | |3. Acid Test Ratio | | | |(Current Assets – Stock ?Liabilities) | | | | | | | | | | | |Profitability Ratios | | | | |26% | | |1.Gross Profit Percentage {(Gross Profit ? Turnover) x 100} | |39% | | | |15% | |2. Net Profit Percentage {(POABT ? Sales) x 100} |3% | | | |0.

71 : 1 |0. 7:1 | |3. Fixed Assets Turnover Ratio (Turnover ? Tangible Fixed Assets) | | | | | |36% | |4. Gearing Ratio | | | |{Long-term Debt ? Long-term Debt + Shareholder Funds)} x 100 |39% | | | | | | |Use of Assets | | | | |US$18080 |US$21024 | |1.Average Turnover per Employee | | | |(Turnover/Average Number of Employees) | | | Source: Finance Department, Bandos Island Resort. Appendix – 9 Organization Structure of Bandos Island Resort, 2002 [pic] Source: Human Resources Department, Bandos Island Resort.

Appendix – 10 Payroll and Related Expenses of Bandos Island Resort, 2000 – 2003 [pic] Source: Human Resources Department, Bandos Island Resort.


I'm Mia!

Don't know how to start your paper? Worry no more! Get professional writing assistance from me.

Check it out