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Cornell Study Highlights Limitations of Marketing Segmentation Strategies |
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The marketing strategy of specifically targeting some market segments, while leaving other segments to competitors, is unrealistic, according to a new report from Cornell University. |
Although the strategy of positioning a product to appeal to certain segments' distinctive needs and wants is widely advocated by marketing professors, researchers have found little evidence that such a strategy leads to domination of the targeted segment. In the report, 'Brand Segmentation in the Hotel and Cruise Industries: Fact or Fiction?,' Cornell marketing professor Michael Lynn tested the effectiveness of these strategies in the hotel industry.
Using consumer panel data from D.K. Shifflet and Associates that described 278,499 trips the panelists made during 2003 and 2004 in the United States, he examined the customer profiles of eight economy hotels, twelve midlevel hotels, and twelve high-end hotels. Finding that competing hotel brands all have very similar customers, he concludes that none of the brands has succeeded in claiming a subset of market segments as their own.
'It is remarkable how similar the customers of different hotel brands are. I cannot reveal the names, but looking at well-known brands, one company's customers are basically the same as those of its direct competitors,' Lynn explained. 'Although many of the hotel brands attracted a slightly larger than average share of their customers from specific segments, such as women, business travelers, or three-person households, the differences in customer profiles were too small to justify a strategy of concentrating on one or two segments to the exclusion of others.'
The full report is available at no charge at the Cornell Center for Hospitality Research website, http://www.hotelschool.cornell.edu/chr/research/centerreports.html.
About The Center for Hospitality Research
A unit of the Cornell School of Hotel Administration, The Center for Hospitality Research (CHR) sponsors research designed to improve practices in the hospitality industry. Under the lead of the Center's 56 corporate affiliates, experienced scholars work closely with business executives to discover new insights into strategic, managerial and operating practices. The Center also publishes the award-winning hospitality journal, the Cornell Hotel and Restaurant Administration Quarterly. To learn more about CHR and its projects, visit www.chr.cornell.edu.
CHR Partners and sponsors: AIG Global Real Estate Investment, Expedia, Inc., Four Seasons Hotels and Resorts, HVS International, JohnsonDiversey, Inc., Kohinoor Group, Marriott International, Inc., Marsh's Hospitality Practice, Mobil Travel Guide, Nestlé, PricewaterhouseCoopers, Proskauer Rose LLP, Smith Travel Research, Southern Wine and Spirits of America, Inc., SynXis (a Sabre Holdings Corporation), Taj Hotels Resorts and Palaces, Thayer Group of Companies, Travelport, and Wimberly Allison Tong & Goo.
CHR friends: 4Hoteliers.com • ARAMARK • Caribbean Hotel and Restaurant Buyers Guide • Cody Kramer Imports • Cruise Industry News • DK Shifflet & Associates • ehotelier.com • Estrela Marketing Solutions • Fireman's Fund Insurance Company • Gerencia de Hoteles & Restaurantes • Global Hospitality Resources • Hospitality Confections • Hospitality Financial and Technology Professionals (HFTP) • hospitalityInside.com • hospitalitynet.org • Hotel Asia Pacific • Hotel China • HotelExecutive.com • Hotel Interactive • Hotel Resource • International CHRIE • International Hotel and Restaurant Association • International Hotel Conference • iPerceptions • KPMG Japan/Global Management Directions • Lodging Hospitality • Lodging Magazine • PKF Hospitality Research • Resort+Recreation Magazine • The Resort Trades • RestaurantEdge.com • Shibata Publishing Co. • The Lodging Conference • Taste & Travel • TravelCLICK • UniFocus • WageWatch, Inc. • WIWIH.COM
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