Applying the marketing mix to segmentation strategies in a five star hospitality industry

Abstract

The hotel sector is a growing industry and competition is very harsh, whereby high end hotels have to compete also with lower end hotels (Limtingco, 2008). Different markets can be reached efficiently and effectively through the segmentation strategy, as the heterogeneous market is divided into segments and offered diversified products and services (Armstrong and Kotler, 2004). This study questioned the distinctiveness of two particular consumer segments: the leisure; and the business segment, through questionnaires. The 150 respondents of this questionnaire are people with a full time employment who have been to five-star hotels in the past, either for leisure or for business purposes. Furthermore, this study was complemented with further research, conducted through structured interviews. These interviews were held with top management of various local five-star hotels. The interviewees were asked about the extent to which they segment the market and offer a diversified marketing mix to their customers. Results show that there are significant differences among the consumer segments identified. The questionnaire results show that the leisure segment has a better perception of the service quality of five-star hotels than the business segment. Top management interviewed claimed that the needs of the two segments are also very different.