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A Benefit-based Segmentation of a
Nonresident Summer Travel Market
This study examined the feasibility of segmenting a nonresident tourist market on the
basis of vacation benefits sought. Six distinct benefit-based market segments were found
using factor and cluster analysis procedures. The resulting segments were compared on the
basis of specific dependent variables organized under the following framework: travel
party leader characteristics, travel party composition, trip planning and trip characteristics, and post-trip evaluation. Finally, marketing strategy implications were addressed.
The following evaluation criteria were used in target market selection: profitability,
accessibility, and reachability. Benefit-based market segmentation studies were found to be
a viable means of determining vacation market segments. The importance of the development of objective and quantifiable means of evaluating market segments is stressed.
The travel literature indicates the need and potential for
of a benefit-based segmentation study. The travelrelated benefits sought by an individual potentially affect
several vacation behavior variables, such as trip purpose,
choice of destination, and length of travel planning time.
Learning the benefits realized by a destination’s visitors from
major market segments may be helpful in planning unique
positioning messages to appeal successfully to each segment, adjusting advertisement messages, and improving
physical facilities (Woodside and Jacobs 1985). While many
studies indicate that differences exist between various market segments identified on the basis of benefits sought, no
systematic evaluation of the segments exists regarding the
criteria by which they differ or what affects target market
selection and marketing strategy formulation.
Market segmentation can be defined as the act of dividing
market into distinct and meaningful groups of buyers who
might warrant separate products and/or marketing mixes. It
is an effective marketing strategy that can result in the more
efficient and effective use of marketing and promotional
dollars, especially in advertising (Kotler and McDougall
1983). Benefit segmentation is an approach to market segmentation by which it is possible to identify market segments
by causal rather than descriptive factors. The belief underlying this strategy is that benefits which people are seeking in
consuming a given product are the basic reasons for the
existence of true market segments and are better determinants of behavior than other approaches (Haley 1968). Benefits predict behavior better than personality and lifestyle,
volumetric, demographic or geographic measures, which
merely describe behavior without explaining it (Haley 1985;
Young, Ott, and Feigin 1980).
Good market segments generally consist of consumers
with homogeneous product needs, attitudes, and responses
to marketing variables (McCarthy 1982). The segments
should also be distinctive from one another, so that group
membership of an individual is clearly based on key attitudes
(Weinstein 1987). Another characteristic of a good market
segment is substantiality: a segment should be large enough
to be profitable, size being measured by volume consumption (McCarthy 1982). The value of the marketing information generated by the market segment is the final criterion.
Good market segmentation research provides operational
data that are practical, usable, and readily translatable into
The purpose of this study was to examine the feasibility
of segmenting a nonresident tourist market on the basis of
vacation benefits sought. Specifically, the study objectives
were to determine (1) whether tourists could be grouped
together based on similarities and differences in desired
vacation benefits, (2) whether statistically significant differences existed between the resulting segments on the basis of
demographic, socioeconomic, and vacation and trip-related
variables, and (3) whether any resulting differences were
meaningful from a marketing standpoint, specifically with
respect to target market selection and development of a
communications campaign. ’
strategy (Weinstein 1987).
majority of segmentation studies in the tourism literon descriptive factors, and therefore have
limited usefulness in marketing strategy development.
However, some causal, cluster-based segmentation tourism
Laurie E. Lokeris in the Department of Tourism at James Cook
University of North Queensland in Queensland, Australia. Richard
R. Perdue is an Associate Professor in the College of Business at
the University of Colorado at Boulder. The authors wish to
acknowledge the financial support provided for this research by
the North Carolina Division of Travel and Tourism. Requests for
reprints should be addressed to Laurie Loker, Department of
Tourism, James Cook University of North Queensland, Queens-
land, Australia, 4811.
ature are based
studies have been conducted, a few of which are benefit-based. Bryant and Morrison (1980) used factor analysis to
form segments based on vacation activity preference types
. determined by frequency of participation in various outdoor
recreation activities. The marketing usefulness of this study
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is limited because the same behavior can arise from different
causes; therefore little insight is gained into improving the
content of advertising campaigns. Davis and Stemquist
(1987) used an attribute cluster strategy based on respondents’ evaluations of the availability of vacation attributes at
a destination area and the importance of these attributes in
their vacation decision. The degree of novelty sought by
vacationers, which was postulated to offer information about
the needs and wants of consumers, was used as a segmentation base in a study conducted by Snepenger (1987). Oppedijk van Veen and Verhallen (1986) conducted a clusterbased causal study similar to benefit segmentation, in which
respondents were grouped according to their attitudes towards vacations, vacation requirements, and desired vacation activities. In another study, a benefit clustering approach
was employed to segment hotel business clients on the basis
of measurements of the importance of 30 specific hotel
attributes (Moller et al. 1985). The Canadian federal government conducted a study of the U.S. pleasure travel market in
which six segments were defined based on desires sought
(Dybka 1987). Finally, the senior pleasure travel market was
clustered on the basis of the importance of 14 reasons for
traveling, which included escape and rest or relaxation
diary survey questionnaire was then given to respondents to
be completed during and after their visit. Each survey participant was sent a postcard reminder one week after the initial
contact was made. Nonrespondents were then sent a followup letter and a second copy of the questionnaire two weeks
after the postcard was sent. The questionnaire was selfsealing, self-addressed, and business reply-stamped to make
it easier for respondents to return.
The sampling frame for this study consisted of all visitor
parties stopping at an interview site on chosen collection
dates. A stratified random sample based on collection dates
was chosen. Specifically, the possible sampling days were
stratified by weekend versus weekday. A random sample of
dates was then selected and assigned to the 13 sampling sites.
An approximately equal percentage of sampling dates was
assigned to each geographical area of the state. The sample
size for the visitor survey was determined by the number of
sampling days scheduled. On each date, a maximum of 100
travel parties were contacted. During the summer collection
period 6,418 contacts were made. Of those contacts, 3,567
usable responses were received, resulting in a response rate
of 56%. To accurately compare vacation travelers to North
Carolina, the sample was further reduced to include only
those visitors whose primary destination was North Carolina
and who were on a vacation trip for pleasure purposes. The
result of this specification was a reduction of the sample to
(Shoemaker 1989).
variables used
segments in these studies include demographics (e.g., age,
1,209 respondents.
gender, place of residence, etc.), socioeconomics (e.g.,
occupation and income), trip characteristics (e.g., purpose,
time of visit, mode of transportation, party composition,
length of stay, and vacation spending and activities), and
media and travel information use. Snepenger (1987) used
Clawson and Knetsch’s five-stage model for a recreation
experience (anticipation, travel to destination, on-site behavior, travel from destination, and recollection) as a framework for selecting segment characteristics. The primary
weakness of these studies is their lack of a systematic evaluation of the resulting market segments. Specifically, each of
The first study objective determined whether the tourists
could be grouped together according to similarities and differences in desired vacation benefits. Factor and cluster
analysis procedures were used to achieve this objective.
these studies identified market segments which were different on selected personal or behavioral characteristics. Once
the market segment was identified, however, a systematic
evaluation of the proposed segmentation was not reported. In
this study, both segment identification and evaluation are
A visitor survey of nonresident travelers was conducted
for the North Carolina Division of Travel and Tourism over a
one-year period from April 1989 to April 1990 by the Office
of Park and Tourism Research, North Carolina State University. The.data for this segmentation study were obtained
from this survey and cover the prime vacation season from
Memorial Day to Labor Day weekends, May 20 to Septem11
ber 9, 1989.
Out-of-state visitors were contacted at 13 interview sites,
including the eight interstate welcome centers located at
major entry points throughout the state, at tourist information
centers at the north and south North Carolina boundaries of ,
the Blue Ridge Parkway and on the Outer Banks, and at the
Charlottc-Douglas and Raleigh-Durham International Airports. The general design of the study consisted of initial
contact with the visitors, requesting them to participate in the
study. Individuals who agreed to participate were asked to
provide their name and home address on a contact card. A
The questionnaire contained 12 statements representing
common benefits desired by travelers. For the purpose of
creating orthogonal variables, these 12 benefit statements
were factor-analyzed to determine whether underlying
dimensions existed which would reveal any relationships
between correlated variables in terms of a few conceptually
meaningful independent factors. Principal component factor
analysis with varimax rotation was used because these
methods were both supported in the literature and yielded the
most interpretable results.
The analysis resulted in four factors being retained with
eigenvalues greater than or equal to one. The four factors
accounted for 71.3% of the total variance in the benefitt
statements. The benefit statements and their factor loadings
are presented in Table 1. The first factor was labeled Escape/
Relaxation since the benefit statements dealing with the
opportunity to &dquo;get away&dquo; and &dquo;relax&dquo; have the highest
loadings on this factor. The second factor, Natural Surroundings, has the highest loadings on the statements relating to
getting away from commercialization and crowds and experiencing unpolluted natural surroundings. Excitement
Variety was chosen to identify the third factor since the
highest factor loadings were obtained on the benefit statements dealing with exciting things to do, variety, and new
and different experiences. The fourth and final factor is
.strongly represented by only one benefit statement, the
opportunity to spend time with Family and Friends.
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Factor scores, equal to the sum of an individual’s rating
that statement, were output for each respondent. Using
these factor scores, the respondents were clustered into
groups. The size of the sample dictated the use of a k-means
clustering procedure (SAS
places each observation
performs disjoint analysis
into one and only one cluster, as opposed to hierarchical, in
which one cluster may be entirely contained within another
(SAS 1985).
The decision as to how many clusters are to be retained is
subjective. The SAS FASTCLUS procedure provides a
pseudo-rsquare coefficient that reflects the extent to which
each cluster solution explains the variance in the original
factor scores. In this case, the increase in the percent of
variance explained by each cluster was plotted (SAS 1985).
The magnitude of this increase dropped off sharply between
five and six clusters. These two cluster profiles were examined, and it was determined that six clusters yielded the
and useful results. The six clusters and
factor scores are presented in Table 2.
Segment 1 has been labeled Naturalists, since their score
on Factor 2 is much higher than on the other three factors.
Segment 2 are the Nondifferentiators because they have
positive scores on all factors. Segment 3 are.-Vamily/Fr-iendoriented because their only high positive score was on Factor
4. Excitement Seekers with Escape were grouped together in
Segment 4 since they have a high score on Factor 3 as well as
a relatively high positive score on Factor 1. In contrast,
Segment 5 are Pure Excitement Seekers because their only
high positive score is on Factor 3. Finally, Segment 6 represents Escapists with a high positive score on Factor 1.
Comparison of Segments
The next objective differentiated the segments from one
another on the basis of demographic, socioeconomic, and
trip-related variables. These variables were categorized
framework: travel party leader
Note: 150 observations
omitted due to
missing data.
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characteristics, travel party composition, trip planning and
trip characteristics, and post-trip evaluation.
accomplish this objective, the segments were used as
independent variables and were compared to each other
on the basis of various dependent variables. The following is
a brief profile of each segment with respect to the descriptive
variables. Due to space limitations, tables presenting these
data have been excluded, but are available upon request from
the authors.
Naturalists. Characteristics that distinSegment 1
guished this segment include: (1) highly educated male party
leader aged 30 to 59; (2) middle income single professional
from the Middle Atlantic region; (3) familiarity with the state
and trip planned one to three months in advance, using
previous experience as primary source of information; (4)
travel to the North Coastal/Outer Banks region for outdoor
recreation with four to five family members or friends; (5)
lodging in a rental cottage/condo for six to seven days,
spending approximately $980.00; and (6) camping/hiking,
fishing, and visiting scenic or historical sites using previous
visits for information.
Segment 2 - Nondifferentiators. Important characteristics include (1) professional male party leader aged 30 to 49;
(2) middle to upper income family with young children or
teens; (3) origin most commonly from the Middle Atlantic or
South East Regions, but origin is dispersed; (4) trip planned
one to three months, or more, in advance using previous
experience, map, auto clubs, and tourist offices; (5) travel to
North Carolina with four to five family members or family
and friends for any one of the three major trip purposes
outdoor recreation, visiting family and friends or sightseeing ; (6) five- to six-day stay in hotels/motels, condos or with
friends, spending approximately $880.00; (7) visit to North
Coastal/Outer Banks region more likely and visit to AshevillelS.W. Mountains less likely; and (8) museum and
amusement park visits and fishing, using brochures, commercial guidebooks, and the state tourism office as information sources.
Segmellt 3 - Family/Friend-oriented. Obviously, the
primary characteristic of this group is the tendency to travel
for interaction with family and friends. Other important
characteristics include (1) retired male party leader with
lower to middle income; (2) origin less likely to be from the
Middle Atlantic Region, most likely from the Far West; (3)
trip planned less than three months in advance using relatives
or travel agents; (4) travel to North Carolina with three to
four family members or alone, for the purpose of visiting
family and friends; (5) five- to six-night stay with family or
friends in the more urban areas of the Research Triangle
Park/Heartland or Charlotte/South Central regions, spending
approximately $580.00; (6) beach and historical site visits
using friends or relatives as information sources; and (7)
dissatisfaction with the availability of tourist information.
Segmejrt 4 - Excitement/ Escape. The primary characteristics of this group are (1) male or female party leverage
30 to 49 with relatively lower education; (2) single or married
without children with middle to upper income and professional/technical occupation; (3) origin from the Middle
Atlantic or South East Regions; (4) trip planned less than one
month in advance using commercial guidebooks and previous experience; (5) travel with about three family members
or friends for sightseeing, staying five nights in a hotel/motel
spending approximately $740.00; (6) little likelihood of
visiting the Charlotte/South Central region; (7) museums or
beach visits using attraction brochures as information
(8) high satisfaction with the availability of
tourist information.
Segment 5 - Pure Excitement Seekers. As compared to
the other segments, important characteristics of this group
include (1) greater representation of retired or self-employed
male travel party leaders aged 40 to 59; (2)-middle to upper
income and more likely to be from the Great Lakes region,
not from the Middle Atlantic; (3) trip planned less than three
months in advance using state map, commercial guidebooks,
magazines and local tourist offices (not likely to rely on
word-of-mouth); (4) greatest likelihood of requesting the
state travel packet; (5) travel with a small party of family or
family and friends to sightsee in the High Country region
(less likely to visit the North CoastahOuter Banks region);
(6) three- to four-night stay in a hotellmotel or campground,
spending approximately $515.00; (7) beach visit or attendance at a team sports event using brochures, commercial
guidebooks, and the state tourist office as information
sources; and (8) greatest satisfaction with the quality of
highways, scenery, and attractions.
Segment 6 - Escapists. The characteristics of this group
include ( 1 ) male or female party leader aged 30 to 49, either a
homemaker or employed in clerical/service occupation, with
middle to upper income; (2) trip planned one to three months
or more in advance using previous experience; (3) travel with
four to five family members or friends for any one of the
three major purposes, outdoor recreation, visiting family and
friends or sightseeing; (4) no propensity towards any one
region in North Carolina, with lodging in a hotel/motel,
cottage or with friends and relatives, spending approximately $870.00; (5) visits to historical sites or scenic areas,
sources; and
fishing, or attending team sports events using previous experience or friends and relatives as information sources; and
(6) least satisfaction with the quality of attractions, scenery,
Marketing Implications
The third objective determined whether the differences
between segments were meaningful from a marketing standpoint, specifically with respect to target market selection.
Target Market Selection. To determine which market
segments were most desirable for the state’s marketing
efforts, the six market segments were evaluated on profit-
ability, accessibility, and reachability. Profitability measures
were concerned with both overall volume and person-night
performance. Specifically, profitability was measured in
terms of the percentages of total expenditures related to
percentage of respondents, the percentage of person-nights
(mean party size x mean number of nights) and average
expenditures per person-night. An ideal market segment
would account for a large percentage of respondents, even
larger percentages of expenditures and person-nights, and
have the highest average expenditure per person night. A
summary of the analysis is provided in Table 3. The segments
providing the greatest overall contribution to travel expendi-
the Nondifferentiators, the Naturalists and the
Escapists, while those with the greatest growth potential in
, terms of spending generated per increase in person-night are
the Excitement with Escape and the Pure Excitement
Accessibility was measured on the basis of both the type
and number of trip planning information sources used and on
the geographic concentration of the market segment. The
evaluation of the reachability of each segment was concerned
tures are
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with the likelihood of communication efforts attracting the
attention of segment members and generating an interest in
and desire to travel to North Carolina. Common trip purpose
and activity themes as well as the segment’s trip satisfaction
were used to measure reachability.
Each segment was rank-ordered on its relative performance on the elements of the evaluation criteria, the highest
ranking assigned a value of 6 and the lowest a value of 1. The
overall ranking for each criterion was determined by summing the values on each element. The overall evaluation
assigned to each segment was determined by adding the total
ranking on each criterion, a higher ranking being more desirable. The results of this procedure are presented in Table 4.
This evaluation procedure determined that-the most profitable segments are the Nondifferentiators, the Naturalists,
and the Escapists. The most accessible are the Excitement
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Pure Excitement Seeker segments, for the
are likely to use several information
sources and those sources tend to be accessible media, not
previous experience or word of mouth. The Excitement with
Escape segment also tends to be geographically concentrated. The Naturalists have a specific outdoor recreation
purpose theme and a common activity theme. The Pure
Excitement Seekers also have a specific purpose theme,
sightseeing. Although the Family/Friend segment does have
a very specific purpose theme, to visit family and friends, it
did not receive a high ranking because this theme was not
considered marketable.
Overall, the evaluation process indicated that those segments towards which marketing efforts should be concentrated are the Pure Excitement Seekers and the Naturalists. It
should be noted that an ideal segment, ranking highest on all
criteria, would achieve an overall ranking of 60. In comparison the Pure Excitement Seekers achieved 76.6% of this
score and the Naturalists 73.3%, less than ideal. Because of
the impreciseness of the ranking procedure and the closeness
of their overall ratings, these segments should be considered
to be equally desirable. While communication campaigns
should be developed for these two segments, it is assumed
that a spillover effect will occur since they do have some
elements in common with the other segments, such as trip
purpose and/or geographic origin.
Escape and
part because they
state’s tourism product and its unique strengths’and weaknesses, and thereby further identify those segments which
are not only potentially profitable, h4t-ue-a.Iso-vi able opportunities for further development by the North Carolina tourism industry. In this regard, a important result o the North
Carolina Visitor Survey was documentationi6at each _8section
of the state serves very different geographical markets. Thus,
further development of this market segmentation strategy
involves looking at the unique strengths and opportunities of
each sector of the state and development of appropriate
marketing strategies.
Apart from the impreciseness of the ranking procedure
used, a study limitation lies in the fact that only 12 rather
broad benefit statements were the basis for clustering. Ideally a larger number of more specific statements would have
been used, hopefully resulting in more distinctive factors and
clusters. Another limitation is that more detailed information
was not obtained from the respondents with respect to the
types and specific names of media through which they are
most often exposed to tourism communications.
Efforts in future research should be made to decrease the
subjectivity involved in establishing and evaluating travel
market segments. There is a need for development of objective and quantifiable means for determining the number of
factors and clusters to be retained and for establishing and
measuring evaluation criteria.
This article has indicated that benefit-based market segmentation studies are a viable and useful means of determining vacation market segments. In an increasingly competitive environment with reliance on limited resources, the
importance of market segmentation is clear. It provides a
means to focus marketing strategies on key segments which
provide the highest return on investment, can be reached
efficiently and effectively through available media, and are
compatible with the product being offered. While numerous
approaches exist to segmenting travel markets, benefit segmentation has the advantage of being based upon predictive,
causal factors and, when combined with key descriptive
variables, provides clear insight into marketing and communication strategy formulation.
The establishment of objective and quantifiable evaluation criteria for use in target market selection is important.
The criteria used in this study were established to address key
considerations in determining the viability of a market segment : is the segment profitable? are segment members accessible through the media? and, once reached, will positive
interest and desire be generated? Multiple measures were
used at an overall ranking on these criteria in an attempt to
quantify the performance of the market segments on key
marketing variables and to therefore provide a justifiable
means for target market selection. However, the ranking
procedure used to compare segments lacks preciseness in
that it does not indicate the degree to which one segment is
superior over another, only that it is superior. The development of a more precise numeric rating scale to use in the ,
comparative evaluation of market segments would be beneficial.
Importantly, the next step in the process of identifying
and targeting market segments for the state is to examine the
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