This report mainly focuses on the market segmentation-targeting positioning process of the companies in the hospitality and tourism management industry. Since it is a growing industry, there are a lot of customers, and pleasing all of them has proven to be a very difficult task. Therefore, the companies that are involved in this industry have developed means and ways of staying on top of their league. This report focuses on this process specifically by one company in this industry.

The hospitality and tourism management industry has appeared to have changed a lot ever since the first motel was opened in 1925 in San Luis Obispo, California. Hospitality and tourism industry revolves mainly around leisure service industry. Hospitality industry deals mainly with serving of the guests including hotels, casinos, restaurants, clubs, and resorts. Tourism, on the other hand, deals with the various travels away from home and majors on transportation, entertainment, planning marketing, and development. The graph below shows the various activities that travelers in the United States of America engage in bringing together hospitality and tourism.

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Market Segmentation

According to Deale (2013), this is the process whereby a company or a producer divides all its consumers into various groups of potential buyers with approximately similar characteristics. Once a company has created a product or is offering a service, the first thing to do is to find out its targeted audience. Some customers will be willing to buy the product, while others will not be interested in it. Among those who are interested, some people will be much more interested in the product than the rest. Some will purchase a lot, while others will purchase less. It shows that not all potential buyers are equal. Yet again, some customers will appear to be interested in the product if it has the right price. Others will simply be interested because the product exists. As there are different consumers, it is important for the producer to divide these consumers and place them into various groups. This process is market segmentation. It has many advantages because it would be easy for the producer to meet the needs of his/her buyers. While doing the market segmentation, there is a need to find out which of the consumers are similar, so that the product will appeal to all of them.

Agarwa (2001) states that because most companies have a limited marketing budget, it would be beneficial for them to spend less and get more profit. Therefore, while doing the market segmentation, they tend to focus more on their customers.

In the hospitality and tourism management industry, there are various companies. In the same way, there are various customers with different needs. There is competition in this industry, and it proves difficult for one company to satisfy the needs of customers in the market place. To continue enjoying their profits, they should employ a market segmentation strategy.

Targeted Marketing

Targeted marketing implies selecting groups of people the company wants to sell its product to. After market segmentation, the next step is targeting. It is clear that no specific strategy would be suitable for the needs of all the groups. Targeting can only be done after market segmentation. For instance, such company as a hotel in the hospitality and tourism management industry has done its segmentation. It has segmented the targeted consumers. The next step is to position its target. Among all the groups it has formed, there are some groups that will yield high revenue for it; hence, the most reliable option for this company is to position their target. It is done because its sole purpose is to benefit from its business. Customers are widely spread and they have different needs. One company cannot satisfy the needs of all the customers in the market place and at the same time, make the desired profits. The company will then segment and target the specific group of buyers who would bring much profit to it.

According to Litvin (2005), while doing this targeting, the company first considers which advantages the segmented groups have. Before targeted marketing, there has been mass marketing, where the same product has been sold to everybody. Mass marketing is similar to using a shotgun as the marketing messages are blasted to every media for all the customers, whereas targeted marketing resembles using a riffle, whereby you aim at a specific customer with your message.



After segmentation and targeting, the next step is positioning. It implies creating the image of the brand or product in the mind of the customers. The company includes the experience the customers will have if they decide to use their products. Most of the times, this can be seen during advertisements where specific hotels are advertising their services and state that customers to tour the place will have relaxed atmosphere and a serene feeling.


This strategy has a lot of advantages. Marzano (?2008) states that one major advantage is that it will ensure that the company does not spend a lot of money on marketing. Once they perform the marketing segmentation, it would be easier to channel their products or services in the right way. This strategy would save time and money because during the positioning step, trying to create the brand image in the minds of the customers would be easier because the message would be directed to specific audience.

Companies in the Hospitality and Tourism Marketing Industry

The first motel was opened in 1925 in San Luis Obispo, California. Today, there are around five million hotels in the entire country, and tourists use approximately $560 billion every year on travel expenses in the United States. An example of a company in this industry is the Hilton worldwide hotels. There are various companies operating in this industry; however, hospitality industry deals mainly with serving of the guests including hotels, casinos, restaurants, clubs, and resorts. Tourism, on the other hand, deals with the various travels away from home and majors on transportation, entertainment, planning marketing, and development.

Hilton Worldwide Holdings

According to the Times (2013), this is one of the major hospitality companies in the industry. This company has around 4000 hotels in over six continents and 90 countries. The marketing emphasis of this company is both businesses travelling band leisure travelling. This fleet of hotels is mainly located in major cities near airports and popular destinations for vacations around the world.

In this industry, there are various competing hotels, and many tourists tend to use the hotels while on their missions. However, as earlier stated, the customers are numerous, and it would not be wise to try to please and satisfy the needs of all the customers at once. Therefore, this company has used a market strategy. This strategy has been the reason for their success across six continents.

Marketing Strategy (Segmentation)

The company has used themarket segmentation-targeting-positioning process. The segmentation of the company appears to be in four groups. One of the groups is based on the budget, the other group is based on the mid-market, the third group is based on upscale, and the last group is based on luxury. In this industry, there are customers who use the hotels based on their budget, those who want upscale hotels such as Hilton, and those who use hotels on the basis of the luxury that the company offers.

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Targeted Marketing of the Hotel

The Hilton hotels and resorts have segmented their customers in these four groups and then, targeted them in the following ways: the leisure travelers, couples on honeymoon, corporate workers, families, and people on the extended stay. No specific strategy would be suitable for the needs of all the groups. Among all the segmented customers, there are groups that would yield high revenue for the company. This group is the leisure travelers. The hotel mainly focuses on this group because once they visit the hotel, they tend to spend more than other groups because they are on their leisure and want to have fun to the fullest. Therefore, the company focuses on this group of customers the most.


The positioning of this company is prime location and luxury living. While running their advertisements, the picture that the company tends to create in the minds of the customers is that the hotels are located in prime areas, especially the city centers, and once one chooses to use or visit the hotels, he/she will have a feeling of luxury living due to the company’s services.

Taulli (2013) states that this strategy of segmentation-targeted marketing and positioning has proven very fruitful for this company. The table below shows how much this strategy has helped to improve the number of hotels over three years. The occupancy rate has also steadily improved because of the marketing strategy employed by this company in the hospitality industry.

Historical Performance





Number of Hotels




Number of Rooms (Thousands)




Geographical Presence (Countries)




Occupancy Rate (Percent)








The table shows that in 2005, the company owned 2,800 hotels worldwide. The increase of the occupancy rate is a clear indicator of the fact that the company has been able to market and sell its room very well employing necessary marketing strategy that works. The company has had a great improvement in the market because of the market segmentation-targeting-positioning strategy. This strategy involves the company dividing all its consumers into various groups of potential buyers with approximately similar characteristics and then, selecting groups of people whom they will offer their services. For the Hilton worldwide hotels, this targeted marketing is adhered to the leisure travelers, couples on the honeymoon, corporate workers, families, and people on the extended stay.

According to Spears (2013), recently, this company has introduced a new service in the tourism and hospitality market. They have begun to offer spa services in some of their hotels. Similarly to the earlier services, this new service also has its own targeted customers. For this service to yield the desired profits, it has to be put into full use. Thus, the marketing strategy is aimed at offering the services to the corporate and the leisure travelers group of customers. After a long week, a relaxing spa treatment in a luxurious hotel would not seem like a bad idea at all.

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After carrying out this research, it is evident that the hospitality and tourism industry is a growing sector with lots of customers who have various individual needs. The existing companies in this industry cannot satisfy all the needs of these customers at a go. Therefore, for the company to gain the required profits from its business, it would be advisable to employ the market segmentation-targeting-positioning. It is the only strategy that will ensure that the company benefits from its business and also satisfy its targeted clientele.

In conclusion, Hospitality and Tourism companies recognize that they cannot appeal to all customers in the marketplace. Customers are too numerous, too widely scattered, and too varied in their needs and buying processes. The Hilton worldwide company can be used as a proof of how much beneficial it is for a company to employ the marketing segmentation, targeted marketing, and positioning.

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