Definition of Target Market

Target market is a group of people with similar demographic characteristics who are ‘targeted’ by hotels company to promote their available products and services. A hotel will have multiple target market focuses and there is no limit to the number.

This target can change over time and technological developments, and we must always look at the business opportunities to stay exist in the hotel industry and be able to compete with competitors.

What are The Examples of Target Market?

Generally, the target market can be divided into several groups.

For example, Hotel Management Division together with Sales and Marketing Department will have target markets of:

  • Guests from certain institutions, companies, or business fields
  • Adventure tourist, Eco-tourist, and other tourist classifications
  • Foreign guests

Meanwhile, for Front Line Staff who focus on promoting products and services to visitors, the market focuses are business guests, family guests, individual and group guests.

What is The Purpose From a Target Market?

target market

To be able to compete with business entities engaged in similar fields, a company must determine a target market so that promotions are more targeted. Here are the purposes of selecting a target market for hotel companies:

  • Make it easy to find service differences between one hotel and another, so you can plan strategies to ‘beat’ other competitors by attracting more visitors
  • Understand what customer needs, wants, preferences, and expectations in greater depth
  • Motivate hotels to develop a better and more creative products and services
  • Creating a more effective and targeted promotion
  • Easier to identify visitors, and to determine how to serve guests and what should not be recommended.

Demographic Characteristics of Target Market

target market

Demographic characteristics can be defined as characteristics that describe the differences in society. A knowledge of various demographic characteristics is needed to define a target market or to describe the types of potential customers who are in the ‘market’.

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These followings are groups of demographic characteristics that are generally used to determine target markets in hospitality industry.

Age

This category includes age ranges, minimum or maximum age limits, or age group levels, for example babies, teenagers, adults, elderly. Furthermore, this category makes it easier for companies to find information on what trends are in demand by certain group of ages.

Gender

Divided into male or female. By knowing gender, we can understand what products and services are suitable and what are not suitable. This information also helps with room and seating arrangements

Marital Status

Information from this category helps to determine what products or services can be offered, for example, honeymoon packages, family packages, and so on.

Income Level

This category is divided into lower middle class, upper middle class, and upper class. Knowing the income level of the target market will help to quote prices, package inclusions, the quality of the products and services offered, as well as the overall standard of hotel ambiance and facilities. This also helps to ensure that the services offered are in accordance with the budget range of visitors.

Nationality

This information helps to know which language the guest speaks, so that the hotel can provide staff who can speak the language. Apart from that, the hotel can also provide information about products and services that are printed in foreign languages.

Geographical Location

Some hotels develop marketing based on the geographic location of visitors.

For example, a hotel that located close to a vacation spot or a souvenir center, the target market are mostly the visitors from within or outside the country who aim to have a vacation in the area. The hotel can provide services, such as tour guides, photography services in the form of camera rental or at the same time with a photographer, or transportation service.

Employment Status

Some hotels try to identify the employment status of their visitors, as it relates to income levels, as well as access to credit cards they might have. Employment status is divided into working and not working categories. This category is generally used to help every visitor to continue to enjoy the services available, but still budget-friendly.

Transportation Used

This information is needed to prepare transportation options (car, bus, or motorbike) that visitors may need for recreation, pick up or drop off visitors from the airport, and so on. The number of types of transportation used can also help the hotel to build cooperation with transportation providers.

Media Used

Hotels need to know the most frequently used media, for example TV, internet, newspapers, to facilitate the selection of advertising media. There are types who prefer advertising on TV, or who more frequently access promotional information with the internet, and also there are those who prefer direct promotion.

This aims to determine which media has the most influence, so that marketing activities with these media can be maximized.

The Preferred Payment Method

Some choose the type of cash payment, or choose to use non-cash transactions such as debit or credit cards. Technological advances have encouraged more and more companies to develop various payment methods to simplify the purchasing process.

This needs to be known by the hotel in order to be able to provide satisfactory services, such as by accepting various types of cards or providing money exchange facilities at the hotel. In addition, hotels can also collaborate with companies such as Banks or payment service providers, to attract visitors by offering discounts or cashback if visitors use one of these payment methods.

Knowing the demographic characteristics of visitors will help determine what prices to offer, what packages can be promoted, and other preferences regarding products and services.

Benefit from Determining Target Market Correctly

target market

After knowing the main purpose of the target market, as well as the demographic characteristics of the target market, next are the benefits a hotel can get by determining a target market. This benefit is not only for the hotel as a provider of products and services, but also for visitors.

Here are the benefits of determining the target market.

  • Able to Find What The Guest’s Need

This can be done by distributing questionnaires, conducting surveys, and conducting focus group discussions. So that the hotel can accurately fulfill the desires of visitors, rather than developing or create something only based on the assumption that these products and services will be loved by visitors.

  • Faster Sales Process

Products and services that match the wants and needs of visitors as the target market, will help the sales process take place faster. When visitors have found products and services that match their needs, they tend to make purchasing decisions faster and potentially become customers

  • More Profitable Sales

The right target market will mostly bring in visitors who are willing to pay more for the products and services they get, because what is being offered matches or even exceeds their expectations and preferences. These visitors will feel that the cost is worth what they get.

  • Cut Production Costs and Resources

Producing products and services that the target market wants is better than wasting resources on producing things that we thought visitors might like.

This means that the hotel can save more time in producing products and services, and reduce the value of losses if the products and services must be sold at lower prices, or are no longer attractive to visitors.

  • Focus on Producing The Product and Service

Some hotels feel that they can fulfill all the wishes of a visitor. This is a positive thing, but it can turn into chaos if not filled with it.

It would be better if a hotel determines one main focus in creating a product and service, according to the target market. The goal is for products and services to continue to grow. It is not necessary to be an expert in all fields, it is enough to be an expert in one service and remain consistent to maintain quality.

  • Reducing The Possibility of Competitors

In this free market economy, new businesses will enter the market when they feel there is a profit to be made. In other words, when a hotel manages to show and identify a new profitable market or trend, competitors can emulate and take advantage of the opportunities that have been created.

However, if the target market has grown significantly and consistently maintains the quality of service for that target market, competitors will realize that there is no chance for them to reach the same level, and slowly choose to create their own market or withdraw from the competition.

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