Are you “Embracing Life” or “Getting Ahead”? Case Study of Domestic Travel Segmentation Todd Nicholson
Are you “Embracing Life” or “Getting Ahead”? Case Study of Domestic Travel Segmentation
Todd Nicholson
How important is the domestic tourism market?
Contributes $12.4 Billion annually to NZ economy
57% of the contribution from tourism Yet almost all coordinated marketing
focuses on international travelers
Goal of our workUnderstand size and composition of
groups with in the marketProduce segments that are good
predictors of both travel type and frequency
Simple and easy to understand for:
Design online surveyChoose variables for segmentationPrinciple Components AnalysisK-means technique to identify segmentsProfile segmentsValidate segments with industry experts
Segmentation Approach
% o
f tr
avel in
last
year
2000 people were surveyed using an online survey
Selected by region, gender and ageOver 100 questions
including:◦Demographic◦Behavioural◦Interests◦Preferences◦Drivers◦Hindrances
Survey Data Used
Interests and favouritesLife cycle stageGenderPersonal prioritiesEducation levelIncome (amount and source)Consumables and property ownedOwnership and access to technology
Variables Used in Segmentation
Principal Components Analysis
Need to narrow down the 200 or so variables
While losing as little information as possible
Also means the segmentation inputs are not correlated
Principal Components Analysis
Segmentation Approach
Use K-means to identify similar groupsAvoid hierarchical clustering because we
need to keep it simple8 segments were used to balance
simplicity and detail
Many ways to skin a cat
SAS coding (very flexible, slower)Enterprise Guide (slightly less flexible,
faster, good for graphing results)JMP (slightly less flexible, faster run time)Enterprise Miner (fast development,
transforming and imputing is easy, easy to profile segments)
Segmentation Results
Viewing the Segments
Being There
Viewing the Segments
Aiming High
Viewing the Segments
Aiming High
Break Frequency and Aspiration%
asp
irin
g t
o m
ore
dom
est
ic s
hort
bre
aks
Avg. number of domestic short breaks last 12 months
Holiday Frequency and Aspiration%
asp
irin
g t
o m
ore
dom
est
ic longer
holid
ays
Avg. number of domestic longer holidays last 12 months
Profiling the Segments
Segments broken-down by Gender
Profiling the Segments
Aiming High
Profiling the Segments
Aiming High
Profiling the Segments
Aiming High
Profiling the Segments
Aiming High
Ideal holiday – Destination characteristics
(-3=Not important, 3=Very important)
Profiling the Segments
Aiming High
(-3=Not important, 3=Very important)
Ideal holiday – Activities and experiences
Profiling the Segments
Aiming High
Profiling the Segments
Being There
Profiling the SegmentsImmersing
Profiling the SegmentsRewarding
Aiming HighSize: 8% of the adult population
Demographics: Younger, many students, many living at home or in flats, high-income households, over-represented in Auckland
Travel: International (+), domestic short (+), domestic long (+)
Key Interests: Texting, Facebook etc, downloading music, eating out, tramping, boating, going to concerts and performing arts, going to movies, live music, surfing, waterskiing, diving, kayaking, swimming, going to gym, yoga and meditation, cycling and mountain biking, going to dance classes, meeting new people, playing sports and watching live sports
Priorities: Having a good time, finding direction, fitness, travel, sport/hobbies, career, education
Travel Interests: Beaches, big cities, nightlife, shopping, sporting activities, outdoor activities, wellness, food and wine
Key Destination Characteristics: Exciting, entertaining, challenging, different
Travel Barriers: Annual leave, work commitments, transport, travel companions
Marketing Channels: Youth media, special interest media (e.g. Surfing, skiing etc), online channels, interest groups and clubs, cinema
Marketing Opportunities: Adventure and sports product, youth/sporting/adventure events, urban product, wellness
Embracing LifeSize: 11% of the adult population
Demographics: Middle age groups, families with children at home, male bias, high income, under-represented in North Island towns
Travel: International (=), domestic short (+), domestic long (=)
Key Interests: Cycling and mountain biking, hiking and tramping, kayaking, boating for fun and all types of fishing, live sport, home renovation and entertaining at home
Priorities: Raising family, personal relationships, building career/business, building assets, travel, spending time with family and friends, reducing debt
Travel Interests: Outdoor and nature-based experiences, scenery and landscapes, culture and heritage, food and wine (all shared with friends/family)
Key Destination Characteristics: Family-friendly, relaxing, romantic
Travel Barriers: Annual leave, work commitments, care responsibilities, suitability for children
Marketing Channels: Business media, special interest media/online (e.g. golf, outdoor, boating, fishing etc), newspapers, boating/fishing/outdoor events/shows/fairs
Marketing Opportunities: Outdoor/adventure experiences for the whole family, food and wine product, cultural product, heritage experiences
Are you “Embracing Life” or “Getting Ahead”? Case Study of Domestic Travel Segmentation
Todd Nicholson