February 2005 Chadwick Martin Bailey Travel & Hospitality Ezine
Target Marketing - Who's doing it to whom? Why? And what's next?

More than ten years ago, we were writing and reading articles on the Death of Market Segmentation and the promise, born from customer databases and CRM technology, of Marketing to the Individual. While one-to-one customized marketing has made great strides in the last decade it has not and may never replace the need for careful selection of the group on whom you will focus your attention, resources and communication efforts. Target marketing, the selection of market segments with high potential, continues to be a useful strategy for marketers and developers.

For a hotel or hotel brand, selecting a target market segment is a useful activity for the focus it brings to the business and market strategy, helping:

• Managers identify and prioritize hotel and in-room products, services and amenities requiring change and improvement
• Ad agencies develop marketing communications (message and vehicle) that resonate with audience needs and consumption
• Developers select sites that target guests are more likely to visit and brands that are built for/marketing to that segment.

Expanding on the last point, matching the hotel to the target is easier for hotel marketers than it is for say, consumer packaged good marketers. Think about batteries: how would you differentiate the consumer target for Duracell from Everready? For a hotel, some aspects of target market selection are clearly pre-determined; all you have to do is recognize and align your selected target market with:

• Your hotel price point and associated amenities this may place you in a budget or luxury category.
• Your location (resort or airport) this will determine if you will focus on business or leisure travelers.
• Your parent brand if you are a Hampton Inn, the corporate marketing has helped to define the target to differentiate your hotel from competitors in the same price range.

The target marketing challenge of equal difficultly for all types of marketers is avoiding product-focused marketing and marketing communications. Brand marketers may give lip service to being customer-focused, but most have been and continue to be product-oriented, planning and communicating from the inside out, delivering the message they want to deliver instead of responding to what customers might want to hear. Brand managers need to not only recognize the value of starting with the consumer and then adapting and communicating to what they want or need to know they need to do it.

Think about it: You offer Complimentary Breakfast

Building to targets/market segments

For developers, leading hotel families like Marriott, Hilton and Intercontinental offer a portfolio of brands that enable you to select a brand based on cost of investment as well as one that addresses the target of interest or one that fills gaps in market coverage (e.g., lack of an extended stay hotel in Northbrook, IL).

Brand marketers at the hotel families must work to ensure that their products are differentiated from siblings and from competitors and that their brands continue to speak to the needs of their target customers.

Marketing to target segments

Some leading brands have highly visible marketing and product development programs aimed at selected target segments. Lets look at the execution of a few of them.

Wyndham: Wyndham focuses on female business travelers as a key target. On their website, they point t From healthier room service options to designing the Wyndham ByRequest program, Women on Their Way is changing how women business travelers spend their time on the road. Wyndham has improved their both their amenities (e.g., adding skirt hangers) and services (receive a call telling you room service is on the way no more wondering who is knocking at the door) to cater to the needs of the target market.

Holiday Inn Select: Mark Snyder, senior vice president of brand management for Holiday Inn is relaunching the Holiday Inn Select brand as the first hotel chain to meet Gen Xers expectations by providing the comfort and conveniences of home in a hotel experience. In recent articles in USA Today and the Wall Street Journal, Snyder describes the research that pointed to the Gen X opportunity: Fastest growing segment in the travel industry (The New Lodging World, D.K. Shifflet & Associates, 2004) and helped his team reposition the brand and its amenities and features by focusing on the business and lifestyle needs of Gen X travelers. Communication on the target customers needs will serve as a foundation for marketing communications while changes to the brand (of value to the Gen X target) are made. Changes include: free HSIA in guest rooms, meeting rooms and public spaces; branded (Wolfgang Puck) coffee, enhanced bedding and showers and a partnership with FedEx Kinkos Online DocStore.

Ritz Carlton: According to Ivo Raxa, author of the book, Heads in Beds: Ritz Carlton is internationally recognized as a symbol of first-class service and accommodations. It is a textbook study in focused branding for a luxury product: It maintains excellent standards. Its portfolio is consistent. Its positioning is focused. And its communicated message is clear.

How to develop a customer-focused target marketing strategy

Asking questions of and listening to those in the target and then continuing to evolve and improve the targets travel experience -- is essential. Wyndham has a womens advisory board and frequently conducts research with female business travelers. Results from the studies are used to improve amenities and services, posted on their website and included in the Women On their Way Travel newsletter. Fred Kleisner, Wyndhams CEO describes the activities on Wyndhams web site: Our womens advisory board has a six-year history with Wyndham now. Our top executives meet with the board twice yearly. The dialogue with women throughout this Web site, along with the advisory board input, are responsible for motivating us to make major changes in our brand that benefit not only women, but also all travelers. The Women on Their Way program is responsible for creating a dynamic dialogue with women business travelers.

Below is a list of questions that a hotel marketer should be able to answer about their target. Finding differences between your target and other groups can provide additional rich insight.

Answer the Following Questions: How does this group perceive _____ (your category) hotels? What do they buy now? How do they book and use the product?   Lifestyle, psychographics, attitude toward travel and hotels Unmet needs what does the group want from the product category that theyre not now getting?

Value of a more targeted marketing strategy

A customer-focused target marketing strategy will add cohesion and focus. You can identify and prioritize product enhancements/investments based on their appeal to your target, you can refine and extend services that are meaningful and distinct and speak to your target in a way that reflects your careful study and focus. A target market strategy, therefore, can serve to solidify a focus for the brand, aligning investment, decisions around hiring and training and market communications and advertising. The focus will help you spot trends. By executing in this fashion you should develop a stronger connection with your target than your customers because they should feel like youve built this for me. As Courtyard has claimed: Designed by Business Travelers for Business Travelers. Maybe the promise of one-to-one marketing will play out in our lifetimes&. But in the meantime, fine-tune your strategy by enhancing your customer-focused marketing to high potential target segments!