Management learning exercise and trainer's note for market segmentation in tourism

Purpose - This paper aims to show how researchers can develop learning exercises for training analysts and executives in market segmentation techniques.Design/methodology/approach - The empirical example of a tour operator specializing in adventure tourism is used as an illustration. Segments are constructed on the basis of tourists' stated willingness to pay a price premium for certain aspects of the tour. Stability analysis is conducted to choose the number of clusters, topology representing networks are used to construct segments and Bonferroni-corrected chi(2) tests provide insight into the external validity of segments.Findings - Four market segments are constructed which differ significantly with respect to external variables.Research limitations/implications - Market segmentation can be used by any entity in the tourism industry to select a suitable part of the entire market, customize the tourism service to suit such a segment, and spend marketing budget more efficiently by using communication channels and advertising messages most effective for the selected segment.Originality/value - Market segmentation provides managers with insight into market structure. Knowledge about the market structure, in turn, is the basis of successful strategic planning. While the concept of segmentation is not new, each application is unique to its context. The present paper focuses on price premium segments in the adventure tourism context