MARKET SEGMENTATION OF TOURISM INDUSTRY IN SINGAPORE

Abstract

"To see a world in a grain of sand; And heaven in a wild flower." ---- William Blake 'Travel and Tourism is the world's largest industry, and the world's largest employer. It creates numerous jobs and wealth.' (World Travel and Tourism Council). The importance of the tourism industry is clearly reflected in its economic significance in terms of revenue, employment and foreign exchange earnings. Given that today's tourists vary in terms of culture, lifestyles, income levels, behaviour as well as needs, the tourism industry has to develop and improve its marketing strategies so as to cater for the various visitors' demands. Although there has been much research conducted to segment the tourism market, few local studies have examined the tourism industry in a broad and practical perspective. Hence, the primary aim of this study is to analyze the ''macrosystem" of tourism in Singapore by a two-stage market segmentation approach. The segmentation variables of 'geography' and 'purpose of trip' would be highlighted as the primary bases of market segmentation so that the resulting sub-markets can be targeted more easily. The study found that our neighbouring countries in Asia had accounted for most visitors in terms of arrivals as well as expenditure. Using the purpose variable, we found that while the business segment had registered healthy growth in the past five years, the holiday market had accounted for most visitors to Singapore. By further segmenting these submarkets with other variabl.es such as frequency, income, age etc., smaller secondary segments were attained. With the second-stage segmentation, the characteristics of the primary sub-markets also became better defined, thus providing us a more profound picture of the tourism market in Singapore. Various implications and means to access the markets would be presented based on the segmentation findings. Tourism products as well as promotional tactics may be improved to serve various visitors with differing needs. In particular, segments with differing contents of package visitors as well as repeat visitors can be targeted in a different manner. Services and advertisements can also be designed in accordance to the various products sought by the tourists, as well as the motivational factors that had driven them to visit Singapore. In addition, the methodological framework presented in this study is an important model for effective segmentation of the tourism market. Furthermore, the study provided a platform for discussion on the selection of various segmentation variables, as well as how refined segmentation should be carried out in the real world. In particular, various conditions such as accessibility and measurability should be taken into account in market segmentation. For results to be meaningful, more than a single-stage segmentation should be utilised. Lastly, due to the dynamic and multi-faceted nature of the tourism industry, segmentation findings must be evaluated and re-appraised continually in order to design and develop an effective marketing mix for the tourism market in the future.