A Procedure for Target Market Selection in Tourism

The primary objective of this research was to evaluate the attractiveness of travel activity segments to assist with target market selection. Prior studies evaluating segment attractiveness have used ranking systems to determine the best markets. However, due to a lack of precision in these ranking procedures, they have not effectively reflected the degree to which one segment is more attractive than the others. This research attempted to provide more quantifiable and sophisticated evaluation criteria. Using mean expenditure, expenditure risk, segment size, and segment size risk as the evaluation criteria, the resulting segments were assessed and compared. Three risk-adjusted indexes were also introduced to simultaneously consider expenditure level, market segment size, market potential, and risk in the process of segment attractiveness evaluation. The target market selection procedure suggested should be helpful to marketers who are most concerned with the market and economic potential of available travel segments.