Market Segments Targeted by Sephat
Sephat Tours needs to provide groups as well as individual travel so as to leisure clients. Products and services by Sephat Tours include custom packages, travel consultations, pre-arranged tours among other related services. For the company to grow it is important for the company to expand the quality of services offered and to apply a good marketing strategy. The company should also add leverages through establishment of various representations and relationships (Kevork & Vrechopoulos, 2009).
The organization is a privately owned limited company that is united by Companies Registrar. It is solely owned by Botswana Film.
There are four market segments that would be targeted by Sephat Tours. Since there is increase of tourism with wider preferences and the availability of competitive options, more segmentation would be very critical for the marketing plan of the organization. The company should in fact launch products while keeping in mind the segmentation.
There are ways in which Sephat Tours tourism can satisfy the customer needs. Though, for the company to decide their wants, needs and demand, it must do segmentation first. To carry out segmentation the first step is to define the type of customer that will prefer the company products. Obviously, the customer will be from the targeted segment. Who would need the products and if they would be from the company’s targeted segment. Who would need the product and if its falls in the wants segments. Once the company have decide on the products and services it will offer, then it will decide on the segmentation to use (Hua, 2016).
The following are the type of segmentation that would be applied by Sephat:
- Demographic segmentation
Demographic segmentation would have the following variables
- Age – The product and services offered will be according to the age of the customers
- Gender – Services that would be offered to male would not be the same as that of women
- Buying behaviour- Some customers would like to spend while others would spend little, classifying them accordingly will be an advantage to the company#
- Nationality
- Income – Income of tourism will differ in many ways, it is important for the company to segment markets according to the income because it affects the buying behaviour
- Psychological segmentation
This type of segmentation uses the life style of people, their interest, there activities or opinions. Application of psychological segmentation would be advantageous to the company because it will cover the lifestyles of people.
- Geographic segmentation
This type of segmentation will divide people in the basis of geography where they are located .For example people who reside in municipal areas will need RO purifier for water whereas those found in the municipal areas will need UV purifiers. Therefore the need will vary according to the customer location (Gursoy, Kiliç, Öztüren & Rezapouraghdam, 2018.).
The company’s market strategy will be based on provision of the right services to the selected target market. The company would need to ensure that the prices that would be set would be set would consider the people’s budget and consider the organization as well. The marketing strategy that would be adopted should covey a sense of quality to our potential customers in every publication, every promotion and every picture. Our main purpose will be to target groups and individuals that are looking for areas to visit and leisure activities. The company will need to focus its marketing message and its service offerings. We will need to service offerings and marketing message (Ryan, 2015).
Market needs
Although the tourist sector has gone through a rapid growth over the last few years, most of the terrorist that enters the sector have gone to the North where Okavango Delta and a national park is located and other points of attraction sites. Very few companies have focused on central and south Botswana. Having this in mind, we need to exploit the unreached market in the area so as to provide our clients with good services and help us realize our core business objectives (Cho, Woods, Jang, Erdem, 2009).
Target Market Segmentation Strategy
Market trends
Although there is uncertainty that surround this type of industry, there is one fact ‘tourism is there to stay’. The only thing we need to ask is the extend at which the tourism industry will reach and whether it will sustain or exceed the growth rate. As the size of the market expand , the Sephat Tours strongly trust and believe that the travel will be a crucial element of the market place.
The statistics for tourism show an unfailing to the market size. The latest tourism statistics done in the year 1998 was a total of 1351798 which represents 12.5% increase from 1997.
Analysis of business
Potentially Botswana is one of the richest countries in natural resource. The industry of tourism is increasingly becoming an importantly player in the current economy and may in future be more treasured than the mineral resources in terms of revenue generation. Having this knowledge in mind the company need to provide mobile services that are directed to tourist so as to contribute to the role of tourist industry developments.
Service distribution
Mobile operations like that of Sephat Tours are mainly promoted orally and through referral with previous experience and relationships being an important factor. Relations means the establishments of links with travel agencies, hotel and lodges who usually contact with the company’s target customers. The experience which our customers will have on us will help in influencing them to refer their friends to be our customers. To enhance this the company need to provide a comfortable and luxurious experience that would be unforgettable to them. This will make the customers to share a good word about the company.
The company should also thing of connecting the company to World Wide Web that will enable it to market the product and services on the internet and also to enable customers to do Pre-booking on the Web. This will make will help our customers to save on money and time. It will also assist in widening the catchment area for our customers.
The buying patterns and competition
The crucial element in the utilization of service decisions that are made at client level of the company is the reputation trust and the firm reliability. The most vital part factor in this kind of market will be the places of outing and the quality of service. The interests of groups and individuals should be considered because the customers always intend to see as many places as possible. The nature of our company’s service dictates that our pricing will vary according to distance because clients decide to tour different within a specific time frames.
Segmentation is a technique that would be used to reduce a large market into a narrowly define market group. There are a number of strategies that can be used to identify type of market segmentation. This process of classifying and targeting the distinct segments of the customers has got important benefits in promotion. The purpose of market segmentation are as follows: (Huerta, Muñoz,Ríos & Ruiz, 2017).
Market Needs
Markers recognize the peoples’ feedback through communication. The more tourist the company will try to send a message to, the more the company will have vulnerable to miscommunication, complete avoidance and inattention. By segmenting the customers into small groups with similar traits, the company will be able to disseminate information to a manageable group.
Once the potential segments have been identified, the company will need to decide the market to target using a specific marketing campaign. By defining the market segments the company will need to figure out the type of media that is used mostly by its audience. It is also necessary to figure out types of messages to use and the budget that would be required (Wang, Cole & Chancellor,2016).
Another purpose of segmentation is to help in reducing wastage. While advertising wastage would be realized when the ads sent for the product or service have no interest or wants to their target consumers.
The major purpose of segmentation is to focus the message. In some other cases, a product would be used in many ways and may offer multiple benefits which will appeal different methods to different customers.
- Determining the wants of the segments-This first stage involves finding out what the customer needs are. Customers are grouped based on their needs, placing the ones with similar desires together. The idea is to implement a classification strategy based on the consumption of the consumers or clients. That is, what would each of the company’s client like to have? In this case, Sephat Tours Company may identify certain needs by their consumers such as; the need of a touring company that offers tours around the city allowing tourists to explore the city’s spectacular culture and history (Venter, Wright & Dibb, 2015).
- Identifying the segment-The second stage of market segmentation involves narrowing down to the particular clients that the company targets based on the needs identified from the previous step. The “who” we want is stipulated in this phase. Sephat Tours for example could identify previous clients who have toured other parts of the country as their target consumers to tour the city. This may be attributed by their desire to learn more about the country.
- Identify the most attractive segment-The step that follows next approaches the targeting level as a company selects the most attractive segment for them. Out of the segments identified, some will have to be left out if they seem unprofitable after analysis. Competition is a primary factor while considering the attractiveness of a segment. If a consumer segment appears to be highly competitive, then it is best to leave it out as it is not attractive at all. Sephat Tours will need to pick customer segments that are highly demanded and with minimum expenditure to meet their needs (Plank, 2015).
- Determining if the segment is giving profit- After determining the different types of segmentation, the next step is determining the segments that are most profitable. This is another phase that narrows down further the target consumers in the segmentation process. For example, Sephat Tours may identify the consumer segment that is mostly demanded but may be costly in implementing reducing their profits. On the other hand, the most profitable package in their tours may not be on high demand (Cross & Belich, Rudelius, 2015).
- Positioning for the segment- Positioning the products in the mind of consumers is the step which follows next after determining the most profitable segments. Basically, the company requires to assign a value for their products. If the company wishes consumers to purchase their products, then they will need to determine the value that the consumers get from buying their products. In the case of Sephat Tours, Consumers’ mind-sets on the company’s brand and products based on their experience after acquiring their service will be determined by how the company position their segments’ mind-sets.
- Expanding the Segment- All segments should allow for expansion. Once the company identifies a suitable consumer segment, it should be able to grow in scalability in terms of business. If the segment is very niche, the business will come to an end in due time. Sephat Tours hence needs to research on ways to improve their profitable segments identified to ensure they accommodate more consumers and runs for long periods without being irrelevant.
- Incorporating the segmentation into your marketing strategy- After identifying the consumer segment that is expandable and profitable, the final step is implementing it in the marketing strategy of the company. This involves adding or adjusting the existing consumer segments to include the new venture. For Sephat Tours, incorporating new touring packages may need the management of the company to do away with previous ventures to be able to meet the needs of the new customer segment.
Since the company today is experiencing a fast growth of incomparable nature due to macroeconomic policies and the reduction of foreign exchange regulations towards enticing foreign investors. The fiscal and monetary policies would be geared towards upholding growth with social fairness that will highly contribute to the growth of the company (Schuckert, Liu & Law, 2015).
The current emphasis and drive by the government of diversifying the industrial base far from minerals sector reflects an opportunity towards the achievements of this goal. Having carried out comprehensive and thorough research on the market of this company, I realized that there is need for a company to transport tourist that will focus on providing vacation trips to tourist. Although mobile operators are currently in the market, I believe that there is a need for a market that provides enjoyable and comfortable transportation services to visitors and tourists. This is also a consideration of the fact that Botswana is potentially rich in natural resources. The industry of tourism is becoming very crucial in the economy and may even prove valuable in future than the mineral resources in terms of revenue (Leung, Xue & Bai, 2015).
The company need to be aware of the fact that operating in this sector depend highly on good networking , the will need to establish strategic and networks associations with various travel agents, hotels, travel agents and lodges in order to ensure that the company has consistent flow of clients. Though, for the company to do that, the company will need to ensure that the services provided to their clients is high quality and ensure that the client is comfortable. Our target share would be 20% of the market and we need to focus mainly on Southern Botswana and Gaborone area.
We will appreciate to enter such market, but we need to understand that it isn’t ‘bed of rose’ and the company will need to establish string links with a number of strategic partners. Hence the company will need to implement a very aggressive market strategy that should be supported very well by business functions.
Market Trends
Keeping the comfort of tourists to be a priority, the company would be designed and maintained as per the expectations and standards of the customer. There is need to offer facilities such as churches, schools and sports among other activities. The company intends to offer the following services: (Xu & Gursoy, 2015)
- City Tour- This will be a guided tour in the city centre that goes along: Finance Mall, The National Museum, The City council Library, The House of parliament among others. This would be appealing to the tourists. Included in the services above would be refreshments and information wallets containing the Gaborone history and the main sites. The tour covers an area of nearly 50 kilometres (Ramanathan,2010.).
- Cultural tour- This is the combination of city centre tour and the cultural tour it will be marketed as Total Package which will enable tourist to appreciate the life style of Botswana. This package would involve guided tour, information folder, picnic lunch and refreshments (Rate, Ballantyne, Kerr & Moutinho, 2017.).
The company intends to enter a lucrative market in the fast growing economy. The company needs to foresee its strength in providing services to the tourists if it is looking forward to penetrating the market, the following is the summary of strengths, weakness, opportunities and threats for Sephat Tours (Law, Buhalis & Cobanoglu, 2014.).
- Diversification of client base- This will assist the company in reducing dependency on one market.
- Combination of employees skills- The company director intends to engage very qualified and experienced employees to develop strategy and long-term plans for business with the main intention of attaining the objectives of the company.
- Robust advertising and marketing- The Company will carry out broad advertising and marketing that will promote both the name and product/services awareness. Hence a focused and aggressive promotion campaign with clear strategies and goals will be our mainstays.
- Lack of reputation when compared to our competitors. This is because of the fact that our company is still new in the market.
- The introduction of new personnel and new practices in the organization is a challenge to an organization
- The company has a limited base of finance when compared to other players in the industry
- The company does not have clear strategies.
- The plans by the government to encourage the participation of local entrepreneurship sector is an opportunity to the Company which it will fully utilize.
- Currently reliable transportation organization to take care of tourist does not exist
- The trend of international tourist shows that nowadays most travellers need more heartening experience than what ‘’sun and sea’’ provides.
- The current growth in the tourism sector may result to an increase in the number of organizations entering the market. This will lead high competition that comes from variety of emerging firms in the tourism sector
- Established transport agencies, lodges and hotels will look at the growth of new lines and to integrate transportation to provide extra services to the customers.
The key to success for Sephat Tours would be very effective market segmentation via identification of many niche implementation and market strategies. For the company to increase sales, I recommend it to implement advertising, direct marketing and personnel selling to the targeted market that has been identified in the report. The company’s marketing strategies will revolve around keeping in touch with travel and hotels consumers. The company would need to concentrate very well in advertising in order to achieve its key success factors.
References
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