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Introduction Of Tourism In Australia

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Discuss about the Segmentation of Target Market and Design of Servicescape.



Introduction: Tourism in Australia

The main purpose of the marketers is to identify the target market that will help in selling the products and services in an easy manner. Moreover, the identification of a proper target market will help in an internal context will help the products to be identified by the customers easily so that the organization can maximize its profits. Marketing in a chosen location can be done by identifying the segment of customers that will be interested in purchasing the products and it is the first stage for a marketer to enhance its activities in an efficient manner. The tourism industry in Australia is huge and employs nearly 5 percent of people in it. The export earnings from this industry have increased to 10 percent because of the care that it taken of the tourists when they visit the country. It is also seen that majority of the tourists are from China and has surpassed the United Kingdom with respect to tourists. The tourism industry also is benefitted from the backpackers, as many youngsters from the United States and United Kingdom comes to the country and spends time in touring the country (Athanasopoulos, et al., 2014).

The aim of the present report will be as follows:

  • To identify the target market and segment it accordingly so that the hotel can attract the customers
  • To come up with competitive prices so that it can have an advantage in the market
  • To train the employees in the best possible way so that the hotel can provide premium services to the customers

Suggested destination

The destination chosen for the hotel is the suburb of Sydney. This is because the city’s tourism is an important part of its economy. It is among the 50 most-visited cities in the entire world (Maitland& Newman, 2014). Among the most famous attractions are the Sydney Opera House, the Harbour Bridge, Luna Park, Royal Botanical Gardens, and the Bondi beach. The beaches are the main attraction of the place, and thus, a hotel on the suburbs of the city would be a great choice, as the beaches like the Bondi are all located in the surrounding suburban areas of the main city. The Wildlife Zoo and the Taronga Zoo are also close by, and this will make the business a profitable one, as the location will be ideal for the tourists.

Theoretical foundations

Theory of segmentation

The market segmentation theory deals with the interest rates and yield curves, and suggests the idea that there is no fundamental relationship between the short-term and long-term rate levels (Gordon, et al., 2015). The most important conclusion that is drawn from this theory is that the yield curves are set by the supply and demand forces in each of the separate markets, and this yield for one category cannot be used to predict the yield of another when the security markets are different.

This theory further states that the buyers and sellers who constitute the market for the short-term securities are different from the ones that invest in long-term securities, and thus, the two cannot be interchanged.

The process of segmentation involves breaking down the target market into smaller units on the basis of their demographic, psychographic, geographic or behavioural characteristics. The behavioural aspect of segmentation lays emphasis on how a product is utilised, while the demographic aspect takes into consideration the gender, age, ethnicity and income status of the market segment, as these factors affect the rate of purchase directly (Dolnicar, et al., 2014). Geographic segmentation identifies the places where the prospective customers or clients are situated, and the psychographics focus on what the consumer considers most important in their lives, such as their opinions and values.


Target market and positioning

For the evaluation of each segment, the potential and commercial value or attractiveness of each part is to be considered in the case of target marketing (West, Ford& Ibrahim, 2015). Below is the list of requirements for the evaluation:

Money: The profits should exceed the investments of the marketing plans and other modifications.

Criteria size: The market size should be able to justify the segmentation, and therefore, it should not be too small.

Accessibility: The different segments should be accessible to the concerned teams, and they must be able to receive the marketing messages.

Difference: There must be a clear line of difference between the various segments.

Focus on benefits: The range of benefits accrued by the different segments must not be the same; they must be different.

Positioning takes into consideration the views of the consumer regarding the final service or the product. This is done in comparison with the competitors to assess the market advantage the company has (Filistovich, Dalisova&Stepanova, 2016). The three main kinds of positioning are functional, symbolic and experiential.

  • Functional positioning focuses on those characteristics of the products or services which can help to fulfil the needs and requirements of the consumers.
  • Symbolic positioning considers those aspects of the company or brand that meet the consumer’s self-esteem.
  • Experiential positioning is concerned with the emotional connection of the consumers with the particular brand.

The overall aim of positioning is to ensure that the consumers get more value from the company than their competitors and that they convey this message to their clients in an efficient and successful manner (Hollensen, 2015).

Service marketing (defining elements of a servicescape)

The simplest definition to service marketing would be that it is the process of promoting the economic activities to the clients of any company or business. It involves marketing that is based on values and relationships, and can be utilised to market a product or service (Nilsson& Ballantyne, 2014). The different characteristics of any service, such as intangibility, perishability, heterogeneity and inseparability are the aspects that make the marketing of a service different from that of a product. On the other hand, a servicescape is defined as the elements and the physical environment of any service organisation where the consumers get the experience of the service (Johnstone, 2012). The numerous elements could be along the lines of colour, music, layouts or designs. From the strategic point of view, it is useful to perceive and consider the different roles the servicescape has and their level of interaction as well, and it is also important to understand as to why the effects take place and what the steps to manage are (Dong & Siu, 2013). The important roles of a servicescape are mentioned below:


Package: The servicescape presents to the consumers the external image of the service’s internal contents. This is important as forming a good or positive impression in the minds of the consumers is necessary to promote the marketability of the services of any organisation. This is because the customer expectations need to be met, and it is a sort of visual metaphor that represents the service, which is essentially intangible.

Facilitator: A servicescape sometimes acts as a facilitator and helps in the performance of the people in the environment. The design of the setting can improve or deteriorate the efficiency of the flow of activities in the service setting, and thus make it easier or harder for the consumers and the employees to achieve their goals or targets. A facilitator with a good design can help in making the experience of a service extremely pleasant for both the consumer and the employee. However, a poorly designed facility can frustrate both the parties (Oliver, 2014) 

Socialiser: A servicescape design helps in the socialisation of the consumer and the employee as it conveys expected roles, relationships and behaviours between the two parties. The facility design can also convey to the consumer what their function is with respect to the employees, and what areas they are welcome in, with guidelines for their behaviour in the suggested environment, including the kind of interactions that are tolerated in any given setting.

Differentiator: The physical design of the facility helps to differentiate a firm from its competitors and speak out to the intended market segment in an efficient manner. This is important especially for the hotel industry as they may have several possibilities in the case of dining, each of them different in their design.

Hotel design

Description of tourist area

The tourist attractions in an near Sydney comprise of the Opera House, the Harbour Bridge, the Featherdale Wild life Park, Wild Life Sydney Zoo, the Taronga Zoo and the Bondi beach are the major attractions of not only Sydney but of Australia as well (Beeton, 2016). Therefore, the location should be at such a place where the conveyance to be carried out by the tourists to such places are convenient yet things are easily available. The main town is too crowded for setting up of the hotel. Therefore, the area near the suburb along the way to Bondi Beach will be the best option.    

Keeping all these things in mind a conclusion can be drawn regarding the area of the hotel site to be North Bondi (Davidson, Smith, & Bondi, 2012). North Bondi is a small suburb seven kilometres to the North of Sydney. It is one kilometre away from the Bondi Junction. North Bondi is moderately populated and has a countryside setting unlike that of proper city of Sydney. The tourists who want to be away from the crowd yet avail modern infrastructure can be welcomed here at ease. Ben Buckler is the most juiciest position to start a new venture of the hotels (McCaroll, 2016).

design and marketing strategy

The most important aspect of the hotels are their design and the marketing atrategies. The following paragraphs deal with the design and the marketing strategies of the hotels.

Market segmentation

The market is segmented based on various factors such as gender, which helps in distinguishing the percentage of males and females who are interested in purchasing the products and services that are being offered by the company. It is also important to take the factor of age and income in to consideration, as it will help in targeting the customers who are willing to pay the amount that has been demanded in availing the services of the company (Dolnicar et al., 2014).


The market is also segmented based on the psychographic, behavioralistic and the geographic location of the hotel. It is seen that in the psychographic segmentation, the customers are willing to adapt the lifestyle that is present in that locality. This will help the company in identifying the group of interested customers for availing the services of the hotel. The behavioralistic segmentation depends on the loyalty of the customers. The hotel needs to offer premium services so that the customers can return to them when they visit the beach again in the future.   The geographic segmentation will help the hotel in adapting to the lifestyle that is offered to the customers when they are at a beach so that it can attract most of the customers towards it (Horner, 2016).

Bondi Beach is popular among all the groups starting from children to that of old people. The most susceptible group is the one ranging from 26 to 45. This is because these people are willing to pay the amount that is required by the company so that they can enjoy the products and the services that are being offered by the company. The hotel needs to offer the products and services in such a way that the customers get a competitive advantage over the other hotels that are present in that area.

Target market profile

Most of the hotels in and around Sydney are very costly to stay. The hotels around Sydney target the holidayers along with the rich and the affluent people. Markets in and near Bondi can target the backpackers and the people with a moderate budget (Johnson, 2016). Thus, the main targeted market profile is the young and the people with a low budget.  The hotel can make a profit with the increase in the number of footfalls gradually with the common and frequent visitors being the backpackers.  


Figure 1: Servicescape of the proposed hotel in North Bondi

(Source: Nilsson & Ballantyne, 2014)

The servicescape aims to provide new dimensions to the hotels that would attract the customers and give the desired feedback from them.

The first service that comes to a customer’s mind is the ambience. A hotel with a new and innovative ambience is bound to attract more people than one without it. The seating arrangements should be in such a way that maximum number of people can be adjusted with ease.

The hotel should be easily accessible through roads and there should be good communication pattern. The hotel should maintain its cleanliness and hygiene.

The customer should be able to relate to the hotel and be alert in a cognitive way to give the reviews. People should be made to feel at home when they are welcomed.

The hotel should be so hospitable in their behaviour so that people are satisfied by their hospitality and will rethink to visit again.


The price of the hotel should be made reasonable for all age groups and yet make profit so that the customers can avail the products and services that are being offered by the hotel. While setting the prices, it should be taken in to consideration that the hotel can have a competitive advantage over the rival companies with respect to price. This will ensure that there is fair competition that is existing within the market (Gustavo, 2014).

Promotion and positioning statement

As a new hotel, the promotions should be catchy and well defined with a tagline. The TV and the banners should span advertisements throughout the length and breadth of the country. Moreover, it can reach out to the global forum by the help of the social medias as well (Juris, 2012). The use of promotional activities will help in attracting the customers so that they can come and try the products and services that are being offered to them by the company.

The hotel will position itself in the ‘high quality, low price’ sector of the positioning map, as it is a new company that is being developed in the market. This strategy will help the company in attracting the customers and evaluate the services that are offered by them.


Staff training and processes

The main goal of the hotel trainees is to maintain the good image of the hotel once they become the staff. Suitable training resources should be applied to train the personnel and please the customers. Modernised training resources are to be applied with a minimum of 2 month training. Progress should be tracked in both ways and good communication is required with a feedback (Tavitiyaman, Qiu Zhang & Qu, 2012).


Therefore, from the above discussion a conclusion can be drawn that Australia is one of the major growing tourist sector. A new hotel is being proposed at North Bondi a suburb around Sydney. With its distinct location and other striking features, it will become one of the major tourist hotspot in a few years. The hotel needs to segment the market so that they can identify its target audience, which will help them in increasing their profits. The prices of the services and the products need to be kept competitive so that the level of competition can increase within the area, which will help in diversifying the customers in to different choices. The company needs to adapt suitable promotional strategies that will help them in gaining maximum customers by using the online and the print media in a beneficial manner. The staffs need to be trained in a proper manner so that they can serve the customers in the best possible way so that the customers may visit the company when they come to the particular location. This will help in ensuring that the company among the customers keeps the goodwill intact.



Abbas, M. Y. (2012). Children, youth & environments (CYE): Lessons for developing countries?. Procedia-Social and Behavioral Sciences, 38, 15-22.

Athanasopoulos, G., Deng, M., Li, G., & Song, H. (2014). Modelling substitution between domestic and outbound tourism in Australia: A system-of-equations approach. Tourism Management, 45, 159-170.

Beeton, S. (2016). Film-induced tourism (Vol. 76). Channel View Publications.

Davidson, J., Smith, M. M., & Bondi, L. (Eds.). (2012). Emotional geographies. Ashgate Publishing, Ltd..

Dayour, F., Kimbu, A. N., & Park, S. (2017). Backpackers: The need for reconceptualisation. Annals of Tourism Research.

Dolnicar, S., Grün, B., Leisch, F., & Schmidt, K. (2014). Required sample sizes for data-driven market segmentation analyses in tourism. Journal of Travel Research, 53(3), 296-306.

Dong, P., & Siu, N. Y. M. (2013). Servicescape elements, customer predispositions and service experience: The case of theme park visitors. Tourism Management, 36, 541-551.

Filistovich, A. S., Dalisova, N. A., &Stepanova, E. V. (2016). The Strategic Positioning Of Production Enterprises. In ????????????????????????????????????????????? (pp. 194-196).

Gordon, R., Butler, K. A., Magee, C. A., Waitt, G. R., & Cooper, P. (2015). Using value theory for segmentation in social marketing.

Gustavo, N. (2014). From e-tourism to i-tourism: trends in marketing of tourism services. Revista Turismo & Desenvolvimento, (21/22 Vol. 2), 161-171.

Hollensen, S. (2015). Marketing management: A relationship approach. Pearson Education.

Horner, S., 2016. The Future of Market Segmentation and Relationship Marketing In The Tourism And Hospitality Sectors. Atna Journal Of Tourism Studies, 1(1), pp.1-14.

Johnson, S. (2016). Playing for Both Sides: Love Across the Tasman (Vol. 47). Bridget Williams Books.

Johnstone, M. L. (2012). The servicescape: The social dimensions of place. Journal of Marketing Management, 28(11-12), 1399-1418.

Juris, J. S. (2012). Reflections on# Occupy Everywhere: Social media, public space, and emerging logics of aggregation. American Ethnologist, 39(2), 259-279.

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Nilsson, E., & Ballantyne, D. (2014). Reexamining the place of servicescape in marketing: a service-dominant logic perspective. Journal of Services Marketing, 28(5), 374-379.

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West, D. C., Ford, J., & Ibrahim, E. (2015). Strategic marketing: creating competitive advantage. Oxford University Press.


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