This paper discusses the dos and don'ts of market segmentation analysis. Market segmentation analysis is younger than the journal Tourism Review, but nevertheless has a rich history in tourism research and continues to be extensively used by both tourism researchers and industry.
After a brief overview of the origins of market segmentation analysis and its uptake in tourism, a number of key considerations are discussed, which are critical to ensuring that practically useful and reliable market segments emerge from the analysis.
Do accept that market segmentation is exploratory. Do spend a lot of time ensuring you collect high-quality data. Don’t use ordinal data. Don’t use correlated variables. Do ensure your sample size is large enough. Don’t use factor-cluster analysis. Do conduct data structure analysis. Don’t complicate things.
This is a perspective study; it offers a concise discussion of key issues in market segmentation analysis and directs the interested reader to resources where they can learn more about each of these issues.
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