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BSBMKG507A Interpret Market Trends

and Developments
CASE STUDY
1. Identify market research needs

2. Define market research objectives

3. Define data gathering approaches

4. Interpret trends and market

developments
5. Analyse qualitative results

Mark Boer
30/07/2012

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Table of Contents: Page

Introduction 3

Section One: 5
What segment of the overall tourist market is
the best focus of marketing efforts?

Section Two: 10
What are the media habits and sources of information
of the segregated market segment?

Section Three: 13
What information can be obtained
from the market segments previous purchase preferences
in order to accurately describe their present wants?

Section Four: 19
What criteria or bases are used by the market segment
in arriving at their decisions
to purchase vacation and hospitality services?

Conclusion 21

Reference 23

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Introduction:

Springhill Country Guest House consists of hotel, guesthouse, and conference facilities less
than an hours drive from the Gold Coast, located within the general region of the
Hinterlands rainforest areas. The property is situated inside six acres of orchard and tropical
forest, maintained and managed according to international standards of hospitality and
excellence. Catering to both casual tourists and corporate functions, Springhill has
managed to consistently garner a 65% rate of occupancy and utilisation for its overnight
accommodation and conference rooms over the relevant financial periods.

While such a rate of occupancy and utilisation has so far ensured a satisfactory profit margin
for the business, the Springhill management team has decided to push for an even higher
ratio of occupancy in order to further elevate revenues. The management favours the idea
of attracting a bigger number of overnight casual visitors instead of increasing the patronage
of business clients, since the team is convinced that the casual tourist market holds more
potential and profitability in comparison with the corporate market.

Upon examination of this business strategy, the Springhill management has recognised the
need to resolve certain key problems or issues in order for an effective marketing plan to be
formulated. Specifically, these points of significance are:

1. What segment of the overall casual tourist market is the best focus of marketing
efforts?
2. What are the media habits and sources of information of the segregated market
segment?
3. What information can be obtained from the market segments previous purchase
preferences in order to accurately describe their present wants?
4. What criteria or bases are used by the market segment in arriving at their decisions
to purchase vacation and hospitality services?

The Springhill management determined to undertake primary and secondary research to

gain accurate data for the resolution of the identified issues; they subsequently
commissioned the M&F Marketing Research Firm to conduct the necessary research. An
essential component of the research involved the fielding of questionnaires amongst a
sample population of the current customers in Springhill. The resulting answers were then
collated for further evaluation and assessment.

This paper will present an analysis of the raw data supplied by M&F with the intention of
arriving at precise conclusions to resolve the issues mentioned above. The analysis is
organised according to the order in which the identified issues have been enumerated, with
each item receiving its own section and subsequent examination.

All data for the charts and graphs in this document have been derived from the table shown
below, in which the respondents raw answers to the questionnaires were consolidated into
orderly, quantifiable sets (Note: Some table columns have not been included for page layout
considerations).

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Section One:

What segment of the overall tourist market is the best focus of marketing efforts?

Tabular data collected from the 48 Primary Respondents of the M&F Survey indicates that a
majority of the sample population earned annual wage levels which converged within the
Au$50,000-Au$100,000 income bracket, as indicated in Table 1 below:

While the arithmetic mean of the respondents annual income is calculated at Au$99,120.00,
it becomes apparent in Table 1 that many (if not most) of the Primary Respondents reported
annual income at levels below the mean, and at the same time a significant number reported
income levels reaching above it.

By establishing a baseline at Au$50,000 however, and pegging a ceiling of Au$100,000, it is

immediately observable that nearly all respondents fall comfortably into such an income
band. In segregating an ideal market segment as a focus of marketing, therefore, the range
between these income figures would be of highly-evident significance. Placing importance
on any point higher or any point lower than the aforementioned income band carries the risk
of negative implications for pricing strategies; such emphasis therefore should be
discouraged.

M&F additionally tabulated the annual income levels of the spouses of the Primary
Respondents, which are included in Table 2 on the following page:

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It is quite noticeable in Table 2 above that the annual incomes of the respondents spouses
are on a predominantly lower level, with the arithmetical mean settling at Au$46,100, or
around 50+% lower than the Primary Respondents arithmetical mean income. On its own,
the spouse income figures would not solidify the importance of the Au$50,000 - Au$100,000
income band. However, when Primary Respondent incomes and spouse incomes are
calculated together for determining Combined Income figures, the same Au$50,000 -
Au$100,000 bracket would repeatedly indicate the highest density of similarity amongst all
respondents, as shown in Table 3 on the following page:

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In terms of income, then, the marketing strategy would have a high probability of
effectiveness if the focus of attention would be concentrated on the casual tourist market
segment who would earn at least Au$50,000 a year, up to Au$100,000 (or upwards) a year,
whether in terms of single individual earnings or the combined amount of an income-earning
couple.

The age range of the respondents, both those of the Primary and the spouse, indicates that
the larger aggregate comprises those between 30-60 years old, as seen in Table 4 below:

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The dominant presence of the 30-60 age bracket compels the marketing strategy to place
emphasis on tailoring Product, Price, Distribution, Promotion, and the other P elements to
meet the expectations and wants and value perceptions of this particular segment of the
demographic.

There is also a high likelihood that the same market segment of casual tourist would have,
on average, one child below 15 years of age between themselves, as demonstrated in Table
5 (on the next page). This trend or likelihood invariably suggests that the marketing strategy
should be flexible enough to include techniques for customising products and services to
accommodate the needs and wants of children at those ages.

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On the basis of the data presented in Tables 1-5, there is an apparent tendency in the
numerical and statistical evidence to favour the conclusion that Springhill should focus its
marketing strategy and efforts on the casual market segment with the following
characteristics:

1. Married pairs or couples aged between 30-60 years old

2. With at least one child below 15 years old
3. Earning an income between Au$50,000Au$100,000 (or upwards)

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Section Two:

What are the media habits and sources of information of the segregated market
segment?

For the purposes of this section on media preferences, the table below will be the basis for
the data charts which describe the media habits of the respondents in the M&F market
research for Springhill. The original table with all of the respondents (in Page 4) has been
redacted to include only those respondents who fit the market segment profile characteristics
described in the previous section. The table now looks like this:

The media preferences of the relevant respondents can now be more accurately
summarised in the charts appearing on the following pages.

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The chart above with the reduced sample size in the modified table indicates that the
Internet is the most preferred form of media and source of information amongst the Primary
Respondents (as shown by the Y or Yes value on the X-axis), followed in descending
order of preference by TV, and finally by Newspaper. Recent advances in digital
information technology, which have given more opportunities for the general population to
utilise non-traditional forms of media, gives this trend a high level of practical credibility.

In the case of the results obtained from the responses of the spouses (as displayed in the
chart on the following page), however, the Newspaper medium apparently places higher in
terms of preferred media by the slightest of margins over the Internet. This lack of
consistency with the media preferences of the Primary Respondents makes it necessary to
exercise caution in downplaying the influence of traditional media even while digital sources
of information may appear as having the greater impact and presence.

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Even if the inconsistent trend between the two charts may introduce a certain level of
complexity, an analysis of media preferences can be simplified by taking into consideration
only the types of media which ranked the highest in one set of respondents and the other.
Internet and the print medium (or Newspapers) could then be emphasised as the two types
of preferred media, while Television can be assumed as having a lower degree of
importance.

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Section Three:

What information can be obtained from the market segments previous purchase
preferences in order to accurately describe their present wants?

For the purposes of this section, the modified Table in Section Two will be expanded to
include additional data as shown below, correlated to the segregated target market segment.

This data represents the Respondents expressed preferences during their previous
purchases of hospitality and accommodation services as casual tourist visitors, provided in a
more comprehensible tabulation through the charts in the following pages.

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As shown in the chart above, the Primary Respondents expressed high levels of interest in
Food and Reading, as indicated by the high scores of the Y or Yes answers.
Subsequently, a majority of the answers indicated a high level of indifference to the
Outdoor category, as expressed by its high score of N or No. This trend may be of high
relevance to the marketing strategy, since it reveals that even though the Primary
Respondents patronise Springhill as an accommodation in the middle of the Hinterlands, the
surrounding tropical forest environment would not necessarily give them the inclination to
engage in outdoor activities which require overly strenuous physical exertion (e.g.
bushwalking, mountain biking, kayaking, etc.).

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The data on the Interests of the respondents Spouses noticeably mirror the same paucity of
inclination towards the Outdoors category. This would clearly, then, reinforce the crucial
importance of Food and Reading interests to both the Primary Respondents and their
partners. The marketing strategy, therefore, has to take the cue from these results and
place less importance on opportunities for Outdoor activities.

With regard to interest in Food, the chart below indicates that the most frequent preference
among the respondents are to dine out two times in a week, which is another significant
consideration in the formulation of any marketing strategy for this target segment.

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In the charts below, the Primary Respondents and their Spouses are asked to rate their
preferences for three forms of entertainment, specifically Movies, Music, and Art, in the
order of their importance to each.

There is a noticeable conflict between the importance of Music and Art between the Primary
Respondents and their Spouses, which strongly suggests the absence of any definitive
trend. However, it is also observable that preference for Movies ranks high in both sets of
respondents. The marketing strategies and techniques, therefore, must take into careful
account the exceptional popularity of this form of entertainment. This is a strong indication
that accessibility to movies would most likely be an integral portion of the values and benefits
sought by the present and prospective patrons of Springhill.

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From the data shown in the chart above, it can be easily determined that most of the
respondents in the survey take 2 holidays per year. This data becomes more significant
when considered against the context of the quarterly earnings of Springhill as gathered from
the utilisation of overnight accommodation facilities, which is charted in the following page.

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The chart above shows that the most profitable periods for Springhill would be in the first two
financial quarters, followed by a moderate decline in the third quarter, and then a mild
resurgence in the fourth. There is a strong possibility that the weather conditions in the
immediate environment of the Gold Coast Hinterlands play a pivotal role in encouraging or
discouraging customer patronage. The first two financial quarters fall within the seasons of
the year when the temperatures in the region would remain in the moderate range, while the
third quarter temperatures reach uncomfortable highs. When the fourth quarter temperature
range again gradually gravitates to the milder climates leading to the new first quarter period,
there can also be seen a corresponding gain in client patronage. It is apparent that weather
and climate can greatly influence the preferences of the target segment, and should be two
key elements that receive adequate treatment and consideration in any marketing plan.

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Section Four:

What criteria or bases are used by the market segment in arriving at their decisions to
purchase vacation and hospitality services?

A report commissioned by The Gold Coast Tourism Visioning Project entitled Hinterland
Sustainable Tourism Development Study (Weaver and Lawton, 2002)1 offers a deep insight
into the motivations and criteria which influence casual overnight visitors to the general area
of the Gold Coast Hinterlands.

The report details the results of a survey conducted amongst casual overnight tourists
visiting the Gold Coast Hinterlands region, and includes data on the principal motivations of
tourists in deciding to go on holidays in the area. The most notable statistics are displayed
below:

In the table shown above, the columns for BB and OR represent (respectively) Binna
Burra and OReillys, two businesses which are similar in nature and operations with
Springhill. As indicated in the table, clients are most likely driven by the motivation to spend
a holiday in peaceful and tranquil surroundings when paying overnight visits in
accommodation facilities like Binna Burra or OReillys, a trend which also highly favours the
presence of similar motivations in choosing to stay at Springhill. Additionally, nature
appreciation, escape from the urban environment, relaxation, and sight-seeing are also
apparently strong motivators for the casual overnight visitor. Evidence is strong, therefore,
that the pleasant, laid-back, and pristine ambience and environment of the Gold Coast
Hinterlands itself occupies an essential role in the clients criteria for choosing Springhill.

Aside from the presence of hospitable rainforest-type surroundings and environment as a

key criterion for the target segments preferred holiday arrangement, the report additionally
mentions aspects of the visitor experience which have been described as those of the
greatest satisfaction for the tourists. These are further indications of highly-regarded

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elements within a Gold Coast Hinterlands holiday that are likely to feature prominently in the
clients criteria for choosing overnight accommodations in the area.

As shown in the table above, the Track/Walk experience is valued very highly by casual
tourists, corresponding to the immersion of the visitor in the landscape and scenery leading
into the accommodation properties. Facilities at site is also ranked prominently, implying
that visitors expect excellent quality and standards in whatever accommodation service they
choose to patronise.

In descending order of importance, the respondents further qualified that Relaxing/tranquil

setting, Views/panoramas, Wildlife, Scenery, Rainforest environment, and
Shops/shoppingamong a host of otherswere complementary relevant factors in their
choices of spending overnight stays in Gold Coast Hinterlands accommodations.

What stands out in the table above is the exceptionally strong significance of the
Track/Walk experience and Facilities at site factors, which are evidently the two most
imperative aspects of the visitors satisfaction experience. This indication makes for a strong
argument that visitors to Springhill will also base their purchase decisions on the criteria that
Springhill must provide both experiences according to a high-satisfaction level.

Just as important, Springhills marketing plan should also incorporate effective strategies in
delivering well-managed opportunities for the clients to enjoy the other subordinate key
satisfaction aspects as seen above, in order for the business to comprehensively meet
customer criteria.

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Conclusion:

To summarise the analysis of the data collected by M&F Marketing Research Firm under the
marketing strategy initiatives of Springhill Country Guest House management, the four key
marketing issues have been resolved as follows:

1) There is a strong indication in the numerical and statistical trends among the
respondents to favour the conclusion that Springhill should focus on a target market
segment with the following characteristics enumerated below:

a) Married pairs or couples aged between 30-60 years old

b) With at least one child below 15 years old
c) Earning an income between Au$50,000Au$100,000 (or upwards)

The validity of the age bracket showing the highest potential for marketing efforts can
be further reiterated by the findings of the Hinterland Sustainable Tourism
Development Study (Weaver and Lawton, 2002)1, in which it has been verified that
visitors aged between 30-59 years old would comprise the largest percentile of
overnight visitors to the Gold Coast Hinterlands region, as shown in the table below:

2) Regarding the media preferences of the respondents, the Internet and the print
medium (or Newspapers) have been shown as the two types of media with
consistently high rankings of preference, while Television can be assumed as having
a lower degree of importance. However, such a result may require supplementary
study since recent trends have been continuously indicating a gradual decline in the
consumption of print media among all consumer groups.

3) Food and Reading have been expressed as the more prevalent interest of both
the Primary Respondents and their partners as opposed to undertaking Outdoor
activities even if the Gold Coast Hinterlands environment and surroundings offer wide
possibilities of engaging in the latter form of recreation. The marketing strategy,
therefore, has to necessarily place less importance for Outdoor activities.

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 Both sets of respondents indicated a high preference for Movies as opposed to
Music and Art as Entertainment. Access to movies, then, should be prioritised in
the marketing strategy.

Weather and climate wield significant influence the preferences of the target
segment, implying that any marketing strategy might have to include unconventional
methods to counteract the discouragement of visitors to stay in Springhill during the
lean periods of the Third and Fourth financial quarters.

4) Springhills marketing techniques should prioritise delivering value on the customers

high expectations of enjoying the Track/Walk experience and Facilities at site
factors, which are most likely to be the two most imperative aspects of the visitors
satisfaction experience and purchase decision criteria. Other sets of client
expectations (as enumerated in Section Three on page 20) need to be delivered
through a well-managed program of implementation in order to meet customer
criteria in a comprehensive manner.

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Reference:
1Weaver, David and Lawton, Laura, Hinterland Sustainable Tourism Development Study
(Gold Coast Tourism Visioning Project 3.4), published at
http://SustainableTourism.Publisher-Site.com, a series imprint of theUniversityPress.com
Copyright CRC for Sustainable Tourism Pty Ltd, 2002

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