ABSTRACT

Market segmentation has been widely employed to give hoteliers understanding, identify attractive target segments and develop a marketing offer customized to the needs of clients. The study sought to identify the effects of market segmentation on the performance of hotels in Buea. The researchers used a descriptive survey as a research design with purposive sampling techniques to select the respondents for the study. A questionnaire was used as a research instrument and the data analysed using quantitative and qualitative data analytical methods. The study revealed that market segmentation has a significant effect on the profitability of hotels in Buea. Segmentation results in more customized products that meet customers’ needs, hence make them satisfied and in the long run increasing the profitability of the hotel. It concludes that market segmentation promotes competition and enhances the performance of hotels in Buea. Researchers recommend that market segmentation as a marketing strategy is taken seriously by hotels since it promotes quality service delivery and can serve as a competitive edge among hotels.

CHAPTER ONE

INTRODUCTION

1.1 Background to the study

The main function of the hospitality industry is to offer travellers homes away from homes and provide friendly reception and warm greetings (Walker, 2007). It is made up of businesses that provide lodging, food and other services to travellers, the main components are hotels, motels, inns, resorts and restaurants (Alhassan and Sakara, 2014). According to Ghosh, (2006) the industry is both national and international in nature and in terms of accommodation it ranges from luxury to budget hotels, from city centre business properties to tourism resorts and from motels to health spas, in the wider sense, timeshare, caravanning and camping should be considered a part of the industry.

According to Alhassan and Sakara, (2014), any organization, whether public or private, profit or non-profit, has to understand the make-up of its market(s) in order to provide products and services which meet clients’ needs and wants. As a result of this, the concept of market segmentation was introduced in the hotel sector to provide a greater understanding of the customer so as to meet their needs. This strategy tends to have a trinity aim: for hotels to increase sales volume; to achieve high market share; and to properly meet the needs and wants of organizations’ target markets (Alhassan and Sakara, 2014).

 

1.2 Statement of the Problem

In an era of increasing sophistication of customers’ demand, when hotel facilities such as room, restaurant, bar, nightclub or health club are no longer considered a luxury, hoteliers go to great lengths to provide unique benefits to customers and turn to different strategies, amongst which market segmentation forms one of the most important marketing strategies in hotel management.

In line with this above context, it is necessary to look at market segmentation on organizational performance on the hotel industry.

 

1.3 Objectives of the Research

Specifically, the study will seek to;

1. Identify how hotels in Buea segment their markets.
2. Determine how market segmentation affects the performance of these hotels under study.

• To establish the relevant consumer characteristics necessary for segmentation of hotels.

 

1.4 Research Questions

The research seeks to find out answers to the following questions;

1. How do hotels in Buea segment their markets?
2. How does market segmentation affect the performance of hotels in Buea?

• What are the relevant consumer characteristics necessary for segmentation of hotels in Buea Town for competitive advantage?

 

1.5 Hypothesis of the study

H0: Market segmentation does not affect the performance of hotels in Buea

H1: Market segmentation significantly affects the performance of hotels in Buea