The Meaning of Tourism Market Segmentation

1.1.2.3. Supply and demand relationship in tourism

Talking about the tourism market means talking about tourism supply, tourism demand and the relationship between them in the tourism market.

Demand for tourism is formed and developed in the process of development of human society. Demand in tourism is the social need to use services such as transportation, accommodation, food, ... and tourism goods. Demand in tourism is extremely diverse and rich because it depends on the psychology, awareness, culture, ... of each tourist.

According to author Nguyen Van Luu (2009), tourism demand "is a part of the social demand with the ability to pay for goods, materials and tourism services to ensure travel, temporary stay, and entertainment of people outside their regular residence, for the purpose of rest, entertainment, cultural learning, medical treatment, participation in special programs and other purposes" [3].

According to Nguyen Van Manh and Nguyen Dinh Hoa (2015) [5], demand in tourism is expressed in two forms: primary demand (tourists) and secondary demand (people buying tourism products for business) and has the following characteristics:

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- Mainly demand for services

- Diverse and rich

- High flexibility

- Space-faring, dispersed

- Cyclical

Supply comes into being with the emergence of tourism demand. Tourism supply is the ability to provide tourism services and goods to satisfy people's tourism needs. Demand in tourism is mainly for services, so tourism supply mostly exists invisibly. Tourism supply has the characteristics of non-storage, on-site consumption, and inseparability of tourism products. [3]

According to Nguyen Van Luu (2009), "tourism supply is the ability to provide tourism goods to meet tourism demand (both physical goods for tourism and tourism services) brought to the market for sale at different prices that sellers accept in a certain time and space" [3].

Supply and demand are closely related. Starting from the tourism needs including essential needs, typical needs and additional needs of tourists, tourism business sectors have been created. Tourism businesses will link with service providers to exploit tourism resources to serve their customers - who come from all over the country and around the world.

1.1.3. Tourism market segmentation

1.1.3.1. Concept of tourism market segmentation

According to authors Nguyen Van Manh and Nguyen Dinh Hoa (2015), “A market segment is a group of buyers who respond relatively similarly to the same set of marketing stimuli. Market segmentation is the process of dividing buyers into groups based on differences in needs, desires, behaviors or personalities” [5].

The purpose of market segmentation is to “help tourism businesses select one or more target market segments as priority targets for their marketing strategies” [5].

1.1.3.2. Market segmentation criteria

Also according to Nguyen Van Manh and Nguyen Dinh Hoa (2015) [5], in tourism, people often use some of the following common criteria as a basis for market segmentation:

- Segmenting the tourism market by geographical criteria is a segmentation approach based on dividing the market into customer groups with the same geographical location (country, region, city, countryside...). For example: businesses

Vietnam tourism industry can segment the market according to large geographical areas such as Southeast Asia market, North Asia market, Northern Europe market, Western Europe market, North America market, etc. Market segmentation according to geographical areas is often used most commonly because the geographical areas have been clearly defined, making it easy to identify market segments. Geographic factors have a great influence on the habits, living standards, concepts, customs and habits and from there on the demands of the people living there because in the same geographical area, the residents there will have quite similar consumption habits.

- Segmenting the tourism market by demographic criteria is a commonly used approach. This segmentation is based on census information, which is collected on: age, gender, education level, average income, family size, occupation, religion, ethnicity and some other factors.

- Segmenting the tourism market based on psychological and social criteria, the market will be divided based on the psychological factors of tourists. This market segmentation is based on criteria such as personality traits, lifestyle, and social class of tourists to divide the market into segments.

- Segment the tourism market according to tourists' consumption behavior into groups that are similar in terms of the following characteristics: purpose of the trip, benefits that customers are interested in, status of using tourism services, frequency of tourism consumption, level of willingness to buy tourism products, customer loyalty to tourism business services.

+ Segmenting by purpose of the trip will help tourism businesses provide services that are appropriate to the needs of customers to achieve their travel purposes. For example, the needs and desires of business travelers and pure tourists are completely different.

+ Segmenting by customer benefits is to discover the main benefits that customers are looking for. For example, the main benefit of a trip is enjoyment or discovery,...

+ The status of tourism service usage is divided into market segments such as non-travelers, travelers, prospective travelers, and frequent travelers.

+ Travel consumption frequency includes groups of people who travel less, averagely and many times a year.

+ With the level of willingness to buy tourism products, the market is divided into groups of people who understand thoroughly about tourism products, groups of people who have just learned the information, groups of people who do not know the information at all, groups looking for benefits, groups who want to buy and groups who are ready to buy tourism products.

+ Customer loyalty to tourism business services is divided into levels: relative loyalty, non-fixed loyalty and no loyalty.

+ Customer attitudes towards tourism products at each stage such as: love, indifference, hate.

1.1.4. The significance of tourism market segmentation

According to Nguyen Van Manh and Nguyen Dinh Hoa (2015) [5], market segmentation has the following meanings:

+ Help tourism businesses easily determine and measure the size and proportion of each of their small market segments, thereby creating the most appropriate policies for each market.

+ Helps tourism businesses accurately identify competitors, thereby enabling tourism businesses to analyze competitive advantages, point out their strengths and weaknesses and those of their competitors, thereby having effective competitive strategies.

+ Is an effective measure to increase revenue, maximize profits and increase economic efficiency for tourism businesses.

+ Help tourism businesses develop appropriate human resource management policies.

+ Help businesses have investment strategies for marketing activities and use their marketing budget more effectively.

1.2. Tourist market research

1.2.1. Concept and objectives of tourist market research

“Tourism market research in a broad sense is the process of analysis and hypothesis to find out the consumer behavior (behavioral model). The responses of competitors and partners. The fluctuations of science and technology that affect the product structure of destinations and businesses. The macro management policies and mechanisms at home and abroad that affect the supply and demand of tourism.”[5]

“Tourism market research in the narrow sense includes only the study of tourism consumers and their consumer behavior patterns.” [5]

Within the scope of this topic, the author only conducts research in a narrow sense, that is, studying Western European tourists and their consumer behavior based on secondary documents and through interviews with experts who are leaders of international travel businesses across the country.

The objectives of market research in the narrow sense are linked to the study of the following issues [5]:

+ Business customers.

+ Characteristics of the business's customers.

+ Target customers of the business.

+ Customer response to products and services provided by the business.

+ Changes in customer needs.

1.2.2. Stages of tourist market research

It can be said that to attract tourists, it is necessary to research the tourist market. There are three stages in market research activities [5]:

The first phase is a potential research phase carried out with the following specific tasks:

- Market potential assessment helps tourism service providers see opportunities in providing their services by collecting customer information about the attractiveness of the tourism program and the image of the business.

- Researching customer buying behavior is researching customer motivations and consumption habits to know what factors influence potential customers' decisions to buy tourism products.

- Research travel readiness to understand potential customers' use of leisure time for travel.

The next phase is the current research phase which includes the following contents:

- Tourist participation behavior and personal information exchanges reveal customer characteristics about their needs and how they want to obtain services.

- Customer behavior as a tourist is the study of tourist behavior during the implementation of the tourism program from using services to spending as well as allocating time during the trip.

- Tourist satisfaction is expressed through satisfaction with tourism services after they experience the purchased tourism products.

The final stage is the results research stage focusing on content such as customer satisfaction with the trip; information from statistics on customer spending during the trip; and the rate of registration to buy services for the next trip.

1.3. Experience in researching and exploiting the Western European tourist market of Thailand and lessons to apply to Vietnam

1.3.1. Experience in researching and exploiting Thailand's Western European tourist market

According to statistics compiled by the General Department of Tourism based on data from the World Tourism Organization (UNWTO), Thailand ranked 9th in the top 10 markets in terms of international arrivals in the world in 2018 with 38.2 million arrivals and ranked first in terms of international tourists to ASEAN countries in 2019 with 39.8 million arrivals. Thailand is also the fourth country in the top 11 markets in terms of total revenue from international tourists. According to data from the Pacific Asia Travel Association (PATA), Thailand leads in the number of arrivals from large, quality source markets such as Japan, the US, Russia, the UK, France, and Germany [22]. This shows that Thailand is the most attractive destination in ASEAN. So, what have the Thai government and tourism industry done to attract tourists, especially Western Europeans?

Geographically, Thailand is located in the center of Southeast Asia with an area of 513,520 km2, the second largest in the ASEAN region, after Indonesia. To the east and northeast, it borders Laos; to the west, it borders Myanmar, to the south, it borders Malaysia, and to the southeast, it borders Cambodia [18].

Thailand is a constitutional monarchy headed by the king. Thai people have great respect for their king. The population of Thailand in 2018 was 69,428,520 people [36] with more than 94% of people following Buddhism [18]. Thai people are simple, polite, considerate, open and hospitable. It is the openness and hospitality of the people that has made Thailand known as the "land of smiles".

The Tourism Authority of Thailand (TAT) was established in 1960 as a government agency. In 2002, TAT became a part of the Ministry of Tourism and Sports, responsible for marketing and promoting tourism. After the initial period of rapid tourism development, Thailand tourism focused on

The policy for sustainable tourism development has three key elements: (1) protecting the environment and natural resources, (2) educating and disseminating information to people and tourists to have correct awareness of tourism, (3) developing human resources for tourism [18].

To attract tourists, stimulate their purchasing power and prolong their stay, TAT has created diverse and unique tourism products by building tourism products according to themes, with the slogan "Seven Amazing Wonders": (1) Thailand: products related to Thai art, tradition, style and culture, (2) Treaure: heritage and history, world heritage sites, historical sites, temples and museums, (3) Beaches: famous beach resorts in Thailand, (4) Nature: eco-tourism products, adventure, national parks, (5) Health and Wellness: medical tourism, resorts and beauty, (6) Trends: unique style hotels, shopping centers, nightlife, (7) Festivals: domestic and international events and festivals [18].

In its tourism marketing policy, Thailand focuses on high-spending markets such as the UK, Germany, the US, the Middle East and nearby markets. The key markets where Thailand strongly promotes tourism are North Asia, Southeast Asia, South Asia, the South Pacific, Europe and the Americas [18]. Currently, the Tourism Authority of Thailand has established 29 representative offices in most key markets in regions such as ASEAN, South Asia, the South Pacific, East Asia, North America, Europe and the Middle East. In Western Europe alone, there are 4 representative offices for Thai tourism in 4 different countries [40]. This makes it easier for Western European visitors to obtain information and work directly, as well as helps Thailand promote its image more strongly. Thailand has spent a lot of money on tourism promotion. The Tourism Authority of Thailand receives approximately US$80 million annually from the Government for tourism promotion activities. This funding is used mainly for

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