Segmentation

Powerful Essays
www.elsevier.com/locate/atoures

Annals of Tourism Research, Vol. 32, No. 1, pp. 93–111, 2005 Ó 2005 Elsevier Ltd. All rights reserved. Printed in Great Britain 0160-7383/$30.00

doi:10.1016/j.annals.2004.05.001

MARKET SEGMENTATION
A Neural Network Application
Jonathan Z. Bloom University of Stellenbosch, South Africa
Abstract: The objective of the research is to consider a self-organizing neural network for segmenting the international tourist market to Cape Town, South Africa. A backpropagation neural network is used to complement the segmentation by generating additional knowledge based on input–output relationship and sensitivity analyses. The findings of the self-organizing neural network indicate three clusters, which are visually confirmed by developing a comparative model based on the test data set. The research also demonstrated that Cape Metropolitan Tourism could deploy the neural network models and track the changing behavior of tourists within and between segments. Marketing implications for the Cape are also highlighted. Keywords: segmentation, SOM neural network, input–output analysis, sensitivity analysis, deployment. Ó 2005 Elsevier Ltd. All rights reserved. ´ ´ Resume: Segmentation du marche: une application du reseau neuronal. Le but de la ´ ´ recherche est de considerer un reseau neuronal auto-organisateur pour segmenter le marche ´ ´ ´ touristique international a Cape Town, en Afrique du Sud. On utilise un reseau neuronal de ` ´ retropropogation pour completer la segmentation en generant des connaissances comple´ ´ ´ ´ ´ mentaires basees sur une relation input–output et des analyses de sensibilite. Les resultats ´ ´ ´ du reseau neuronal auto-organisateur indiquent trois groupes qu’on confirme visuellement ´ en developpant un modele comparatif base sur l’ensemble des donnees d’essai. La recherche ´ ` ´ ´ a montre aussi que le Tourisme Metropolitain du Cap pourrait utiliser les modeles de reseau ´ ´ ` ´ neuronal et suivre la trace du



References: Bek, M., T. Grosboll-Poulsen, and M. Kristoffersen 2002 Evolutionary Trained Kohonen Networks as Classifiers for Human Utterances. Internal Working Paper. Leeds: University of Leeds. Blum, A. 1992 Neural Networks in C++: An Object-orientated Framework for Building Connectionist Systems. New York: Wiley. Crusader Systems 1998 Basic Modelgen Version 1.6. Pretoria: Crusader Systems. Deboeck, G. 1994 Trading on the Edge: Neural, Genetic and Fuzzy Systems for Chaotic Financial Markets. New York: Wiley. De Tienne, K., and L. Lewis 2003 Artificial Neural Networks for the Management Researcher: The State of the Art. . Galloway, G. 2002 Psychographic Segmentation of Park Visitor Markets: Evidence for the Utility of Sensation Seeking. Tourism Management 23:581–596. Goonatilake, S. 1995 Intelligent Systems for Finance and Business: An overview. In Intelligent Systems for Finance and Business, S. Goonatilake and P. Treleaven, eds., pp. 1–28. New York: Wiley. Hornik, K., M. Stinchcombe, and H. White 1989 Multilayer Feedforward Networks are Universal Approximators. Neural Networks 2:359–366. Jang, S. C., A. Morrison, and J. O’Leary 2002 Benefit Segmentation of Japanese Pleasure Travelers to the USA and Canada: Selecting Target Markets based on the Profitability and Risk of Individual Market Segments. Tourism Management 23:367–378. Jeng, J.-M., and D. Fesenmaier 1996 A Neural Network Approach to Discrete Choice Modeling. In Recent Advances in Tourism Marketing Research, D. Fesenmaier, J. O’Leary and M. Uysal, eds., pp. 119–144. London: The Haworth Press. Kaastra, I., and M. Boyd 1996 Designing a Neural Network for Forecasting Financial and Economic Time Series. Neurocomputing 10:215–236. Kim, J., S. Wei, and H. Ruys 2003 Segmenting the Market of Western Australia Senior Tourists using Artificial Neural Networks. Tourism Management 24:25–34. Kohonen, T. 1997 Self-Organizing Maps. Berlin: Springer. Kotler, P. 2001 Marketing Management. Englewood Cliffs: Prentice-Hall. Law, R., and N. Au 1999 A Neural Network Model to Forecast Japanese Demand for Travel to Hong Kong. Tourism Management 20:89–97. Masters, T. 1993 Practical Neural Network Recipes in C++. New York: Academic Press. Mazanec, J. 1992 Classifying Tourists into Market Segments: A Neural Network Approach. Journal of Travel and Tourism Marketing 1(1):39–59. 1995 Positioning Analysis with Self-Organizing Maps: An Exploratory Study on Luxury Hotels. Cornell Hotel and Restaurant Administration Quarterly 36(6):80–95. 1999 Simultaneous Positioning and Segmentation Analysis with Topologically Ordered Feature Maps: A Tour Operator Example. Journal of Retailing and Consumer Services 6:219–235. 2001 Neural Market Structure Analysis: Novel Topology-Sensitive Methodology. European Journal of Marketing 35:894–914. JONATHAN BLOOM 111 McCord-Nelson, M., and W. Illingworth 1993 A Practical Guide to Neural Nets. New York: Academic Press. Mok, C., and T. Iverson 2000 Expenditure Based Segmentation: Taiwanese Tourists to Guam. Tourism Management 21:299–305. Pattie, D., and J. Snyder 1996 Using a Neural Network to Forecast Visitor Behavior. Annals of Tourism Research 23:151–164. Saarenvirta, G. 1998 Mining Customer Data. DB2 Magazine 3(3):10–20. Statsoft 1998 Statistica Version 5.5. Tulsa: Statsoft. Tsaur, S.-H., Y.-C. Chiu, and C.-H. Huang 2002 Determinants of Guest Loyalty to International Tourist Hotels––A Neural Network Approach. Tourism Management 23:397–405. Two Crows 1999 Introduction to Data Mining and Knowledge Discovery (3rd ed.). Potomac: Two Crows. Venugopal, V., and W. Baets 1994 Neural Networks and Statistical Techniques in Marketing Research: A Conceptual Comparison. Marketing Intelligence and Planning 12(7):30–38. Submitted 16 June 2003. Resubmitted 20 January 2004. Resubmitted 29 March 2004. Accepted 7 May 2004. Final version 20 May 2004. Refereed anonymously. Coordinating Editor: Josef A. Mazanec

You May Also Find These Documents Helpful

  • Powerful Essays

    Dong J. K., Woo G. K. and Jin S. H., A perceptual mapping mapping of online travel agencies and preference attributes. Tourist Management 28 (2007) 591-603…

    • 1201 Words
    • 5 Pages
    Powerful Essays
  • Satisfactory Essays

    THL Case Study 8

    • 404 Words
    • 2 Pages

    1. This case implies that the frequent acquisition and disposition of tourism brands poses problems for information systems. I believe these problems include the information systems being a type of pre-internet, e-commerce, web 2.0 and enterprise 2.0 which are inter-organizational information systems. THL uses five components of an information which include SharePoint, Microsoft Office SharpPoint Services, Microsoft Report Server, OLAP and Data Mining. The technologies create an excessive software maintenance activity and lost. Out of the five components mentioned above, Web 2.0 is most helpful to THL because they advertise their revenue models through different channels.…

    • 404 Words
    • 2 Pages
    Satisfactory Essays
  • Good Essays

    All of these figures demonstrate how outside media/marketing factors, personal and psychological factors can influence a persons perception of a destination. (Ryan and Gu 2008) point out that the image itself is the beginning point of tourists expectation, which is eventually a determinant of tourists behaviour. The behaviour of the tourists and their motivations to visit a destination then determines what type of tourist they will be and what type of tourism will…

    • 2209 Words
    • 9 Pages
    Good Essays
  • Better Essays

    References: Bicak, H.A., Altinay, M. & Jenkins, H. (2005) 'Forecasting tourism demand of North Cyprus ', Journal of Hospitality and Leisure Marketing, Vol. 12, pp. 87-99. Chopra, S and Meindl, P (2007) Supply Chain Management: Strategy, Planning & Operation, 3rd edition, Pearson Education, New Delhi. Choo S. and Mokhtarian, P.L. (2007) 'Telecommunications and travel demand and supply: Aggregate structural equation models for the US ', Transportation Research Part A, 41 pp. 4 -18. Dennis, N.P.S. (2002) 'Long-term forecasts and flight schedule pattern for a medium-sized European airport ', Journal of Air Transport Management, Vol. 8, pp. 313-324. Dritsakis, N. and Athanasiadis, S. (2000) 'An econometric model of tourist demand: The case of Greece ', Journal of Hospitality and Leisure Marketing, Vol. 7, pp. 39-49. Hamzacebi, C. (2008) 'Improving artificial neural networks ' performance in seasonal time series forecasting ', Information Sciences, Vol. 178, pp. 4550-4559. IATA International traffic statistics, 2008a, Facts & Figures - 2008 Traffic Results, Montreal, Quebec, viewed 30 November,…

    • 4852 Words
    • 20 Pages
    Better Essays
  • Good Essays

    segmentation

    • 6350 Words
    • 26 Pages

    No, just because company receives cash does not mean that the liabilities will go down. Companies receive cash for merchandise sold, services rendered, money owed to the company from customers, investments, etc. These things will increase assets and either Revenue or Owners Equity (Stockholders equity) but they will not…

    • 6350 Words
    • 26 Pages
    Good Essays
  • Powerful Essays

    It is argued that cognitive learning is when a customer is unfamiliar with the product or service, but as a result of the experiences will modify their actions on future occasions (Aslin and Rothschild, 1987; Ushadevi, 2013). The cognitive approach supports the theory of consumer behaviour which in cognitive terms is the theory of the customer decision model. The consumer decision model decisions are influenced by 2 main factors namely; stimuli which is processed as a result of previous experiences and external variables (environmental influences or individual differences) (Aslin and Rothschild, 1987; Ushadevi, 2013). The environmental influences include: culture; social class; personal influence; family and situation. Individual Influences include: motivation, involvement, knowledge, personality, values and lifestyles (Abdallat and Emam, 2001). Cognitive development contributes to the expenditure of tourists through repeat visits which is instigated by past experiences (McFarlane and Boxall, 1998; Ushadevi,…

    • 1479 Words
    • 6 Pages
    Powerful Essays
  • Powerful Essays

    In modern world tourism has become a huge industry with the increased number of tourists each year. There are some tourism attractions in every country and with proper maintenance and planning these tourism attractions can earn a healthy amount of revenue each year. People are becoming more adventurous and started exploring the globe more than before. This is a huge opportunity for the tourism industry to flourish. Destination management is now a major concern for many countries having tourism attractions and for this the number of tourists is increasing every year. As the destinations are becoming popular, the management of these destinations are also becoming crucial as newer opportunities and threats are emerging. Long term planning and monitoring regarding all the features of tourism destination is barely important to grow the business.…

    • 3685 Words
    • 15 Pages
    Powerful Essays
  • Better Essays

    The aim of this research is to aid the tourist board in Amsterdam. It should help them in deciding how best to market the destination in the future. The aim is to help the tourist board improve the effectiveness of it’s marketing in order to attract more tourists and to increase the amount of money being spent on tourist attractions. It will also help to aid the tourist board in deciding how best to segment the market and what visitors it should market itself to.…

    • 2261 Words
    • 10 Pages
    Better Essays
  • Better Essays

    Liepers Model

    • 1585 Words
    • 7 Pages

    The tourist is the key player in this system. Tourism, in fact, is a human experience, enjoyed, anticipated and recalled by a lot as a historic and/or life time aspect. Therefore, defining the tourist and its classification turns out to be equally relevant.…

    • 1585 Words
    • 7 Pages
    Better Essays
  • Powerful Essays

    The generic capabilities of GIS indicate that this technology has tremendous potential in tourism in the visualization term, but its applications are limited in tourism field due to lack of general database of those visitors. For instance, GIS is unable to illustrate the origin and destination of visitors. What is more, it cannot predict the tourists’ expenditure patterns, motivation of travel, transportation selection, etc. In order to pursue a further investigation, Bahaire and Elliot-White categorized…

    • 1162 Words
    • 5 Pages
    Powerful Essays
  • Satisfactory Essays

    Case Study 8

    • 484 Words
    • 2 Pages

    This case implies that the frequent acquisition and disposition of tourism brands poses problems for information systems. The information systems could be a type of pre-internet, e-commerce, web 2.0 and enterprise 2.0 which are inter-organizational information systems. The information technologies that the THL use include SharePoint, Microsoft Office SharpPoint Sevices, Microsoft Report Server, OLAP and data mining. The technologies create an excessive software maintenance activity and lost. Web 2.0 helps THL a lot by advertising their revenue models through different channels.…

    • 484 Words
    • 2 Pages
    Satisfactory Essays
  • Good Essays

    TALC Model

    • 729 Words
    • 3 Pages

    Tourism Area Life Cycle (TALC) is a model developed by Butler to explain the stages involved in the development of a tourism destination. TALC model has identified six stages involved in the lifecycle of a tourism destination. These stages include; exploration, involvement, development, consolidation, stagnation and decline/ rejuvenation. While many tourism scholars have adopted Butlers TALC model as tool for tourism destination planning, there are still a few tourism scholars who think that the model that not provide a comprehensive understanding of the development of tourism destination. This paper will evaluate to the extent to which Butler’s TALC model provides a useful means of understanding the historical evolution of tourism destination. Though this model is not comprehensive, it provides an effective tool that can be used in tourism destination planning.…

    • 729 Words
    • 3 Pages
    Good Essays
  • Satisfactory Essays

    Segmentation refers to the process of dividing the market of consumers into groups based on one or more shared internal or external characteristics. After the segmentation process is complete, the next step is targeting, which involves the tourism marketer's choosing a segment or segments to which to communicate the promotional message. There are three different targeting strategies that a tourism marketer can implement. The tourism marketer must make the important decision as to whether he or she wishes to use an undifferentiated, concentrated, or differentiated targeting strategy (Table 5.1).…

    • 537 Words
    • 2 Pages
    Satisfactory Essays
  • Good Essays

    Tourism on Malacca

    • 6305 Words
    • 26 Pages

    3. Louviers, P., Driver, J. and Powell-Perry, J. (2003), Managing Customer Behavior dynamics in the Global Hotel Industry, Journal of Vacation Marketing, 9 (2), 164-74.…

    • 6305 Words
    • 26 Pages
    Good Essays
  • Good Essays

    hospitality management

    • 704 Words
    • 3 Pages

    The hospitality industry supported 7.5 million USA jobs in 2011(“selectusa.commerce.gov”). It includes a broad variety of service industries that incorporate food service, tourism, and hotels (“economywatch.com”). The business depends in large part on the number of people traveling for business or pleasure. Economy has a big impact on travelers’ decisions. When individuals and corporations are doing well financially, they are more likely to take vacations and spend money on travel People also need to have confidence that they will have enjoyable experience when they travel (“mghotelsblog.com”). Sixty five percent of guests rebook the same chain if they had good experience (hotelmarketing.com). To reach a large sector of customer, the business has to offer excellent customer service, maintain the brand standard along with offering reasonable rates and improving the online travel market (mghotelsblog.com).…

    • 704 Words
    • 3 Pages
    Good Essays