Who Are Your Customers? The Ark Segmentation

1. Who Are Your Customers? The Ark Segmentation David Geddes

2. Road Map • What’s the problem? • What is a Marketing Segmentation? • What can it do for you? • Applying the findings … WORKSHOPS • Next Steps

3. What’s the Problem?

4. Source: IPS & UKTS What’s the problem? • We all know that attracting people to stay in the UK is becoming increasingly difficult. …. but not all professionals have understood what this means for them. • They still believe that maximising customer satisfaction is the key to developing their market. • Good customer service is essential but this approach just isn’t stemming the decline in market share

5. Customer Attraction v Retention • Traditional approaches are built on the assumption that giving people an excellent time will: • ensure they want to come back and • encourage them to tell their friends (‘personal recommendation’ is still a great influence). • but will it? • This approach alone simply isn’t winning the argument. • We need to win back people who aren’t choosing the UK, and • This is about attracting new customers not retaining a share of a diminishing market. • So how do we do this?

6. We need to Excite, Inspire, Motivate • Few of us can sell scuba diving with Dolphins in a sun soaked sea, but … • We need to find the things that will attract • experiences that can inspire and refresh • choices that will motivate • And communicate them in ways that tap into these aspirations

7. So Which One is your next customer?

8. What is a Marketing Segmentation Segmentation is a means of dividing the market into useful groups for the purposes of marketing or customer service. • Socio-demographic - segments based on age, sex and seg • easy to create • easy to apply • poor predictor of leisure interests and holiday behaviour • Behavioural - segments based on actual behaviour • requires activity data - purchase, brand choice • can be good predictor of same activity • unstable if key brand or activity changes segmentation no longer valid • Psycho-metric - based on personality statements • designed to understand the type of person you are • can be excellent aid to sales strategies indicating the approach to take • can be taken to far and ignore life circumstances

9. What a Good Marketing Segmentation Does • It should help to get inside the mind of customers, understand the factors that drive their behaviour • It should identify distinct customer groups in terms of what: • they are looking for • they prioritise • This is likely to be reflected in: • different purchase drivers for holiday choice • their use of different information channels • their response to marketing messages • different holiday and leisure behaviour • It allows you to attract new customers by targeting your marketing, and communicating your product in an appropriate way

10. ArkLeisureTM – A Value Based Segmentation • Based on concept that delivering appropriate quality is the key to success • similar to psychometric approaches as based on people’s core values • but has two components • the values that will influence the style and type of experience people prefer • the aspects of a service or product people value • Ie it is grounded in how people make their choices • This is the basis of the ArkLeisureTM Segmentation which has been in use from 2002

11. What’s on the Menu? • ArkLeisureTM discriminates on motivations and values • Life factors and specific circumstances impose practical constraints on destination choice and type of holiday • Together they are the basis upon which specific choices are evaluated as ‘right for me’

12. ArkLeisureTM Segments

13. In Detail Source: ArkLeisureTM Marketing Segmentation

14. “Bring your own sandwiches” Distinguishing Brand Behaviour

15. What can ArkLeisureTM do for you?

16. UK destination Choice • Two dimensions clearly shown • Innovation v stability • Independence v mass market • Cities related to innovation • Countryside to more traditional options • Seaside options showing greatest diversity • Your destinations can be placed in their national context and mapped to the market segments and values associated with them Market Map of UK Selected Destinations Source: Arkenford survey for YTB of 2000 UK holiday makers 2005 People who would Personally consider the destination for a holiday

17. Digging deeper % “High Street” Tourists in South East Destinations “High Streets” like places with a mid range offer but with a degree of quirkiness By contrast, this segment is not attracted to the traditional resort areas Source: TSE survey of 5000 UK holiday makers 2005

18. Gunwharf Quays a ‘High Street’ Mecca for Portsmouth

19. Percentage of Segment Who Think this Type of Attraction is Their Kind of Thing Interest in Attractions • Other analysis has been undertaken for Visitor Attractions • The independent half of the market are generally more interested in heritage; • Traditionals are most attracted to Heritage England (Stately Homes, Castles and Gardens) • Style Hounds like pleasure beaches, Aquariums, White Knuckle Theme Parks and Safari Parks • Cosmopolitans are likely to be interested in most things Source: ArkLeisureTM Marketing Segmentation

20. A Market Map for Attractions • There are clear clusters of interest • Pretty heritage • Harder history and education • Wildlife • Amusement • Art • There powerful divide between heritage and amusements • This division can explain 85% of peoples interest in attractions • Every attraction needs to think how its marketing relates to this dimension Market Map of UK Attractions Source: Arkenford Research based on data collected for a consortium of ALVA destinations People who would Personally consider the attraction their kind of thing

21. What Customers are looking for in a day out • Adding the experiences customers are looking for to explains what people are expecting from each kind of attraction. • Pretty Heritage is associated with • Nostalgia • Peace and relaxation • Education • Wildlife with • Fascination • Entertainment • Interaction • Out of the ordinary Market Map of UK Attractions Source: Arkenford Research based on data collected for a consortium of ALVA destinations People who would Personally consider the attraction their kind of thing

22. What Could a segmentationdo for you

23. How can the Insight be Used • Selling Safari Parks to Discoverers needs to combine • The expectation of the attraction • Fascination • Entertainment • Interaction • Out of the ordinary • With the values of the customer segment • Independence of mind and action • Interest in new options and ideas • Looking for new experiences • Opportunities to learn • Evaluate and buy on personally defined value

24. Implications • Design the product to attract the target market • e.g. the type of catering/retail brands that are most likely to appeal • Design the marketing plan • To sell the core values of your target segment • To appeal to target values and leisure objectives • Place in appropriate media • Drop the labels unless they complement this strategy • Develop joint initiatives with other destinations that have appeal to similar audiences • Build a brand based on values

25. Using ArkLeisureTM • Work with a range of clients covering; • Attractions • Destinations • Regions • VisitBritain • Many people use it: • conceptually to help focus their thinking about their customers • to examine your potential market who should you be attracting given your current or proposed offer • to check what you think you know you by adding the segmentation to existing customers surveys or commission a new one to check your profile. • to plan marketing by investigating what will best attract people to your offer Four new services: • Quick, targeted on-line research. • Enquirers profiling • Campaign Planning for better DM list selection • Destination Planning

26. Building on our knowledgeOur Database on People’s Activities • Any information you gather about segments in relation to the region will be supported by a wider database of information included in the chart below;

27. Using Current Knowledge

28. Summary of Findings • Arkenford conducted some secondary data analysis across the ArkLeisure database of information • The database contained 185 respondents who had previously been questioned about short breaks to Dorset • Two key samples had been questioned; • A national sample of respondents (108 respondents) • A South East sample of respondents (77 respondents) • Where possible the information collected has been combined • The Dominating Segments who have visited Dorset are; • High Streets, Followers, Cosmopolitans and Traditionals, accounting for 65% of those stating they had taken a short break in Dorset

29. Profile of Respondents • Comparing the profile of those visiting Dorset on a short break against the national ArkLeisure profile determines which segments are under and over represented • The proportion of High Streets, Followers and Traditionals in the respondent base is greater than the national profile for each group indicating that Dorset is an area of interest for these segments. • Cosmopolitans account for 16% of people taking short trips to Dorset, which although high is still slightly below their national profile

30. Areas of Dorset Visited • The destination visited within Dorset have been grouped as shown below in order to identify which types of visitor are staying where • Coastal Towns are the main destination visited for over 70% of those taking short breaks in Dorset (47% of all visited one of the main Coastal towns within Dorset; Bournemouth and Poole)

31. Areas of Dorset Visited by ArkLeisure Segmentation • Indexed scores of the areas visited by ArkLeisure Segments show an interesting breakdown of which segment is likely to go to which site • Style Hounds and Cosmopolitans are more likely to spend a short break in the larger coastal towns such as Bournemouth • High Streets, Functionals and Habituals prefer coastal areas as well but are more likely to go to smaller towns such as Swanage • Traditionals are clearly more attracted by the rural areas of Dorset • Discoverers and Followers are more flexible show no preference towards one or the other The index measures the segment’s choice of destination against the norm for the segment. An index above 100 shows that more people from the segment than average visit. For example, almost 3.8 times more Traditionals visit rural areas compared to the average for all destinations in the region

32. Reasons for choosing Dorset as a short break destination • …

33. Activities undertaken on short break in Dorset • Over a third of people taking a short break in Dorset, visit historic / heritage attractions (40% visiting other attractions) • Shopping and going on Walks is undertaken by half of the visitors • However, main purpose of visit is more general

34. Activities undertaken on short break in Dorset by ArkLeisure Segmentation Ranked

35. Accommodation Stayed In • Visitors on a short break stay at a range of accommodations • Up to 3 Star Independent Hotel, Friends / Relative Houses, B&B / Guest Houses, Rented Caravan account for 2/3’s of choices made

36. Source of Information Used • Most visitors rely on gaining information on the area they are visiting from the previous experiences or friends / relatives recommendations (67%) suggesting more avenues for providing information on the area need to be explored

37. ArkLeisure Pen Portraits

38. Cosmopolitans • OUTLOOK • Strong, active and confident. • Do what they want rather than follow any particular fashion. • Stylish people but it is individuality rather than fashion that is important to them. • Comfortable trying new things that are out of the ordinary. • Happy to adopt traditional values when appropriate. • Early adopters but this is generally based on their personal interest in new products and opportunities rather than on fashion trends. A result of this is that they are early to try out new products, especially in the field of new technology. • Value and seek functionality in their purchases. • High-spending market and find it easy to justify buying expensive alternatives. • To be given individual attention is very important for Cosmopolitans and they are willing to pay for it. • Are risk takers and this is reflected in their purchases and their desire for things that are new and different. They like new challenges, both physical and intellectual. • Have an appreciation of art and culture. • Life for this group is full and active, yet peace and relaxation is still valued in the right circumstances. • INTERESTS & ACTIVITIES • Personal interests - Cosmopolitans like shopping, cooking and arts and culture. • Days out and attractions - Cosmopolitans have a slight bias towards heritage and arts or cultural attractions. Their active nature is also reflected in the fact that they have a strong appeal towards days out in the ‘great outdoors’ – this could be visits to a National Park, a walk in the country side or a day at the beach. The atmosphere that they are looking for in a day out is something that is educational and something that is mentally challenging. • Shopping - Cosmopolitans spend a lot of money on clothes and up market fashion chains (e.g. GAP) are where they are likely to be found. They also like places to shop that have a strong independent sector (e.g. antique shops or specialist shops). • Eating & drinking - Cosmopolitans are the segment to eat out most often and are drawn to new, self found, or non-chain restaurants. Wine bars are popular for drinking. • Nights out - Cosmopolitans have a range of nights out that appeal and these include comedy, cabaret, theatre and ballet. • Media – Into films, news and comedy. Less time spent viewing TV than the majority of other segments. • Holidays – Most likely segment to use the long haul and more independent operators (e.g. Kuoni, Expedia, Trailfinders or cruise operators). • A good short break for a Cosmopolitan allows them to escape, do their own thing and expand their knowledge or experience. • DEMOGRAPHIC PROFILE • 19% of the GB population • Even breakdown of ages. 34% under 35; 29% over 55 • 69% have internet access • 33% have children at home • 27% single; 51% married/ living as married • Slight bias towards the higher SEGs; 57% ABC1 • 21% retired

39. High Street • OUTLOOK • This group likes to take their information from other sources rather than discover things for themselves. • They are interested in fashion brands and style is more important than functionality or individuality. • They care what others think, which may hold their choice back a little. • They are not the first to adopt new products but they do earlier than most segments • They are keen to follow along when a fashion has been established. • They are prepared to spend money on getting a good service. • They are prepared to try new and different things, although these are likely to have been tested by others so the experiences are new to them as individuals as opposed to new to the market. • They are an active segment that is moderately interested in intellectual pursuits, arts and culture. • INTERESTS & ACTIVITIES • Days out and attractions - the High Street segment has a fairly universal appeal. There is a slight bias towards historical/ heritage attractions and living history attractions. They are looking for an educational experience from their days out. Cinema and theatre visits are also popular choices for this segment. (See Appendix A) • Shopping - Being interested in fashion brands, days out that involve shopping appeals greatly to this segment. They are drawn to the main high street fashion stores (e.g. Next & River Island). For their shopping trips they like to go to places with a mid range offer but with a degree of quirkiness. • Eating & drinking - High Streets like the mass market, established, well known chains (e.g. Bella Italia/ Pasta, TGI Fridays). • Media – Enjoy soap operas and children’s TV. • Holidays – Most likely to use a travel agent for booking holidays. Family orientated brands dominate (e.g. Butlins, Eurocamp, centreparcs). This is the segment most likely to choose London for a break with their partner. It would be straightforward to entice this segment with the reassuring hotel, shopping, eating and theatre brands. • DEMOGRAPHIC PROFILE • 18% of the GB population • Even split of ages; 30% under 35, 38% over 55 • 57% with internet access • 30% have children at home • 52% married or living as married; 24% single • 50% ABC1; 50% C2DE • 64% taken an overseas holiday in the past 3 years • 27% retired; 42% working full time • 69% owning their home (with a mortgage or outright)

40. Discoverers • OUTLOOK • Discoverers as the name suggests are independent of Mind. • They are the group least likely to be worried about what others might think. • They are little influenced by style or brand unless it represents values they are seeking. • Function far out rates style as a purchase driver. • Quite high spenders, and value new products and services as well as new experiences. • They will judge their value for themselves. If the product suits their needs and is right then they will spend their money. • They value good service. • They live a relatively relaxed pace of life. • They enjoy intellectual challenges but arts and culture are not really an important part of who they are. INTERESTS & ACTIVITIES • Personal interests - Include attending sporting events, computer games and DIY. • Days out and attractions - Discoverers are drawn towards attractions that are geared towards investigation and amusement. This could include attractions such as zoos, science museums or living history attractions. They want to be fascinated and absorbed by their days out and go for something out of the ordinary. • A good night out - would involve live music. • Shopping - a discoverer is looking for something that is different from the norm and is more likely to be attracted towards markets. • Eating and drinking - the types of eating and drinking establishments that appeal to a Discoverer are modern, functional but service orientated (e.g. Ha Ha Bar & Canteen, Bar Med). This segment eats out frequently. • Media – Have a wide variety of interests when it comes to TV viewing including films, sport, nature comedy and science programmes. • Holidays – Independent travel companies (e.g. Trailfinders) appeal to this segment. They are a group likely to holiday off the beaten track or try to learn something new on their holiday. One of the least likely segments to book a package holiday. • A good short break for a Discoverer allows them time to themselves, a chance to escape and the opportunity to expand their knowledge and experiences. DEMOGRAPHIC PROFILE • 13% of the GB population • 47% between 25 and 44; 26% over 55 • High internet access; 70% with access • 29% have children at home • 55% married; 26% single • 54% ABC1 • 70% taken an overseas holiday in last 3 years • 85% car ownership • 45% have a mortgage

41. Style Hounds • OUTLOOK • Style Hounds are very fashion conscious, and keen not to be seen as old fashioned. They like to be part of the latest trends and therefore quite strongly influenced by others, though they have the spending power to do what they want. • They are very brand focused, they see fashion as being stylish. • They are early adopters, and will go for things out of the ordinary, probably believing that they are setting fashions. • Limited responsibility means that if they have money they are prepared to spend it. They find it easy to justify buying expensive alternatives and will pay for better service. Style Hounds are risk takers who like to try new and different things and they live a full and active life, but active does not mean serious sports. • Peace and relaxation in the traditional sense is not sought out; fun and excitement is what defines a good time. • They haven’t much interest in more ‘sophisticated’ arts, or cerebral activities. • INTERESTS & ACTIVITIES • Shopping- They are a high spending segment when it comes to clothes shopping. They will shop at the main high street outlets (Next, Warehouse, etc) but are very keen on their brand names. • General interests - revolve around shopping, cinema, sporting events and computer games. • Days out and attractions - they are seeking attractions that are fun, entertaining and with thrilling experiences. The sorts of days out/ attractions that will appeal include theme parks and pleasure beaches. A good night out for this segment would be clubbing, live music or a visit to the cinema. • Eating and drinking - the Style Hound will go to places where it is fashionable and stylish – the sort of place they can show off their fashion brands. An example of this would be ‘trendy’ bars e.g. The Pitcher & Piano, All Bar One. • Holidays – This segment is most likely to use the main stream package tour operators for their overseas holiday. They are most likely to book holidays via the Internet and book them last minute. • Partying all night and meeting new people defines a good short break with friends for this segment. • Media– This segment has the highest proportion of Sun readers. They are into the male and female lifestyle magazines as well as celebrity gossip magazines. For TV viewing, they enjoy reality TV, music TV and soap operas. • DEMOGRAPHIC PROFILE • 10% of the GB population • A young group; 60% under 34. • Very high internet access; 79% • 58% have no children at home • 50% married, 35% single • 60% ABC1 • 55% working full time • 76% have taken an overseas holiday in the last 3 years

42. Functionals • OUTLOOK • Functionals are very resistant to spending and appear pretty self reliant. • They are very price driven and value functionality strongly over style. • They are very traditional in their values, and are not prepared to pay for fashion, style or ‘individuality’. • Service is something that they expect as opposed to something they will pay extra for. • Whilst they are not early adopters they are interested in new experiences, and are happy to try new things. • They also enjoy intellectual challenges, arts and culture. • INTERESTS & ACTIVITIES • Personal interests – DIY, gardening, arts & culture. • Days out and attractions – Interested in heritage attractions. Seeking a nostalgic and somewhat educational experience. • Shopping – Higher propensity to use the lower cost supermarkets e.g. co-op. Budget clothes shops are used and a low amount spent on clothes purchases. • Eating & drinking – Lower propensity to eat and drink out compared to other segments. Price & functionality is important. Social clubs or Weatherspoons pubs are favoured drinking establishments (price sensitive). • Nights out – Most likely to be a trip to the cinema or a trip to the theatre. • Media – Mail & Telegraph are the most popular newspapers. Lowest proportion of all segments owning satellite/ cable TV. Into news, films and comedy. • Holidays – Most likely to choose a specialist operator or an independent holiday company. Unlikely to use a dedicated internet holiday company but quite likely to book accommodation online & arrange travel themselves. Low frequency of holiday taking and most likely to do a short break in the UK and a longer holiday overseas. • DEMOGRAPHIC PROFILE • 9% of the GB population • 63% over 45 years • 50% married; 27% separated or widowed • 48% working full time; 25% retired • Average income (most between £20K-£30K) • High frequency of internet usage.

43. Traditionals • OUTLOOK • Traditionals are a main stream market. Their members are relatively self reliant and internally referenced with possible tendencies towards being sustainers. • Brand is not a key purchase driver for this segment but it does not mean that they are brand averse. • They are more likely to hold traditional values. • Functionality is far more important than style and they are not swayed by products with style and individuality, although they will still go for something out of the ordinary. • They value good service, and this is something that they will pay for, especially in terms of individual attention. • They are unlikely to justify spending on expensive alternatives. • They live life at a relaxed pace and enjoy intellectual challenges, arts and culture. • INTERESTS & ACTIVITIES • Days out and attractions - those that are geared towards heritage and investigation will appeal to the Traditionals. This includes National Trust attractions, churches and cathedrals and botanical gardens. • They are looking for days out and attractions that are peaceful & relaxing, nostalgic and educational. • Personal interests - include gardening and arts and culture. • Eating & Drinking - For Traditionals, the traditional pub is the type of eating and drinking establishment that holds the greatest appeal. • A good night out - for this segment would be going for a drink or a meal out. • Holidays – Being an older segment, they are most likely to use Saga but also domestic niche operators (e.g. English Country Cottages). They are also most likely to use the telephone for booking. • A good short break for Traditionals would give them the chance to escape, slow down and do their own thing. • Media – Enjoy news, history and nature programmes on TV. • DEMOGRAPHIC PROFILE • 10% of the GB population • Older profile; 73% over 45; 53% over 55. • 57% with internet access • 21% with children at home • 51% married or living as married; 28% widowed, separated or divorced • 43% C1C2; 36% DE • 58% taken an overseas holiday in past 3 years • 41% retired; 31% working full time

44. Habituals • OUTLOOK • The Habitual segment is most likely to value a more relaxed pace of life. • They are strongly traditional, and very resistant to any expenditure. Though this is possibly a reflection of their poor means. • They are probably strongly resistant to change. • They will make purchase decisions on function rather than style. Fashion has little value to this group. • They are also very risk averse and show little interest in new options or opportunities. • This group has and spends little money, not for brands or for service. They find it hard to justify expense of any sort. • They have no interest in arts or culture. • INTERESTS & ACTIVITIES • Shopping – Not really big on shopping. They are not interested in fashion or new technology. Being of lower income then they tend to shop in the perceived cheaper stores e.g. Costcutter, Budgens & Morrisons. • Days out and attractions – Prefer to go to heritage based attractions that involve of bit of investigation. They are looking for a peaceful and relaxing experience from their days out. Transport museums appeal to this segment. • Eating and drinking – Do not eat out very often but when they do they are drawn to traditional establishments like Harry Ramsden’s, Beefeater or Toby Carvery. • Holidays – This segment is least likely to take a holiday. If they do then they are likely to go to a familiar destination that they have been to before and it has to be cheap. It is more likely to be in the UK than abroad. • Media – This segment is the one who watches TV the most and their favourite type of programme is the news. In terms of newspaper readership they favour paid for local papers ahead of the Daily Mail and the Sun. • DEMOGRAPHIC PROFILE • Represent 8% of the GB population • Oldest of the segments – 57% over 55 years • 81% retired or post family • 35% widowed/ separated/ divorced • Lowest income of all segments

45. Followers • OUTLOOK • Followers are a group that is strongly influenced by others around them. • They have a similar aversion to what might be considered old fashioned as style hounds but much less interest in new and fashionable options. • They avoid risk and not particularly interested in trying new options. • They will not take many risks in life, and lag behind other markets when it comes to new products and services. • Whilst they are unlikely to value things that are new and different, they will try things that are new to them as individuals. • They do value service, but not necessarily individual attention. • They have little interest in intellectual challenges, arts & culture. • They are not a very active day visit segment. • INTERESTS & ACTIVITIES • Shopping – Local convenience stores (e.g Spar) are popular choices for their groceries. Asda is the brand of choice for the big supermarkets. • Days out and attractions – This segment is not very active in terms of days out but the sort of attractions that appeal are entertaining and fun. Safari Parks and theme parks are appealing. • Eating and drinking – Followers do not eat out very frequently. The choice of eating establishment is geared towards fast food or places to take the children. McDonalds and Pizza Hut are appealing. • Holidays – Followers are more likely to take a holiday in the UK than overseas. They types of holiday company that appeal are Butlins, Haven Holidays and Centreparcs • Media – The main newspapers read by Followers are The Sun and The Daily Mail. They enjoy computing and video gaming magazines as well as celebrity gossip magazines. Films and comedy are the preferred programme choices on TV. • DEMOGRAPHIC PROFILE • Represent 13% of the GB population • 50% between 25 and 44 years • 58% married – highest proportion of all the segments • 50% have children (either at home or left home)

46. Workshops … • Working as groups you will be asked to prepare a presentation giving your recommendations on how to attract certain segments; • Cosmopolitans • Discoverers • These segments have been chosen as they appear to be under-represented in terms of the profile of visitors to the region. • We would like you to work as a group to develop; • Itinerary of activities for each segment that they might be attracted to on a short break (Arriving Friday PM – Departing Monday PM). • Assume that the group is an adult couple (no children) visiting during the shoulder period. • Firstly think of a theme on which to base the itinerary, and make sure that Coastal and Rural product is used. • This needs to cover; • Accommodation • Places to Eat • Destinations to visit • Activities to undertake • Daytime / evening coverage • We will allocate you to a group on the day. It is our intention to mix up delegates in order that each group is represented by a wide a range of organisations.

47. Next Steps • Useful to have some insight already… but need to gather some data specific to Dorset as well as for key destinations in the region • More specifically need for information to gather; • Visitor Profiles • Brand Values (perceived & actual) • By establishing these now, we can identify what each part of the region means to different segments and begin to be more strategic in our marketing • Primary research will therefore allow us to; • Develop key marketing themes • identify suitable marketing partnerships amongst stakeholders • Obtain benchmarks on which to measure ROI on future marketing activity • Can put together packages of work that involve; • Short and longer term proposals • Demonstrate the Pros & Cons of each approach and associated Ballpark Costs