Academic journal article Journal of International Business Research

Entrepreneurial Opportunity Recognition through a Market Segmentation of a Selected Filipino Youth Market

Academic journal article Journal of International Business Research

Entrepreneurial Opportunity Recognition through a Market Segmentation of a Selected Filipino Youth Market

Article excerpt

Youth travel is of special interest because a considerable number of Filipinos belong to the youth population. By focusing on the youth market, tourism enterprises can maximize considerable business opportunities. This study, using several known motivations and activity preferences of travellers, identified major push motives of young students.

Factor analysis of responses from 117 students revealed four push motives, namely, nature and wellness, education, meeting people and relaxation and unique experience. Young students have been found to travel from the hustle and bustle of city life and contemplate nature, learn, rest, interact with other people and acquire a different kind of experience.

Cluster analysis of responses from 95 students resulted to two market segments, the "enthusiasts" and the "moderates". The "enthusiasts" score higher in the motivations and activity preferences used in the study. The two groups can also be distinguished in terms of age, gender and monthly family income.

The young Filipino traveller is at least "midcentric" using Plog's typology. Product development efforts can be carried out using the findings of the study.


Throughout the years, tourism has emerged as a major national income earner for the Philippines. Since the creation of the Ministry of Tourism in the 1970s, it has become a major contributor to the Philippine economy starting in the 1990s. It currently accounts for 4-5% of the nation's Gross Domestic Product and employs more than three million Filipinos.

Experts of world tourism say that consumers are no longer the same consumer decades ago. The Fordian paradigm of mass tourism with its standardized vacations and rigid packages is becoming obsolete. It has been in force immediately after the Second World War until the early part of the 80s. We are now in what is dubbed as "the New Age of Tourism". Consumers have transformed from being homogenous, having basic motivations and without previous experience to heterogeneous consumers who are experienced, unpredictable and more demanding. Suppliers are realizing that the Fordian paradigm is no longer adequate to address the challenges of competition.

This change in the nature of the consumer of tourism products can lead to many entrepreneurial opportunities. In terms of personality types, consumers can be classified as allocentrics, psychocentrics and midcentrics. Allocentrics, psychocentrics and midcentrics are personality types in Plog's psychographic typology (Weaver & Oppermann, 2000). The model is used for psychographic segmentation. Allocentrics and psychocentrics are extremes in Plog's bell curve. Allocentrics and near-allocentrics satisfy their intellectual curiosity by seeking adventures that allow them to immerse themselves in other cultures. In contrast, psychocentrics minimise risk by patronizing familiar destinations where usual goods and services are available. Midcentrics are between the psychocentric and allocentric characteristics. Today's traveller has been observed to be allocentric.

An understanding of the tourism market is vital to the growth of the industry. The tourism market has to be understood if it is to be served well and its profit potentials are to be realized. Among the different tourism markets, the youth population of the Philippines is a good target market. There are more than 20 million Filipinos included in this market.

Opportunity recognition, which consists of identifying possibilities for new profit potentials, is a critical task for tourism entrepreneurs. It usually entails significant improvements in product offerings. However, for product development to be effective, there is a need to understand the characteristics of the Filipino youth market. There is a need to look into their motivation and preferences on which their purchase of tourism products depends. Moreover, market segmentation is a powerful marketing tool to identify homogenous groups among the selected Filipino youth market in terms of their motivation and activity preference. …

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