Segmentation is the process of dividing potential consumers into groups based on shared characteristics. There are probably as many methods to segment consumers as there are different external and internal personal characteristics. The choice of which method to use when segmenting consumers depends on the features of the product and the benefits it provides. For example, a company marketing organic hair coloring may target older, well-educated women who desire a youthful appearance, are concerned about the environment, and live in urban areas anywhere in the United States. A small caf may target large families who live in the neighborhood, have low incomes, and want an inexpensive, quick meal. Both the company and the caf cannot design their promotion until they know their segment.

Geographic, demographic, psychographic, and usage segmentation are the most important segmentation methods to consider when segmenting the market of potential tourists. Geographic segmentation targets potential tourists based on where they live. Via geographic segmentation, potential tourists can be targeted locally, regionally, nationally, and internationally. Demographics refer to the external characteristics or facts about the potential tourist that can be easily identified and quantified. These characteristics include the tourist's age, gender, family life cycle stage, ethnicity, income, education level, and religious background.

Psychographics refers to internal characteristics that are not immediately apparent. These psychographic characteristics are usually shaped by family and life experiences and include the person's values, lifestyle, and social class. Usage segmentation refers to how consumers use the product. For...