Market segmentation of visitors to Aardklop National Arts Festival : a comparison of two methods
The Aardklop National Arts Festival is one of the three largest arts festivals in South Africa. Arts festivals such as Aardklop are also one of the most rapidly growing events tourism segments. It sustains different forms of art; contributes to the livelihood of artists; stimulates the growth of regional and local economies; and promotes specific destinations. Destinations realise the benefits associated with arts festivals, thus there has been a remarkable increase in the annual number of festivals hosted by different destinations. However, the competition in the festival market has important implications for all South African arts/cultural festivals. In order for a festival to be sustainable, and to reap the continuous economic contribution and benefits that festivals offer, the importance of effective/strategic marketing of the festival must be realised. An essential step towards strategic market planning is market segmentation. It is an effective tool to divide existing and potential markets into homogenous groups/segments based on meaningful characteristics. This assists marketers/organisers of the festival to understand the needs and preferences of these segments; and to adjust the festival product/programme accordingly. A variety of methods is available for market segmentation. Two such methods are correspondence analysis and expenditure-based segmentation. The primary goal of the study was to apply and compare these two market segmentation methods of visitors to Aardklop National Arts Festival. A literature study was undertaken to analyse arts festivals, market segmentation and specific market segmentation methods; and an empirical study was undertaken to obtain the relevant data for analysis. Surveys were conducted at the festival and data obtained from 2005 to 2008 was used. Questionnaires were distributed randomly during the 5day festival period, and a total of 1 671 questionnaires were completed. In order to achieve the goal, the study was divided into 2 articles. In Article 1, a correspondence analysis was applied to visualise the relationship between the age of respondents and other variables. Results confirmed the existence of significant differences in sociodemographic and behavioural variables/characteristics between different age groups of visitors to Aardklop. Older visitors (46 years and older) are associated with higher spending and attend shows/productions such as drama, classical music, cabaret and visual art and exhibitions. They are also more likely to hear about Aardklop in the written media such as magazines, newspapers, newsletters and e-mail; to stay for shorter periods of time; and to come from the Gauteng and Free State provinces. Younger visitors (aged 18 to 25) are associated with the lowest spending and rely on word-of-mouth as a source of information through which they hear about Aardklop. They are more likely to come from the North West province, to attend rock shows/concerts and to attend the festival for longer periods of time. These results rendered strategic insights regarding marketing, since a market profile of different age groups of visitors can be formulated, and the festival product/programme can be developed according to their needs and preferences. As a result, the current market can be maintained and emerging markets can be identified and targeted, resulting in long-term growth and sustainability of the festival. In Article 2, K-means clustering was done to group members together, based on their similarity with regard to spending patterns/behaviour so that these clusters could be used in the ANOVA analysis. The ANOVA analysis was applied by using the identified clusters to do expenditure-based segmentation. In the results, 4 expenditure segments were identified and the analysis confirmed the existence of significant differences in socia-demographic and behavioural variables/characteristics between these different expenditure groups among Aardklop visitors. The high spenders are between the ages of 46 and 60 years, stay for longer periods of time and travel longer distances to the festival. They have attended other festivals as well in the past and their main reason for travelling to Potchefstroom is to attend Aardklop. These visitors prefer to attend drama and cabaret shows/productions and they are likely to travel from Gauteng. Based on these aspects, the high spenders can be differentiated from other spending segments. This is beneficial to the marketers/organisers of Aardklop, since it assists in maintaining the high spending market by fulfilling their needs/preferences, while also motivating them to spend more on ticketed shows/productions. The untapped spending potential in the other spending segments were also identified, along with detailed descriptions of these segments. Marketers/organisers of Aardklop can therefore also target these segments through customised packages, which can eventually convert members in these spending segments to higher spenders, thereby expanding the high spending segment. This will maximise the economic impact of Aardklop and will result in the competitiveness, sustainability and further growth of the festival. The correspondence analysis as a market segmentation method, although exploratory, is a sophisticated technique that gives a powerful and comprehensive visual representation of the relationship I possible associations between variables and respondent age groups. However, this method does not always provide a detailed profile of each age category. Expenditure-based segmentation as a market segmentation method offers a good range of information and has been found to provide a more detailed profile of each spending segment, as opposed to the profiles identified in the correspondence analysis. However, since both these methods can be used for effective segmentation of the Aardklop market, it is important to consider what exactly needs to be accomplished in the marketing research, so that the more appropriate market segmentation method may be selected.