tams 2006 u.s. loyalty segmentation 2006...1 presented to yprésenté à the ontario tourism...

1

Presented to Présenté àThe Ontario Tourism Marketing Partnership Corp.

The Ontario Ministry of Tourism

January 15, 2007

TAMS 2006

Loyalty Segmentation of the U.S. Travel Market

Ontario Report

2©2006 TNS Canadian Facts

Table of Contents

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FOREWORD ..................................................................... 3 EXECUTIVE SUMMARY .................................................. 6 GENERAL SUMMARY ..................................................... 12Introduction to the Conversion Model ............................... 13Defining US Source Markets Relevant to Ontario ............ 18Commitment to Ontario by Tier ......................................... 23 GENERAL SUMMARY — Tier One Detail ...................... 26Commitment Segmentation............................................... 27Traffic and Switching Patterns .......................................... 33Travel Drivers and Choices............................................... 37Travel Activities and Interests ........................................... 45Volume Potential of The Segments .................................. 48Commitment Segment Profiles ......................................... 51 GENERAL SUMMARY — Tier Three Detail ................... 58Commitment Segmentation............................................... 59Traffic and Switching Patterns .......................................... 66Travel Drivers and Choices............................................... 68Travel Activities and Interests ........................................... 75Volume Potential of The Segments .................................. 87Commitment Segment Profiles ......................................... 90 APPENDIX ........................................................................ 97Conversion Model Background......................................... 98

More Detailed Information On The Conversation Model ............................................................................. 99States of Mind ................................................................ 111


Foreword

BACKGROUND

Tourism is one of Canada’s major export industries, with US residents representing the greatest source of international tourism revenue. In order to develop marketing strategies and travel products to attract US visitors to Ontario and other Canadian destinations, a large-scale travel survey, known as the Travel Activities and Motivations Survey (TAMS), was conducted in the US approximately four years ago. Since that time, TAMS has proven to be of considerable value in that it provides a comprehensive assessment of travel behaviour and motivators of this target US market.

To offer continuity with and simultaneously build upon TAMS, an association of government ministries, organizations and tourism/hospitality groups across Canada (the Partnership) have collaborated in order to conduct a second wave of TAMS research (TAMS2). As such, TNS Canadian was commissioned to conduct a travel survey with members of its US mail panel.

OBJECTIVES

Specifically, the objectives of this study are to:

Establish tourism needs states and define needs-based consumer segments;

Assist in better tailoring tourism products to existing needs;

Help establish the tone and content of advertising support and related communications; and,

Assist in effectively targeting marketing initiatives to specific needs-based and geographic forms of segmentation.


Foreword (cont’d)

RESEARCH METHODOLOGY

A total of 60,649 TNS panelists participated in this self-administered mailback survey and were included in the final in-tab sample between January 5 and April 25, 2006. A telephone survey was conducted with non-responders from February 15 to March 19, 2006.

The questionnaire was adapted from the previous TAMS questionnaire, incorporating the current information needs expressed by the Partnership. Prior to the start of fieldwork, the questionnaire was tested qualitatively in Canada during the summer of 2005 to ensure the workability of the questionnaire and to finalize question wording. Minor modifications were made to the questionnaire based on the pretest results.

Completed questionnaires were scanned and processed using TNS’ in-house computer facilities. The data were weighted to adjust for proportion to current US Census Bureau data in terms of age within gender by individual CMA. The following table details the number of completions and the weighted total by region.

8,608

4,779

4,382

1,907

9,779

4,426

11,533

9,684

1.632

Total Actual

33,192Pacific

15,031Mountain

24,854West South Central

13,047East South Central

42,603South Atlantic

13,692West North Central

33,941East North Central

27,117Middle Atlantic

8,382New England

Total Weighted(in thousands)Census Divisions

Sample Design


Foreword (cont’d)

For a more complete description of the research methodology, please refer to the Report of the Methodology.

THE STUDY FINDINGS

Results of the research are presented under the following main headings:

Executive Summary

General Summary

Appendix• Questionnaire• The Conversion Model

NOTE OF CAUTION

Data derived from sample populations are subject to variance. In order not to imply an unwarranted degree of precision, all percentage figures in the General Summary have been rounded to whole numbers; therefore, percentages may not total 100.

Throughout the General Summary, bold underlines have been used to denote unusually high figures at the 95% confidence level.

Further, it should be noted that percentages derived from “actual” bases of less than 100 respondents should be interpreted with caution, while percentages derived from “actual” bases of less than 50 should be interpreted with extreme caution.

January 2007

6

Executive Summary


Executive SummaryIntroduction

Results of this analysis suggest that the Province of Ontario faces a challenging road in its US source markets if it is to both defend its current position in the tourism marketplace and re-establish a growth trajectory. In order to meet this challenge, it is clear that creative reassessment of current marketing strategies and product offerings should be undertaken. The “prize” could be a significant one, however, in that there is evidence of very real opportunity to reinvigorate the brand and stimulate growth in the US. It is also encouraging that these findings do not point to a need to overhaul the brand or adopt a fundamentally different positioning strategy. Instead, there is perhaps an opportunity to broaden the positioning “around the edges” and, to take a more aggressive approach to promoting the brand and the product offering in strategically important markets that have not traditionally been focal points for Ontario.

There are, without question, a number of analytical paradigms that can be applied to an assessment of Ontario’s standing in the tourism marketplace. This study is founded on an approach that integrates geographic proximity with an objective assessment of traveller affinity with Ontario as a possible pleasure travel destination. As such, this work offers but one of many possible perspectives on the marketplace. It does, however, deal with two fundamentally important constructs of market opportunity (distance and psychological association or connection). Moreover, the results derived through application of this approach seemingly provide some clarity when it comes to understanding the challenges ahead, assessing the magnitude of the opportunity and deriving recommendations that have practical utility and are consistent with what we already know.

Overview

We have identified two geographic regions as strategic focal points for Ontario: Tier One and surrounding areas (essentially, the traditional Near Markets) and Tier Three (the remainder of the Great Lakes States and US Northeast). These regions have been singled out because they have distinctive relationships with Ontario, have different roles to play with respect to enhancing Ontario’s volume potential in the US, and offer dissimilar forms of opportunity that impact marketing and product in distinctive ways.

The one ubiquitous characteristic cutting across both of these tiers, is the strong overall appeal generated by Ontario as a potential tourism destination. Ontario is at least as well received as any of its direct competitors among travellers in


Executive Summary (cont’d)

these tiers who are most capable of fuelling future success. Although Ontario may generate relatively little excitement or enthusiasm, this strong generic appeal provides a solid foundation upon which to build momentum.

A brief synopsis of the state of affairs in each of these tiers is given below.

Tier One

This represents the Near Market urban core (Buffalo, Rochester, Detroit, Cleveland and Pittsburgh). Marketing initiatives have been focused on these DMAs during the recent past (with the possible exception of Pittsburgh), and incidence of travelling to Ontario is elevated in all five. Tier Two shares much in common with these source markets, for it essentially constitutes the regions surrounding the core urban agglomerations that are in close proximity to the Ontario border. However, Tier One does present itself as a legitimate focal point for marketing efforts, given the importance of population density in establishing marketing efficiency.

Unlike the other Tiers, Tier One (and Tier Two) has strategic importance with respect to feeding both the same-day and overnight tourism volume streams for Ontario. Although the TAMS survey does not deal with same-day travel in any comprehensive way, this fact should be kept in mind, for it not only elevates the importance of the nearby tiers, but it also plays some role in structuring the nature of the Ontario tourism experience and perceptions driving familiarity with the Province among travellers resident in these areas.

Most travellers in Tier One have some degree of familiarity with Ontario and most have taken a trip to the Province at some point in the past. Awareness building is not an issue. However, there is only a small pool of travellers in this market who have not visited within the past two years and are open to the idea of considering a trip to Ontario in the future. In this sense, growth opportunities are limited. Indeed, the most significant challenge in this market is defensive in nature – specifically, convincing the large pool of past visitors who are currently uncommitted to Ontario to consider returning. To a considerable extent, this means exciting them about what Ontario offers that: is consistent with their needs; is in keeping with Ontario’s strengths (has credibility); but is different from what they may have experienced in the past. In other words, widening the range of product made available and communicated to these travellers.



It is important to emphasize that there is no need to drastically alter Ontario’s fundamental positioning or targeting strategies in order to motivate this group. These individuals fall across similar life-stage segments and have similar interests to those who express stronger commitment to the Province. They also highly value the safety and diversity of experience that Ontario could afford them. There is, however, evidence that the Uncommitted tend to be younger, and are correspondingly also interested in some of the more youthful and perhaps less sophisticated tourism pursuits. Furthermore, they may be willing to range farther afield in order to experience them, opening Ontario up to a wider competitive set.

It can be argued, then, that while Ontario’s core product categories should continue to be emphasized in Tier One, more innovative expressions of those categories might be given some weight with respect to the actual activities, places or attractions selected for promotion and the way in which they are presented or packaged. As well, emotive elements related to fun, indulgence and pure recreational enjoyment might be placed somewhat more centrally as part of the offer than is currently the case (amusement parks, beaches, recreation, etc.).

Tier Three

Tier Three offers significant growth potential in a region that is reasonably contained geographically (unlike Tier Four) and represents a segment of the US population in which there is some base-level of appreciation or understanding of the Province (arguably, again unlike Tier Four). There is a very large pool of travellers in this Tier who are clearly open to the idea of considering Ontario for future visitation and can be reached through strategically placed marketing initiatives directed to a somewhat confined geography.

If Ontario is to attract large numbers of new overnight visitors, then attention will ultimately have to be paid to this tier, since the chances of achieving success in these terms are far greater here than in markets that are closer by. This is true even if the decision is made to limit the effort to a few key urban markets within this populous region. In a sense, Ontario has a competitive advantage over many other competing destinations in that it is within reasonable proximity of some of the largest population concentrations in the US and is capable off offering tourism experiences that can be positioned as distinctive in some ways from the US domestic product.



Moreover, the travel interests of non-visitors in Tier Three who are open to Ontario are, in many ways, consistent with the Province’s current core offering and with the activities and interests that have played a role in attracting visitors to Ontario, both here and in regions closer to the border.

When a comparison is made between Open non-visitors and recent Ontario travellers resident in Tier Three, it becomes apparent that the patterns of travel activities and interests are very similar. However, the latter group tends to have a more evolved and broader pattern of interests (virtually all travel activities are associated with higher incidence levels among Ontario visitors). This has two implications.

1. To date, Ontario has tended to be added to the destination repertoire of those seeking a wide variety of tourism experiences. It, can be argued, then, that it often plays a secondary role in the destination consideration set among many of those seeking variety.

2. Open Non-visitors tend to have less well-developed interests, at least with respect to breadth, and therefore must be carefully aligned with relevant product in any effort to attract them.

What seems critical in this regard is to place emphasis on those elements of the product offering that are associated with the emergence of the Open group from the larger population of travellers in Tier Three who are effectively unavailable to Ontario at the present time (through lack of interest, understanding or perceived congruence with need). Of some significance, this would appear to constitute a product cluster that is consistent with the current core offering –nature, cultural attractions, history and the urban experience.

What seems to be needed in Tier Three is not a new approach or the presentation of new product, but rather a stronger voice among competing destinations and some success in raising of Ontario’s awareness profile and appreciation of the main product elements offered.

Implications

The tenor of this analysis suggests a need to adopt a two-pronged approach if Ontario is to protect its interests in Tier One and capitalize on growth opportunities in Tier Three. A dual approach is necessary given that the two tiers have inherently different relationships with Ontario, different levels of familiarity and vary with respect to ease of access.



In Tier One, there is a need, perhaps to go to a new level by rekindling interest in Ontario through efforts to broaden the repertoire on the same positioning platform. This means embellishment and adding depth, rather than re-invention, and also suggests an opportunity to work with a broader palate of intended emotional responses.

In Tier Three, the essence of Ontario needs to be placed front and centre on the stage. At the present time, the province is hidden in the wings to some degree. It is understood, of course, that the budget is not available to target Tier Three in its entirety. Still, an argument can be made to selectively target a few key population centres in this region.

Finally, it is important to recognize that there are two two sets of competitors that offer primary competition to Ontario and against which it must achieve some success as a tourist destination in the US. The first of these consists of the nearby border states such as New York and Ohio. The second is represented by US tourism regions that have very broad reach – Florida being primary among them. Although the latter may not be directly competitive, these destinations are nonetheless capable of attracting a large share of available pleasure travel dollars. Ontario must, therefore, be provided with enough innate appeal to reserve its share of tourism dollars within this competitive environment.

12

General Summary

13

Introduction to the Conversion Model


Introduction to the Conversion Model™

The concept of the Conversion Model™ is simple. It is a psychological model that measures the strength of the relationship between people and something else – a brand, a service, a political party, a travel destination, and so forth.

In the study reported herein, we measured how committed people are to their chosen destinations for leisure travel. The focus is on the commitment to selected destinations within Canada and the US.

For more information on the Conversion Model™ and how to interpret the charts, please refer to the appendix.


Introduction to the Conversion Model™ (cont’d)

Conversion Model™ segmentation is a powerful tool within the context of consumer research for destination marketing. This model adds value to the data analysis by providing meaningful consumer segments based on their psychological attachment to Canada and competing destinations for vacations or their openess to visiting Canadian versus competing destinations.

Exclusive to TNS Canadian Facts, Conversion Model is the leading model for understanding customer commitment and customer acquisition. Used by 80% of the top brands in the world for developing market share acquisition and customer base protection strategies, over 6,000 Conversion Modelstudies have been conducted since it was first developed. Within the Canadian tourism sector, Conversion Model has been used by a number of clients, including those in the tourism sector.

We need to understand which segments travellers are truly open to Canada and which ones are not, and what drives commitment to Canada andcompeting destinations. How many travellers are available and open to the idea of a vacation trip to Canada? Conversion Modeleffectively quantifies these issues and provides an accurate portrayal of the consumers in the market that represent the best opportunities for Canada.


What is the Conversion Model?

The Conversion Model segments people into one of eight segments according to the strength of their relationship with the various destinations …

Visitors Non-Visitors

CommittedVisitors

UncommittedVisitors

OpenNon-Visitors

UnavailableNon-Visitors

Entrenched Average Shallow Available Ambivalent StronglyConvertible

The eight segments are further grouped into four primary segments…

WeaklyUnavailable


Brand Health Indices

=

=

=

Commitment Index(ability to stimulatecommitment among users)

Potential Index(potential to acquire new users relative to attrition of existing ones)

Attraction Index(ability to interest non-users)

% committed for brand AAverage % committed

% potential for brand AAverage % potential

% attracted to brand AAverage % attracted

x

x

x

100

100

100

The commitment, attraction and potential indices are metrics typically used with Conversion Model to give some sense of momentum and potential among brands or, in this case, destinations in the competitive space. These indices are calculated as follows.

% committed = committed users/total users

% attracted = open non-users/total aware non-users

% potential = open non-users/(open + uncommitted)

18

Defining US Source Markets Relevant to Ontario


Market Tiers

The Conversion Model analysis was conducted separately for specific market areas in the US, recognizing that Americans’ relationship with Ontario differs markedly by region.

Regions or Tiers relevant to the exercise were defined in terms of geographic proximity and known regional focal points for Ontario’s core marketing strategies during the past few years. The latter represent areas receiving relatively heavy levels of marketing investment on a consistent basis and having an elevated experiential connection with the province.

The Tiers isolated on the basis of these spatial and marketing criteria are defined in detail on the following pages.


Definition of the Market Tiers for the Ontario Conversion Model Analysis

Tier 1: Near Market DMAs representing the primary advertising focal points for Ontario tourism and exhibiting elevated levels of past visitation to the province.

Rochester ClevelandBuffalo DetroitPittsburgh

Tier 2: Remaining countries in the US within 300 km of the Ontario border.

Tier 3: All remaining areas of the following states not falling into Tiers 1 and 2.

Minnesota Maine PennsylvaniaWisconsin Vermont MarylandMichigan New Hampshire &Illinois Massachusetts Cincinnati DMAIndiana Connecticut Washington DC DMAOhio Rhode IslandNew York State Delaware

Tier 4: Remainder of the U.S.


US Market Tiers

Quebec City

Montreal

Ottawa

Toronto

SyracuseBuffalo

New York

Pittsburgh

Detroit

Cleveland

Boston

Columbus Washington

Cincinnati

Milwaukee

Indianapolis

Chicago Philadelphia

Minneapolis

Tier 4(remainder of US)

Rochester

Tier 2Tier 3

Tier 1 DMAs


Focal Points for the Analysis

As previously mentioned, the Conversion Model analysis has been conducted separately for specific market areas in the US. This approach recognizes that Americans’ relationship with Ontario varies widely by region, as does their knowledge and appreciation of the province’s tourism offering.

Regions or Tiers that are critical to Ontario’s future success, but are likely to require different marketing approaches have been singled out for special attention in this report.

Tier 1: The relationship with Ontario is best developed in this region. Potential travellers have some degree of familiarity with the offering, have been consistently subjected to advertising and promotional support and are likely to be responsive to a relatively sophisticated message and overtures for both longer and shorter visits. Tier 1, in essence, represents the Near Market core.

Tier 3: Residents of this Tier live within reasonable proximity of Ontario. They are, however, considerably less attuned to the offer and have a wide array of competitive destinations to consider that fall within the same price/convenience range . Nonetheless, sheer population size makes this a potentially important region from the perspective of generating long-term volume growth.

This report will provide basic comparative information for all four Tiers, but in-depth analysis will be reserved for Tiers 1 and 3 for the reasons given above.

With respect to all Tiers, the Conversion Model analysis is restricted to individuals who have taken a pleasure trip within the past two years to at least one of the 18 destinations for which Conversion Model questions were asked. This represents approximately 46% of the total US adult population.

23

Commitment to Ontario by Tier


37

27

12

4

11

8

4

1

12

14

19

19

52

66

75

40

Conversion ModelTM Brand Health ChartFor Ontario By Tier

Committed Uncommitted Open Unavailable

% Visitors % Non-Visitors

Ratio of Open to

Uncommitted

0.32

0.52

1.59

4.75

Tier 1

Tier 2

Tier 3

Tier 4

Ratio of Committed to Uncommitted

0.30

0.30

0.33

0.25

Tier One clearly represents the core source region for Ontario in terms of market penetration achieved. However, future growth potential is limited. In fact, there is more potential to lose repeat visitation among recent visitors from Tier One than to attract non-visitors (see ratio of Open to Uncommitted). By contrast, significant opportunity exists in Tiers Three and Four in these terms, with the former standing out as offering realistic opportunities for immediate conversion judging by the penetration levels achieved during the recent past. It is worth noting that Ontario’s capacity to stimulate commitment among recent visitors is roughly the same in all four Tiers (about 30%). Geographic differences exist in terms of the ability to attract, not impress.


Projected Size of the Most Relevant CM Segments For Ontario By Tier

Tier 4

Committed VisitorsUncommitted Visitors

Open Non-Visitors

Projected Population Size of Each Segment (in thousands)

652

1,912

575

634

1,217

365

5,446

3,273

861

7661,610

12,343

UnavailableNon-Visitors 2,122 2,364 18,948 47,712

Tier 1 Tier 2 Tier 3 Tier 4

The dilemma faced by Ontario with respect to attracting larger numbers of visitors is clearly illustrated below. The pool of potential visitors is small in its core markets. On the basis of sheer numbers, new growth opportunity is significantly greaterin Tiers Three and Four. However, the geography involved is so expansive and Open Non-visitors so diffuse, that a very substantial marketing effort would be required to reach and motivate them. Tier Four is especially problematic in this sense.

26

General SummaryTier One Detail

27

Commitment SegmentationTier One


44

44

42

37

33

28

30

27

31

24

20

18

14

19

1

5

6

10

2

26

47

35

34

36

47

44

41

56

36

41

40

40

10

22

24

25

15

20

28

12

35

36

42

45

6

9

Hawaii

Prince Edward Island

Alberta

California

British Columbia

Colorado

Florida

Arizona

Nova Scotia

New York State

Ontario

New Brunswick

Quebec

Entrenched Average Shallow Convertible

Strength Of Commitment To The Destinations VisitedTier One

*Caution: Small base sizeNote: Only brands with >29 users are shown

% Committed

64

44

43

42

39

38

36

32

31

29

23

18

16

% Uncommitted36

56

57

58

61

62

64

68

69

71

77

82

84

In Tier One, Ontario emerges as one of the weakest overnight travel destinations when its ability to attract and sustain commitment among recent visitors is considered. To some degree, proximity and familiarity may work against the Provincein the sense that it may have often been selected in the past on the basis of convenience rather than compelling desire. In any case, the large proportion of Convertible visitors is cause for concern and suggests potential for share erosion.


Attraction Index

Potential Index

Commitment Index

31

36

24

9

7

4

2

3

1

17

11

9

6

3

2

3

1

1

21

12

20

35

33

34

53

24

21

32

43

43

49

48

34

52

44

8

5

6

8

11

7

21

33

28 3Florida

Ontario

New York State

California

Arizona

Colorado

Hawaii

Quebec

British Columbia

Conversion ModelTM Brand Health ChartSummary Of The Overall Positions Of Destinations In Tier One

Read: For Ontario: 11% of the market is Committed, 36% is Uncommitted, 12% is Open & 32% is Aware Unavailable. 8% of the market has not considered Ontario. Commitment is 27 points below the market average, Potential is 67 points below the market average, and Attraction is 14 points below the market average.

Committed Uncommitted Open Aware Unavailable Unaware Unavailable


n = 2,718

114 53 133

73 33 86

90 60 98

131 104 140

100 109 126

119 119 130

200 127 190

49 116 99

124 125 101

When considered within the broader market context (total travellers in Tier One), Ontario is evidently among the market leaders in terms of penetration achieved, but there is little passion driving this performance. Ontario’s capacity to interest non-visitors and to generate commitment among recent visitors is below average. Of particular concern is the exceptionally low growth potential it exhibits – largely a function of weak commitment among past visitors.


1

1

19

13

20

13

10

10

14

15

13

46

45

48

48

49

50

50

48

39

34

39

42

41

36

35

39

47 32Nova Scotia

New Brunswick


Alberta

Manitoba

Saskatchewan

Yukon

Northwest Territories

Newfoundland and Labrador

Conversion ModelTM Brand Health Chart (contd.)Summary Of The Overall Positions Of Destinations In Tier One

Read: For Nova Scotia: 0% of the market is Committed, 1% is Uncommitted, 19% is Open & 47% is Aware Unavailable. 32% of the market has not considered Nova Scotia. Commitment is 2 points below the market average, Potential is 25 points above the market average, and Attraction is 10 points below the market average.


% Visitors % Non-VisitorsAttraction

IndexPotential

IndexCommitment

Index

n = 2,718

98 125 90

57 122 68

139 129 96

136 127 65

- - 53

- - 52

- - 67

- - 72

- - 66


Note: This is simply a graphic representation of the Commitment Index & Potential Index from the brand health chartThe size of the bubble indicates market penetration/brand usage

Explanation of Brand Health Bubble Map

Commitment

Pote

ntia

lAbove average Potential, but below average Commitment. This is a brand that may show growth Potential, but the brand does not deliver and customers are unhappy once they start using the brand – if this is not rectified, Potential gains will be short-lived.

A strong position. High Commitment & high Potential,

showing that the customer base is secure, and there is still room to grow.

Higher than average Commitment, but below average Potential, showing that the brand has

a strong customer base, but there is limited Potential for further growth. This could

indicate saturation or could indicate that this is a niche brand.

Low Commitment, low Potential.This is a poor position, and indicates that the brand is not delivering and will likely not grow under current conditions – in fact it may lose.

Average


Pote

ntia

l

Commitment

Conversion Model™ Brand Health Bubble MapTier One

Note: Bubble size represents penetrationNote: Only brands with >29 users are shown

Nova ScotiaNew BrunswickPrince Edward Island

Quebec

Ontario

Alberta

British Columbia

Colorado

Florida

California

Hawaii

Arizona

Average

New York State

0

20

40

60

80

100

120

140

160

180

200

0 50 100 150 200 250

Poor PositionLow Commitment and potential

Good PositionHigh Commitment and good potential

for further growth

Delivery Problems?Good potential, but low Commitment amongst visitors. Do these destinations fail to deliver once visited?

Strong PositionLeading destinations with high Commitment

The bubble map illustrates Ontario’s vulnerability in Tier One. It’s current penetration level may be difficult to maintain given lack of commitment to return among many recent visitors and the shallow pool of open non-visitors from which to draw.

33

Traffic and Switching PatternsTier One


Not using competitor and at risk of defecting from brand of interest:

Respondents who are Uncommitted to the brand of interest & are not currently using the competitor and rate the competitive product more favorably than the brand of interest

- at risk of defecting to the competitive brand (was percent at risk in original traffic chart)

Using both brand of interest & competitor and prefer competitor:

People who are Uncommitted to the brand of interest and Committed to the competitive brand

– when given a choice are likely to use competitive brand in the future

Using both and could go either way:

People who are users of both brand of interest and the competitive brand, but Uncommitted to both – this is the battleground – users could choose either one in the future or choose a different brand altogether

Using both brand of interest & competitor and prefer brand of interest:

People who are Committed to the brand of interest and Uncommitted to the competitive brand

– when given a choice are likely to use the brand of interest in the future

Not using brand of interest and potential to gain:

Respondents who are Open to the brand of interest and rate the brand of interest more favorably than the competitor. They are Uncommitted users of the competitive brand and have the potential to defect to brand of interest from the competitive brand (was percent to be gained in original traffic chart)

The first & last groups can be read off the traditional traffic tables

The 3 middle classifications can be read off a cross-tab of segments for brand of interest vs. segments of competitive brand

Traffic & Switching Patterns: Definitions


• 3.9 % of the market has potential to try brand 3 in the future

Brand 2

Brand 3

Brand 4

12.9

10.6

6.3

• 10.4 % are using both brands but may switch completely to brand 3

• 10.6 % are using both and are undecided

• 3.1 % are using both brands but may switch completely to you

• 6.1 % has potential to try you in the future

35

Explanation of Traffic & Switching PatternsBrand switching analysis - the “traffic patterns” across all brands

The traffic pattern identifies the key competitors to pursue in detailed analysis of brands

Each brand is evaluated for potential market share loss or gain; which brands will take share - which ones will lose

In this way, strengths and weaknesses of key brands can be considered in strategic initiatives for defense or attack

Client Brand Market Disposition

0.9

8.3

6.13.1

5.13.1

3.9

2.8

10.4

*The comments on this slide do not relate to the data displayed, but are there merely for illustration

Potential to lose to… Potential to gain from …Battleground


1.3

4.30.5

0.10.3

0.10.10.10.1

0.1

10.5

9.0

0.8

1.2

0.2

1.8

5.9

15.7

25.0

15.3

12.111.6

17.5

12.0

9.8

5.85.85.64.14.0

6.4

0.63.22.1

10.41.0

9.02.30.30.40.50.00.70.00.10.30.20.1

0.50.41.20.21.30.50.1

0.1

0.1

0.1

1.1

0.25.7

4.61.3

0.1

0.2

1.80.1

0.20.2

0.1


Traffic And Switching Pattern For Ontario Tier One

Percentages are based off the total marketUncommitted Ontario users;Open non-users of competitor;Competitor more favorable

Using both;Uncommitted to Ontario, Committed to competitor;Prefer competitor

Using both and Uncommitted to both Ontario and competitor;Could go either way

Committed to Ontario, Uncommitted to competitor; Prefer Ontario

Uncommitted to competitor,non-users Open to Ontario; Prefer Ontario

n = 2,718

^Weighted base

HawaiiCaliforniaArizonaFloridaColoradoNew York StateQuebecBritish ColumbiaPrince Edward IslandNova ScotiaNorthwest TerritoriesNew BrunswickYukonNewfoundland and LabradorAlbertaManitobaSaskatchewan

HawaiiCaliforniaArizonaFloridaColoradoNew York StateQuebecBritish ColumbiaPrince Edward IslandNova ScotiaNorthwest TerritoriesNew BrunswickYukonNewfoundland and LabradorAlbertaManitobaSaskatchewan

Ontario currently has more to lose than to gain in relation to each of the other seventeen destinations assessed. Nonetheless, the Province has a reasonable chance of winning travel occasions from its two most well-developed competitors in Tier One –Florida and New York State (the latter likely representative of all border states). These might be considered competitive focal points for marketing Ontario.

37

Travel Drivers and Choices in Tier One

Understanding what motivates those committed to Ontario and those open to choosing it


Travel Drivers and Choices in Tier One Summary

The primary emphasis for Ontario tourism in Tier One should be placed on shoring up support among existing visitors. Essentially, this means converting the large group of Uncommitted to a higher level of affinity with the Province. For this reason, the following profile comparison will focus on the Committed and Uncommitted groups.

With regard to travel motivations, both segments are looking for destinations that meet a multiplicity of needs. However, there is somewhat less breadth to the needs-set evident among Uncommitted travellers. As a consequence, theprimary need to choose a destination that offers relief from the stress of the day-to-day environment is placed even more centrally within the consideration set of this segment. Beyond this, Uncommitted visitors pay a great deal of attention to enriching relationships via shared experiences and memories, and breaking with routine by experiencing something new and different.

Safety of the locale is a widely sought-after destination attribute among Committed and Uncommitted visitors alike, and certainly something to which Ontario can lay claim. Diversity of experience, convenience of access and choice of accommodation are very important to many Uncommitted visitors, but to a somewhat lesser extent than is the case among those strongly committed to Ontario. This perhaps, makes it more difficult to craft a compelling message for the former group - a difficulty that is likely compounded by the stronger draw that sun destinations may have within the Uncommitted segment relative to points north of the border.

Rating scores achieved by Ontario among Uncommitted visitors when assessing its overall appeal as a travel destination are actually quite encouraging. Although certainly not as positively received as Hawaii within this segment and certainly less well received among Uncommitted relative to Committed visitors, Ontario nonetheless stands on par with popular US destinations such as Florida and California within the Uncommitted group and garners wider support than all other destinations presented, including New York State and Arizona. From this it could be argued that Ontario has the potential to retain many of these past visitors with an effective marketing approach and message, and has a reasonable opportunity to encourage greater frequency of visitation and spending among some of those who are currently uncertain about returning.


Travel Drivers and Choices in Tier One Summary

This group seems to need reassurance that Ontario can offer a relaxing, stress-free environment capable of delivering new and interesting experiences when desired. Travellers in this segment may, in fact, be more willing than current Committed visitors to experience some inconveniences with regard to transportation or access in order to achieve these touristic goals. Moreover, there is no indication that price-sensitivities are a greater barrier among the Uncommitted or that they face more significant financial barriers to travel. They, therefore, offer significant volume potential and might be quite receptive to new packaging of product and to the presentation of “new” destinations within the Province that rekindle their interest. This segment is an obvious target group for creative “getaway” packaging.

Ontario’s issues are related more to apathy rather than antipathy within Tier One. The Province’s awareness profile is strong, but as a tourism destination Ontario simply doesn’t generate sufficient enthusiasm to raise the level of certaintyabout future visitation. This leaves the Province prey to a wide range of competitive destinations, as demonstrated quite clearly by the Conversion Model analysis. Given that there is, nonetheless, reasonably strong attitudinal support for Ontario among those who have some past experience with its tourism offering, this situation is malleable and could be altered quite readily through effective promotion of relevant product.


Differentiating Motivations: Vacation Benefits Sought Tier One

Percent Of …Stating HIGHLY IMPORTANT


Vacation Benefits:

Com-mitted

Visitors

Uncom-mitted

Visitors Dif-

ference Total

Visitors

Open Non-

Visitors Dif-

ference Get a break from day-to-day environment 75 74 +1 74 71 +3 Relax and relieve stress 75 73 +2 73 68 +5 Create Lasting Memories 65 56 +9 58 49 +9 Enrich relationship with spouse/ children 64 50 +14 53 45 +8 See or do something different 60 46 +14 48 49 -1 Enjoy life with no fixed schedule 55 51 +4 52 51 +1 Keep family ties alive 50 38 +12 40 43 -3 Enrich your perspective on life 34 22 +12 25 22 +3 Stimulate your mind 31 17 +14 20 21 -1 Gain knowledge 30 16 +14 20 25 -5 Renew connections with people 29 15 +14 18 14 +4 To be pampered 19 13 +6 14 7 +7 Have stories to share back home 19 9 +10 11 9 +2 To be physically challenged 15 9 +6 11 9 +2 Solitude and isolation 14 12 +2 12 13 -1

Significant difference at 95% level of confidence


Differentiating Motivations: Importance of Destination Characteristics — Tier One



Destination Characteristics:

Com-mitted

Visitors

Uncom-mitted

Visitors

Dif-fer-

ence Total

Visitors

Open Non-

Visitors

Dif-fer-

ence Feeling safe 76 72 +4 73 73 ± 0 Lots for adults to see and do 59 47 +12 59 50 +9 No health concerns 51 41 +10 44 45 -1 Convenient access by car 56 46 +10 48 47 +1 Low cost package deals 31 31 ± 0 31 29 +2 Direct access by air 31 27 +4 28 27 +1 Information about destination online 27 28 -1 28 27 +1 Familiar with the culture and language 21 20 +1 20 20 ± 0 Great shopping opportunities 19 16 +3 17 14 +3 Lots for children to see and do 16 15 +1 15 13 +2 Convenient access by train/bus 15 6 +9 8 6 +2 Have friends or relatives there 12 9 +3 10 10 ± 0 Very different culturally from home 10 6 +4 7 7 ± 0 Disabled person friendly 7 7 ± 0 7 8 -1



Differentiating Motivations: Importance of Accommodation Choice at Destination — Tier One




Com-mitted

Visitors

Uncom-mitted

Visitors

Dif-fer-

ence Total

Visitors

Open Non-

Visitors

Dif-fer-

ence

Availability of mid-range accommodation 46 35 +11 38 30 +8

Availability of budget accommodation 27 26 +1 26 23 +3

Availability of luxury accommodation 13 8 +5 9 5 +4

Availability of camping 10 7 +3 8 5 +3



Destination ChoicesTier One

Percent Of … Percent Of …

Destinations Visited In Past 2 Years

Com-mitted

Visitors

Uncom-mitted

Visitors Dif-

ference Total

Visitors

Open Non-

Visitors Dif-

ference US, outside your own state 90 95 -5 94 97 -3 US, within your own state 83 83 ±0 83 82 +1

Quebec 11 9 +2 10 4 +6 British Columbia 2 2 ±0 2 5 -3 Nova Scotia 3 2 +1 2 2 ±0 Alberta 1 1 ±0 1 2 -1 Saskatchewan 1 * +1 * 2 -2 Prince Edward Islands 2 2 ±0 2 * +2 New Brunswick 2 2 ±0 2 1 +1 Manitoba 1 1 ±0 1 2 -1 Newfoundland & Labrador 1 1 ±0 1 * +1 Yukon 2 1 +1 1 1 ±0 Northwest Territories 1 1 ±0 1 * +1 Nunavut – – ±0 – – – The Caribbean 14 21 -7 19 17 +2 Europe (incl. UK & Russia) 11 9 +2 10 10 ±0 Mexico 13 13 ±0 11 11 ±0 South/Central America 3 4 -1 4 3 +1 Asia 3 2 +1 3 2 +1 Australia/New Zealand 2 1 +1 1 * +1 Africa 1 1 ±0 1 1 ±0 Other destinations 4 4 ±0 4 2 +2



Assessment of Potential Destinations for Overall Appeal — Tier One

Percent Of … Giving High

Rating (8,9 or 10) Percent Of … Giving High

Rating (8,9 or 10)

Specific Destinations:

Com-mitted

Visitors

Uncom-mitted

Visitors Dif-

ference Total

Visitors

Open Non-

Visitors Dif-

ference Ontario 99 58 +41 68 62 +6 Hawaii 66 71 -5 70 64 +6 New York State 63 46 +23 50 36 +14 Florida 59 63 -4 62 51 +11 California 56 54 +2 55 44 +11 Quebec 50 31 +19 35 37 -2 Arizona 48 45 +3 46 47 -1 Colorado 45 41 +3 42 45 -3 Nova Scotia 40 21 +18 25 27 -2 British Columbia 38 25 +13 28 33 -5 Prince Edward Island 36 21 +15 25 28 -3 New Brunswick 24 14 +7 16 16 ±0 Alberta 23 12 +11 15 16 -1 Newfoundland & Labrador 21 12 +9 13 18 -5 Yukon 21 14 +7 16 16 ±0 Northwest Territories 21 13 +8 15 17 -2 Saskatchewan 23 12 +11 15 16 -1 Manitoba 19 8 +11 10 12 -2


45

Travel Activities and Interests Tier One


Travel Activity Participation In Past 2 Years – Tier One

Committed and Uncommitted visitors resident in Tier One gravitate to many of the same activities when travelling. In both cases, urban and cultural pursuits enjoy widespread popularity, as does casino-related entertainment. The latterappears to have been a significant driver of tourism traffic sourced from this tier during the recent past, as evidenced by the heightened popularity of casino-related activity among Committed and Uncommitted visitors alike. In neither segment does enjoyment of the natural environment (the Outdoors) achieve the same degree of popularity (although it is still significant) and neither winter nor aboriginal activities attract more than niche interest.

From the perspective of driving commitment, more is to be gained, perhaps, by isolating those activities that differentiate the Committed and Uncommitted segments. From this exploration it becomes clear that Committed visitors are somewhat more inclined to prefer activities that can be classified as having a self-improvement orientation rather than one that is purely recreational. This would include immersion in cultural and learning experiences (including the performing arts and exploring museums), hands-on learning and some aboriginal-related activities. Committed visitors also post elevated levels of interest in simply enjoying the urban environment, visiting sites of historical importance and personally experiencing world renown natural ‘wonders’ . Absorbing the local or regional flavour of life is also more popular among Committed visitors whether browsing in antique stores, spending time in cafes or visiting rural farmers markets or wineries.

In contrast, visitors who are Uncommitted to Ontario are distinguished by the greater emphasis they place on more youthful, participatory activities such as land-based outdoor leisure (including golf and mini-golf), beach/water recreational activities (possibly when staying at seaside resorts), and visits to theme parks, such as amusement parks, or zoos. These , then, might be regarded as product offerings that warrant greater emphasis in initiatives taken to encourage greater commitment to Ontario in Tier One, and appear to be aligned with more direct expressions of entertainment value and the emotive power of enjoyment and ‘fun’.


Travel Activities Differentiating* Committed From Uncommitted Ontario Visitors — Tier One

Percent Of…. Com

mitted Uncom- mitted

Travel Activity Participation (2 Years):

Strolling to observe the city 49 38

Well- known natural 'wonders' 44 34

Local outdoor cafes 47 37

Went to Wineries for day visits and tasting 35 27

Shops or Browse Antiques 34 26

Museums 44 36

Farmers Markets or Country Fairs 32 24

Well- known Historic Sites or Buildings 44 36

Performing Arts 63 56

Botanical Gardens 25 18

Seaside Resorts 15 19

Water Theme Parks 12 17

Mini-Golf 16 22

Swimming in Oceans 27 34

Zoo 23 30

Golfing 12 20

Amusement Park 38 46

Sunbathing or Sitting on a Beach 29 39

+11

+10

+10

+8

+8

+8

+8

+7

+7

-4

-5

-6

-7

-7

-9

-9

-9

+8

Difference

– +

*Difference significant at ∝.05

48

Volume Potential of The Segments Tier One

Frequency and type of travel


Frequency of Pleasure TravelTier One

Percent Of … Percent Of … Number of Overnight Pleasure Trips Taken

In Past 2 Years

Com-mitted

Visitors

Uncom-mitted

Visitors Dif-

ference Total

Visitors

Open Non-

Visitors Dif-

ference

One 7 5 +2 6 5 +1 Two 11 14 -3 13 13 ±0 Three 14 13 +1 13 17 -4 Four 13 14 -1 14 15 -1 Five of More 56 54 +2 55 50 +5

On a per capita basis, Uncommitted Ontario visitors resident in Tier One carry as much weight within the travel sector as does the Committed group. The Uncommitted have the capacity, then, to contribute significantly to the future health of Ontario’s tourism industry both by retaining them as visitors and potentially attracting a larger share of theirtravel dollars .

Frequency of pleasure travel is similar across the two groups as is the degree of involvement with business travel (see following page) .


Incidence of Business TravelTier One

Percent Of … Percent Of … Types of Overnight Pleasure

Trips Taken In Past 2 Years

Com-mitted

Visitors

Uncom-mitted

Visitors Dif-

ference Total

Visitors

Open Non-

Visitors Dif-

ference

Any Business Trip 36 32 +4 33 42 -9 Business Meetings 19 17 +2 17 23 -6 Trade Shows 7 6 +1 6 6 ±0 Business Conventions 5 7 -2 7 7 ±0 Conferences or Seminars 22 16 +6 17 19 -2 Employer-paid Training 13 9 +4 10 10 ±0 Some Other Bus. Trip 13 10 +3 11 12 -1


51

Commitment Segment Profiles Tier One


Commitment Segment Profiles in Tier One Summary

With respect to demographics, Uncommitted visitors are very similar in profile to the Committed, with one notable exception. The former are younger, overall. There is stronger representation of the 35-44 age cohort, and proportionately fewer individuals 55 years of age or older. This could be taken as a signal that Ontario must do more to capture the attention of younger affluent travellers, without losing the allegiances of the key Mature Affluent target.

It should be emphasized that similarity of demographic profile in other respects means that, within Tier One at least, the Uncommitted traveller has the disposable income necessary to support Ontario tourism volume to the level evident among those who are already committed to the Province. Income is not a barrier to commitment.


Socio-Economic Profile: EducationTier One


Highest Education Level Achieved :

Com-mitted

Visitors

Uncom-mitted

Visitors Dif-

ference Total

Visitors

Open Non-

Visitors Dif-

ference

High School or Less 17 16 +1 16 14 +2

Some Post Secondary Other Than University/ College 9 8 +1 9 8 +1 Diploma or Certificate From Post-Secondary School 12 12 ± 0 12 12 ± 0 Some College or University 21 20 +1 20 24 -4 Undergraduate Degree 21 28 -7 26 25 +1 Doctorate, Masters or Degree In Medicine 18 16 +2 17 15 +2



Socio-Economic Profile: IncomeTier One


Household Income :

Com-mitted

Visitors

Uncom-mitted

Visitors Dif-

ference Total

Visitors

Open Non-

Visitors Dif-

ference

Under $20,000 6 5 +1 5 7 -2 $20,000 - $39,999 16 14 +2 15 18 -3 $40,000 - $59,999 17 18 -1 18 20 -2 $60,000 - $79,999 22 20 +2 20 20 ± 0 $80,000 - $99,999 15 19 -4 18 11 +7 $100,000 - $149,999 16 16 ± 0 16 16 ± 0 $150,000 or More 7 8 -1 8 8 ± 0



Household Composition ProfileTier One


Household Composition

Com-mitted

Visitors

Uncom-mitted

Visitors Dif-

ference Total

Visitors

Open Non-

Visitors Dif-

ference

With Your Spouse/ Partner 71 70 +1 70 74 -4 With Children 17 Or Under 22 28 -6 26 21 +5 With Children 18 Or Over 20 17 +3 18 17 +1 Living Alone 14 10 +4 11 14 -3 With Your Mother 7 12 -5 11 9 +2 With Your Father 7 8 -1 8 7 +1 With Your Siblings 7 8 -1 8 7 +1 With Room Mates 5 3 +2 4 1 +3 With Your Grandchildren 3 3 ± 0 3 1 +2


Life Stage ProfileTier One


Lifestage Segment

Com-mitted

Visitors

Uncom-mitted

Visitors Dif-

ference Total

Visitors

Open Non-

Visitors Dif-

ference Young Singles 3 3 ± 0 3 3 ± 0 Middle Singles 6 5 +1 5 8 -3 Older Singles 5 3 +2 4 4 ± 0 Young Couple 7 11 -4 10 9 +1 Working Older Couple 16 13 +3 14 21 -7 Retired Older Couple 10 10 ± 0 10 9 +1 Young Parent 9 12 -3 11 9 +2 Middle Parent 8 9 -1 9 7 +2 Older Parent 34 32 +2 32 29 +3 Room Mates 2 2 ± 0 2 1 +1



Age and Gender ProfileTier One

Travel Percent Of … Percent Of …

Gender and Age

Com-mitted

Visitors

Uncom-mitted

Visitors Dif-

ference Total

Visitors

Open Non-

Visitors Dif-

ference Gender: Male 50 46 +4 47 55 -8 Female 50 54 -4 53 45 +8 Age: 18-24 Years 9 12 -3 11 7 +4 25-34 Years 20 19 +1 19 12 +7 35-44 Years 9 17 -8 15 14 +1 45-54 Years 21 22 -1 22 27 -5 55-64 Years 20 16 +4 17 21 -4 65-74 Years 14 8 +6 9 11 -2 75 Or Older 8 6 +2 7 7 ± 0


58

General SummaryTier Three Detail

59

Commitment SegmentationTier Three


39

36

28

27

32

27

27

25

22

26

3

6

7

2

6

6

39

43

41

11

33

43

43

13

11

21

23

24

55

34

25

25

60

5

24Hawaii

British Columbia

Colorado

Florida

Yukon

Arizona

California


Saskatchewan

% Uncommitted% Committed


Strength Of Commitment To The Destinations VisitedTier Three

Note: Only brands with >29 users are shown

65 35

39 61

35 65

34 66

34 66

33 67

32 68

32 68

27 73

As in Tier One, relative to other destinations, Ontario appears to have some difficulty establishing a strong sense of commitment among recent visitors. Indeed, a large proportion of its visitors are imminently convertible to competitivedestinations. In this sense, Ontario stands in contrast to more “exotic” locations for Tier Three residents, such as BC,Colorado, PEI, Florida and certainly Hawaii, but performs similarly to New York State and Manitoba. It could be arguedfrom this that travel to Ontario as experienced by these visitors fails to stand out or impress.


23

25

21

18

21

17

20

17

18

3

4

5

3

2

25

36

37

30

34

44

42

31

37

49

40

40

49

45

36

39

50

1

37Quebec

Alberta

Nova Scotia

New York State


Ontario


New Brunswick

Manitoba

% Uncommitted% Committed


Strength Of Commitment To The Destinations Visited (contd.)

Tier Three

Note: Only brands with >29 users are shown

26 74

25 75

24 76

23 77

21 79

21 79

20 80

19 81

19 81


35

27

14

11

7

5

5

2

3

18

8

7

3

4

3

2

5

1

19

17

35

19

33

34

24

54

21

43

39

47

48

48

48

32

46

5

5

20

8

10

20

6

29

26 2Florida

New York State

California

Ontario

Arizona

Colorado

Quebec

Hawaii

Nova Scotia

Attraction Index

Potential Index

Commitment Index

Conversion ModelTM Brand Health ChartSummary Of The Overall Positions Of Destinations In Tier Three

Read: For Ontario: 3% of the market is Committed, 11% is Uncommitted, 19% is Open & 47% is Aware Unavailable. 20% of the market has not considered Ontario. Commitment is 32 points below the market average, Potential is 19 points below the market average, and Attraction is 12 points below the market average.



n = 8,329

111 46 125

75 51 87

104 92 142

68 81 88

106 106 122

112 112 126

84 106 99

212 124 189

79 116 95

When placed in the context of the Tier Three in its entirety, Ontario is seen to have had some success at penetrating the market, although it is one of the weakest performers in terms of establishing a sense of commitment among those attracted. Growth potential is below average and the capacity to interest non-visitorssomewhat limited. Nonetheless, the Province has more to gain than to lose in this Tier, and exhibits morepossibilities for growth than significant competitors such as Florida and New York State.


2

1

1

1

1

1

1 22

14

21

13

11

15

11

15

16

44

44

47

46

46

47

50

48

39

33

39

42

39

42

34

36

45 31British Columbia

New Brunswick


Alberta

Manitoba


Saskatchewan


Yukon

Conversion ModelTM Brand Health Chart (contd.)Summary Of The Overall Positions Of Destinations In Tier Three

Read: For British Columbia: 1% of the market is Committed, 2% is Uncommitted, 22% is Open & 45% is Aware Unavailable. 31% of the market has not considered British Columbia. Commitment is 28 points above the market average, Potential is 20 points above the market average, and Attraction is 1 point below the market average.


% Visitors % Non-VisitorsAttraction

IndexPotential

IndexCommitment

Index

n = 8,329

128 120 99

63 118 74

103 124 96

83 122 66

60 123 57

65 125 73

86 125 55

68 126 71

111 128 75


Pote

ntia

l

Commitment

Conversion Model™ Brand Health Bubble MapTier Three

Note: Bubble size represents penetrationNote: Only brands with >29 users are shown

Nova ScotiaNew Brunswick


Quebec

Ontario

Manitoba

Saskatchewan

AlbertaBritish Columbia

YukonNorthwest Territories

New York State

Colorado

Florida

California

Hawaii

ArizonaAverage

0

20

40

60

80

100

120

140

160

180

200

0 50 100 150 200 250


Delivery Problems?Good potential, but low Commitment amongst visitors. Do these destinations fail to deliver once visited?

Good PositionHigh Commitment and good potential

for further growth

Poor PositionLow Commitment and potential

Strong PositionLeading destinations with high Commitment

Although Ontario is poorly placed in the market, there are opportunities to work with the potential it exhibits to increase market share. There is a possible delivery issue, however. Care should be taken to ensure visitors select and are delivered experiences that meet or exceed expectations. This might involve developing innovative packaging or “new” product .


Brand SignaturesTier Three

New York State

Commitment

Potential

Attraction

Penetration

Note: The numbers represent the deviation of the relevant index from 100. Refer to the appendix for further explanation of the indices.

Ontario

-13

-49

-25

266

-12

-19

-32

53

Florida

25

-54

11

456

Commitment: How Committed are the country’s visitors relative to the competition?

Potential: What is the country’s potential for growth (ratio of Uncommitted visitors to Open non-visitors) compared with the competition?

Attraction: How Open are non-visitors to visiting the destination relative to the competition?

Penetration: What is the destination’s market penetration relative to the competition?

Based on its comparative performance on the three indices, Ontario offers some capacity to mature and grow in Tier Three. Market penetration in line with that achieved by New York State is within the realm of possibility.

66

Traffic and Switching PatternsTier Three


0.50.82.01.03.5

2.00.5

3.90.20.70.10.10.40.20.20.30.2

0.10.20.10.50.2

0.40.10.1

0.10.1

0.2

0.1

0.5

0.2

0.10.1

0.41.2

7.10.2

0.3

3.41.6

1.20.4

7.7

0.40.30.50.31.00.30.20.70.10.1

0.10.1

7.7

1.82.3

5.54.94.63.8

3.94.0

3.63.2

2.62.52.4

2.3

1.7

3.4


Traffic And Switching Pattern For Ontario Tier Three

Percentages are based off the total marketUncommitted Ontario users;Open non-users of competitor;Competitor more favorable

Using both;Uncommitted to Ontario, Committed to competitor;Prefer competitor

Using both and Uncommitted to both Ontario and competitor;Could go either way

Committed to Ontario, Uncommitted to competitor; Prefer Ontario

Uncommitted to competitor,non-users Open to Ontario; Prefer Ontario

n = 8,329

^Weighted base

HawaiiColoradoCaliforniaArizonaFloridaQuebecBritish ColumbiaNew York StatePrince Edward IslandNova ScotiaYukonNorthwest TerritoriesNew BrunswickAlbertaNewfoundland and LabradorManitobaSaskatchewan

HawaiiColoradoCaliforniaArizonaFloridaQuebecBritish ColumbiaNew York StatePrince Edward IslandNova ScotiaYukonNorthwest TerritoriesNew BrunswickAlbertaNewfoundland and LabradorManitobaSaskatchewan

Many competitors could potentially capitalize on Ontario.s vulnerability, but losses are likely to be limited by infrequent selection of distant (and expensive) destinations such as Hawaii or the US Southwest. On the other hand, Ontarioexhibits very real potential to grow at the expense of market share leaders such as Florida and New York State.

68

Travel Drivers and Choices in Tier Three

Understanding what motivates those committed to Ontario and those open to choosing it


Travel Drivers and Choices in Tier ThreeSummary

Ontario’s primary market development goals pertaining to Tier Three should emphasize stimulating interest and driving traffic among those identified as Open Non-visitors. This represents a pool of approximately 5.5 million travellers who have not been to Ontario in the past two years but exhibit a psychological pre-disposition to seriously considering the Province for future travel. The following analysis correspondingly focuses on this group.

Open Non-visitors resident in Tier Three exhibit pleasure travel motivations and priorities that are closely aligned to those of other commitment segments and to the market as a whole. In this sense, then, they would be driven by messages that address needs pervasive throughout the marketplace, in all Tiers. This is encouraging in that there is apparently no need for Ontario to alter the nature of its appeal to consumers in any fundamental way either by Tier or by level of commitment. However, it is also clear that these Open Non-visitors need to be approached quite differently than, for instance, Uncommitted Visitors in Tier One. In the former case, there is a need to raise Ontario’s awareness profile relative to other destinations and convey the basic positioning or offer before communicating specific product, destination and packaging options. They need first of all to be further enticed by the basic idea of Ontario as a travel destination.

With regard to destination assessment and recent destination choices, Open Non-visitors stand out as having relatively strong interest in Quebec, but below-average visitation to that province in the recent past. This suggests that Quebec may be positioned to compete quite strongly with Ontario for these potential visitors. The same may hold true for other Canadian destinations such as the Maritime Provinces and BC, both of which tend to be of greater interest to Open Non-visitors than to recent Ontario visitors.

Generally speaking, though, Ontario is well positioned to grow within the Open segment. Overall assessment of Ontario’s appeal as a tourism destination is strong – second only to Hawaii, on par with California and better than that of all other destinations evaluated.


Differentiating Motivations: Vacation Benefits Sought Tier Three

Percent Of …Stating HIGHLY

IMPORTANT Percent Of …Stating HIGHLY

IMPORTANT

Vacation Benefits

Com-mitted

Visitors

Uncom-mitted

Visitors Dif-

ference Total

Visitors

Open Non-

Visitors Dif-

ference Relax and relieve stress 71 66 +5 67 68 -1 Get a break from day-to-day environment 66 67 -1 67 72 -5 See or do something different 59 55 +4 55 51 +4 Create lasting Memories 58 57 +1 57 52 +5 Enrich relationship with spouse/ children 58 50 +8 52 49 +3 Enjoy life with no fixed schedule 52 44 +8 46 48 -2 Keep family ties alive 48 38 +10 40 35 +5 Gain knowledge 42 28 +14 31 27 +4 Enrich your perspective on life 35 29 +6 30 27 +3 Stimulate your mind 32 25 +7 26 23 +3 Renew connections with people 28 18 +10 20 18 +2 To be pampered 20 13 +7 14 15 -1 To be physically challenged 20 12 +8 13 11 +2 Have stories to share back home 18 12 +6 13 11 +2 Solitude and isolation 15 13 +2 13 10 +3

Bases: Committed Visitors n=234, Uncommitted Visitors n=1000, Total Visitors n=1243, Open Non-Visitors n=1536 Sig. diff. at 95% confidence


Differentiating Motivations: Importance of Destination Characteristics — Tier Three




Com-mitted

Visitors

Uncom-mitted

Visitors

Dif-fer-

ence Total

Visitors

Open Non-

Visitors

Dif-fer-

ence Feeling safe 67 69 -2 69 69 ±0 Lots for adults to see and do 53 48 +5 49 47 +2 Convenient access by car 50 44 +6 45 38 +7 No health concerns 43 38 +5 39 41 -2 Direct access by air 36 30 +6 31 33 -2 Low cost package deals 31 28 +3 29 25 +4 Information about destination online 27 29 -2 29 28 +1 Familiar with the culture and language 23 17 +6 18 14 +4 Great shopping opportunities 18 15 +3 16 13 +3 Lots for children to see and do 18 13 +5 14 13 +1 Convenient access by train/bus 17 10 +7 11 10 +1 Have friends or relatives there 13 8 +5 10 8 +2 Very different culturally from home 12 11 +1 11 11 ±0 Disabled person friendly 11 7 +4 7 7 ±0



Differentiating Motivations: Importance of Accommodation Choice at Destination — Tier Three




Com-mitted

Visitors

Uncom-mitted

Visitors

Dif-fer-

ence Total

Visitors

Open Non-

Visitors

Dif-fer-

ence

Availability of mid-range accommodation 36 34 +2 34 39 -5

Availability of budget accommodation 30 25 +5 27 22 +5

Availability of luxury accommodation 10 10 ±0 10 9 +1

Availability of camping 7 8 -1 8 6 +2

Bases: Committed Visitors n=234, Uncommitted Visitors n=1000, Total Visitors n=1243, Open Non-Visitors n=1536



Destination ChoicesTier Three


Destinations Visited In Past 2 Years

Com-mitted

Visitors

Uncom-mitted

Visitors Dif-

ference Total

Visitors

Open Non-

Visitors Dif-

ference US, outside your own state 98 97 +1 97 99 -2 US, within your own state 76 79 -3 79 72 +7

Quebec 22 24 -2 23 10 +13 British Columbia 11 8 +3 8 6 +2 Nova Scotia 8 7 +1 7 5 +2 Alberta 6 4 +2 4 2 +2 Saskatchewan 5 2 ±3 3 1 +2 Prince Edward Islands 4 3 +1 3 3 ±0 New Brunswick 4 4 ±0 4 3 +1 Manitoba 4 4 ±0 4 1 +3 Newfoundland & Labrador 3 2 +1 3 1 +2 Yukon 2 2 ±0 2 1 +1 Northwest Territories 1 1 ±0 1 2 -1 Nunavut – – – - – – The Caribbean 24 25 -1 25 21 +4 Europe (incl. UK & Russia) 24 22 +2 22 17 +5 Mexico 12 19 -7 18 14 +4 South/Central America 6 7 -1 7 5 +2 Asia 5 6 -1 5 4 +1 Australia/New Zealand 3 2 +1 2 1 +1 Africa 2 2 ±0 2 1 +1 Other destinations 6 4 +2 5 4 +1



Assessment of Potential Destinations for Overall Appeal — Tier Three

Percent Of … Giving High

Rating (8,9 or 10) Percent Of … Giving High

Rating (8,9 or 10)

Specific Destinations:

Com-mitted

Visitors

Uncom-mitted

Visitors Dif-

ference Total

Visitors

Open Non-

Visitors Dif-

ference Ontario 100 53 +47 63 60 +3 Hawaii 66 70 -4 69 72 -3 Quebec 58 40 +18 44 53 -9 California 57 55 +2 55 57 -2 New York State 56 49 +7 50 38 +12 Florida 56 55 +1 55 44 +11 British Columbia 47 34 +13 37 45 -8 Colorado 46 47 -1 47 46 +1 Arizona 42 41 +1 41 44 -3 Nova Scotia 42 28 +14 31 39 -8 Prince Edward Island 40 28 +12 30 37 -7 New Brunswick 28 18 +10 20 24 -4 Alberta 28 18 +10 20 23 -3 Yukon 28 21 +7 22 24 -2 Newfoundland & Labrador 26 18 +8 20 23 -3 Manitoba 26 12 +14 15 16 -1 Northwest Territories 25 22 +3 23 23 ±0 Saskatchewan 23 12 +11 14 15 -1

Sig. diff. at 95% confidenceBases: Committed Visitors n=234, Uncommitted Visitors n=1000, Total Visitors n=1243, Open Non-Visitors n=1536

75

Travel Activities and Interests Tier Three


Travel Activities and Interests in Tier ThreeSummaryAs observed in Tier One, travellers from all segments of Tier Three cite a range of activities and interests that not only dictate choice of overnight destination, but also the decision to travel at all. Virtually all categories of activity or attraction achieve a fair degree of prominence in this regard, including both land and water-based outdoor activities, exhibits and historical attractions, theme parks, the performing arts, festivals and spectator sports. Activity categories that are more commonly considered secondary to the travel decision rather than the main impetus for a trip also achieve some profile in this regard, particularly shopping and dining. Given that most travellers identify a range of activities or interests that have structured their travel choices over the past two years, it seems reasonable to assume that destinations capable of credibly addressing a multiplicity of these interests have the best chance of attracting initial and repeat visitation. When viewed from this perspective, Ontario’s product breadth and concomitant capacity to offer a diversity of experiences would seem to offer marketing leverage.

When examining the motivational power of specific activities, there are indications that the appeal of Ontario is more closely aligned with natural “wonders” (Niagara Falls) and the natural environment than with man-made entertainment pursuits (amusement parks, casinos) or “sun and sand”. This is not to say that these latter activities do not play some part in defining Ontario’s allure - there is just little evidence that these elements of the offer provide a competitive edge among Tier Three residents. On the other hand, Ontario’s urban environment and related aspects of civic life (shopping,dining) show evidence of helping encourage commitment to return. The same might be said of icons of the province’s unique historical legacy, at least among those who have some knowledge of it.

An inability to sustain commitment among recent visitors is possibly a function, in part, of either the perception or the reality of product deficiencies on dimensions that have not been marketing focal points in the US (contemporary music events, viewing flora). There is also some indication that the Province’s summer swimming opportunities and other water-based offerings could be more effectively marketed in Tier Three as a means of retaining interest in repeat visitation.

When attention is turned to the primary task of attracting Open Non-visitors from this tier, there is some indication that the challenge is made more difficult by a tendency for these individuals to be less inclined to travel expressly to engage in a wide range of activities or indulge specific interests. This implies that they may be somewhat more difficult to motivate through the promotion of product than are those who have, in fact, visited Ontario recently. Having said this,


Travel Activities and Interests in Tier ThreeSummary

a comparison of the travel motivations articulated by Open non-visitors relative to those currently Unavailable to the Province tells us that continued promotion of some key components of the Ontario tourism product has the potential to meet with success. Essentially this means retaining the essence of the current positioning, particularly as it relates to culture, nature and the outdoors. Interest in these elements would seem to have played a key role in stimulating consideration of Ontario among Open Non-visitors. The same can be said, to some degree, of Ontario’s distinctive urban milieu and sophisticated “big city” experience (collectively, architecture and urban form, art galleries, shopping, museums, cafes, theatre, etc.) In this sense, there is no need to re-invent and re-position Ontario for this segment of the market. It would seem necessary only to promote the existing brand and product more vigorously and consistently.


Activities Prompting Travel In Past 2 Years(Main Reason For Going) — Tier Three

Ontario Visitors Non-Visitors

Committed (242)

%

Un-committed

(994) %

Open (1,518)

%

Un-Available

(5,575) %

Activity Categories:

Exhibits/Historic 38 34 26 20

Land-based Outdoor 37 36 30 24

Water-based Outdoor 33 38 29 32

Festivals & Events 30 22 20 15

Theme Parks 28 29 25 29

Shopping/Dining 26 21 16 14

Performing Arts 25 23 18 16

Spectator Sports 17 21 15 15

Winter Outdoor 13 16 12 10


Activities Prompting Travel In Past 2 Years(Main Reason For Going) — Tier Three (cont’d)


Committed (242)

%

Un-committed

(994) %

Open (1,518)

%

Un-Available

(5,575) %

Specific Activities:

Well-Known Natural Wonders 23 18 11 7 Amusement Park 22 21 19 24 Nature Park (Natl/State/Prov) 19 15 13 9 Strolling Around City To Observe 17 12 10 8 Casinos 17 19 16 15 Swimming 15 15 13 14 Shopping 15 11 9 8 Well-Known Historic Sites 15 12 12 9 Dining 15 11 8 8 Fishing 13 15 4 5 Lesser-Known Historic Sites 13 9 9 6 Museums 13 12 7 7 Sunbathing 12 19 18 20 Professional Sports 10 3 11 8


Activities Prompting Travel In Past 2 Years(Main Reason For Going) — Tier Three (cont’d)


Committed (242)

%

Un-committed

(994) %

Open (1,518)

%

Un-Available

(5,575) %

Accommodation-Related:

Lakeside/Riverside Resort 12 8 5 5

Campground 11 10 8 8

Seaside Resort 10 11 9 10


Travel Activities Differentiating* Committed From Uncommitted Ontario Visitors — Tier Three

Percent Of…. Com


Main Reasons For Travel (2 Years):

Festivals & Events (Net) 30 22

Strolling To Observe City 17 12

Dining At Restaurants Offering Local Cuisine 13 8

Lakeside/Riverside Resorts 12 8

Local Outdoor Cafes 7 4

Shopping – Book & Music Stores 8 4

Historical Replicas Of Cities/Towns 2 7

Rock & Roll/Pop Concert 2 8

Sunbathing 12 19

+8

+5

+5

+4

+4

-5

-4

-7

+3

Difference

– +



Travel Activities Differentiating* Committed From Uncommitted Ontario Visitors — Tier Three (cont’d)

Percent Of…. Com


Any Travel Activity (2 Years):

Professional Hockey Games 10 5

International Film Festivals 6 3

Paleontology/Archaeology Sites 12 8

Jazz Concerts 4 9

Visits To Spas 7 12

Mini Golf 17 22

Country Music Concerts 7 13

Music Festivals 9 15

Viewing Flora 10 17

Swimming 40 49

Water-based Outdoor (Net) 55 67

+5

+3

+4

-5

-5

-6

-6

-7

-9

-12

-5

Difference

– +



Travel Activities Differentiating* Visitors To Ontario From Open Non-Visitors — Tier Three

Percent Of…. Total

Visitors Open Non-

Visitors

Main Reasons For Travel (2 Years): Fishing 15 4 Exhibits/Historic (Net) 34 26 Well-Known Natural Wonders 19 11 Performing Arts (Net) 23 18 Spectator Sports (Net) 20 15 Museums 12 7 Theme Parks (Net) 29 25 Lakeside/Riverside Resort 9 5 Dining 12 8 Festivals and Events (Net) 23 20 Winter Outdoor (Net) 15 12 Wilderness Activities 5 2 Shopping 12 9 Exhibitions & Fairs 3 6

+11+8+8

+5+5

+4+4+4

+3+3+3+3

-3

+5


Difference

– +


Travel Activities Differentiating* Visitors To Ontario From Open Non-Visitors — Tier Three (cont’d)

Percent Of…. Total

Visitors Open Non-

Visitors

Any Travel / Activity (2 Years): Wine Tours/Tasting 33 24 Brewery Tour/Tasting 20 12 IMAX Movie Theatre 23 15 Campground 26 19 Visit Food Processing Plant 13 6 Hands On Learning 19 12 Casino 48 42 Country Music Concerts 12 6 Viewing Northern Lights 8 3 Farmers Market/Country Fair 32 27 Water Theme Park 20 15 Live Dinner Theatre 15 10 Fireworks 26 21 Zoos 31 26 Aboriginal Heritage 13 8

+9+8+8

+7+7

+6+6

+5+5+5+5+5+5+5

+7


Difference

– +


Travel Activities Differentiating* Open From Unavailable Non-Visitors — Tier Three

Percent Of….

Open Unav-ailable

Main Travel Activity (2 Years):

Total Cultural Activities (Net) 42 34

Nature Park (Natl/State/Prov) 13 9

Well-Known Natural Wonders 11 6

Wildlife Viewing 7 4

Hiking 8 5

Water Theme Park 5 7

Water-based Outdoor (Net) 29 32

Amusement Park 19 24

+8

+4

+5

+3

-2

-3

-5

+3

Difference

– +



Percent Of…. Com


Any Travel Activity (2 Years): Strolling Around To Observe City 51 37

Well-Known Historic Sites 46 32

Lesser-Known Historic Sites 39 28

Art Galleries 26 16

Shop Or Browse Local Arts 47 39

Museum 39 31

Local Outdoor Café 43 35

Live Theatre 23 17

Exhibitions/Fairs 18 12

Botanical Gardens 19 14

Swimming 46 49

Movie Theme Park 10 14

Sunbathing 38 42

+14+14

+11

+8+8+8

+6+6

+5-3

-4-4

+10

Travel Activities Differentiating* Open From Unavailable Non-Visitors — Tier Three (cont’d)

Difference

– +


87

Volume Potential of The Segments Tier Three

Frequency and type of travel


Frequency of Pleasure TravelTier Three

Percent Of … Percent Of … Number of Overnight Pleasure Trips Taken

In Past 2 Years

Com-mitted

Visitors

Uncom-mitted

Visitors Dif-

ference Total

Visitors

Open Non-

Visitors Dif-

ference

One 3 5 -2 4 5 -1

Two 13 10 +3 11 13 -2

Three 13 9 +4 10 11 -1

Four 14 12 +2 12 13 -1

Five of More 58 64 -6 63 57 +6



Travel propensity, frequency and purpose do not appear to have a strong bearing on commitment to Ontario as a travel destination in Tier Three. Open Non-visitors travel with roughly the same frequency as do other travellers inthis region, including those who are Committed to Ontario. As well, they are engaged with business travel to the same degree and in the same ways (see following page). One could argue, then, that the Open group offers as muchpotential to drive traffic to Ontario when compared with those that the Province has attracted from this Tier over the past two years.


Incidence of Business TravelTier Three

Percent Of … Percent Of … Types of Overnight Pleasure

Trips Taken In Past 2 Years

Com-mitted

Visitors

Uncom-mitted

Visitors Dif-

ference Total

Visitors

Open Non-

Visitors Dif-

ference

Any Business Trip 40 47 -7 45 43 +2

Business Meetings 19 23 -4 22 22 ±0

Trade Shows 5 10 -5 9 7 +2

Business Conventions 12 11 +1 11 9 +2

Conferences or Seminars 15 21 -6 20 18 +2

Employer-paid Training 11 12 -1 12 10 +2

Some Other Bus. Trip 11 13 -2 13 11 +2


90

Commitment Segment Profiles Tier Three


Commitment Segment Profiles in Tier Three Summary

In terms of demographic and life stage profiles, Open Non-visitors have much in common with other travellers and differ little from past visitors to Ontario in these respects. On the surface, this would seem to suggest that the life stage targeting strategy currently in place has as much relevance to this segment of the market as it does elsewhere. However, it also means that demographic media targeting will not be especially useful with respect to isolating Open Non-visitors for special attention.


Socio-Economic Profile: EducationTier Three


Highest Education Level Achieved

Com-mitted

Visitors

Uncom-mitted

Visitors Dif-

ference Total

Visitors

Open Non-

Visitors Dif-

ference

High School or Less 14 15 -1 15 11 +4

Some Post Secondary Other Than University/ College 7 6 +1 7 8 -1

Diploma or Certificate From Post-Secondary School 10 9 +1 9 7 +2

Some College or University 18 18 ±0 18 15 +3

Undergraduate Degree 22 25 -3 24 28 -4

Doctorate, Masters or Degree In Medicine 24 20 +4 21 25 -4



Socio-Economic Profile: IncomeTier Three


Household Income

Com-mitted

Visitors

Uncom-mitted

Visitors Dif-

ference Total

Visitors

Open Non-

Visitors Dif-

ference

Under $20,000 6 4 +2 4 4 ±0

$20,000 - $39,999 9 9 ±0 9 10 -1

$40,000 - $59,999 14 16 -2 15 12 +3

$60,000 - $79,999 14 17 -3 16 16 ±0

$80,000 - $99,999 12 14 -2 13 12 +1

$100,000 - $149,999 26 19 +7 20 21 -1

$150,000 or More 13 14 -1 14 13 +1



Household Composition ProfileTier Three


Household Composition

Com-mitted

Visitors

Uncom-mitted

Visitors Dif-

ference Total

Visitors

Open Non-

Visitors Dif-

ference

With Your Spouse/ Partner 76 68 +8 70 70 ±0 With Children 17 Or Under 24 25 -1 24 25 -1 With Children 18 Or Over 14 18 -4 17 18 -1 Living Alone 11 12 -1 12 12 ±0 With Your Mother 9 11 -2 11 9 +2 With Your Father 8 9 -1 8 8 ±0 With Your Siblings 7 8 -1 8 7 +1 With Room Mates 1 4 -3 3 5 -2 With Your Grandchildren 2 2 ±0 2 2 ±0



Life Stage ProfileTier Three


Lifestage Segment

Com-mitted

Visitors

Uncom-mitted

Visitors Dif-

ference Total

Visitors

Open Non-

Visitors Dif-

ference Young Singles 3 4 -1 4 3 -1 Middle Singles 6 5 +1 5 7 -2 Older Singles 3 5 -2 4 3 +1 Young Couple 11 11 ±0 11 12 -1 Working Older Couple 11 15 -4 15 15 ±0 Retired Older Couple 15 9 +6 10 9 +1 Young Parent 10 9 +1 9 9 ±0 Middle Parent 10 11 -1 11 9 +2 Older Parent 29 28 +1 28 29 -1 Room Mates 2 3 -1 3 4 -1

Significant difference at 95% level of confidenceBases: Committed Visitors n=234, Uncommitted Visitors n=1000, Total Visitors n=1243, Open Non-Visitors n=1536


Age and Gender ProfileTier Three

Travel Percent Of … Percent Of …

Gender and Age

Com-mitted

Visitors

Uncom-mitted

Visitors Dif-

ference Total

Visitors

Open Non-

Visitors Dif-

ference Gender: Male 54 55 -1 55 47 +8 Female 46 45 +1 45 53 -8 Age: 18-24 Years 6 9 -3 8 9 -1 25-34 Years 17 20 -3 20 18 +2 35-44 Years 17 16 +1 16 17 -1 45-54 Years 17 21 -4 20 23 -3 55-64 Years 23 18 +5 19 19 ±0 65-74 Years 9 11 -2 10 10 ±0 75 Or Older 12 5 +7 7 5 +2


97

Appendix

98

Conversion Model Background

99

More Detailed Information On The Conversion Model


The Four Dimensions of Commitment

needs fit

involvementin the

category

attitudeto

alternatives

ambivalence

how do people rate their experience?

how important is choice in the market -in relative terms…how much does it matter?

how do all the alternatives compare -how does each one rate?

how much are people torn between the appeal of different choices - are theremany, or few reasons to choose another?


Understanding CommitmentThe Virtues of High Commitment

Will go out of their way to find their brandAre willing to pay more for their brandTend to ignore discount offers of competitors’ brandsHave a lower likelihood of defecting than other customersTend to give most of their business to the brand to which they are committedNeed less persuading to buy again or to devote still more of their business to the brandAre more likely to be enthusiastic about their own brand’s advertisingAre more likely than others to respond negatively to competitors’ advertisingTend to be low volume consumers of competitor advertising messages

Committed customers…


Understanding CommitmentThe Virtues of High Commitment

Can charge relatively more for services or for the brandShould find that market factors e.g. branch network, distribution; matter less to salesWill find that their customers are relatively immune to competitive activityCan justifiably spend more on emotionally oriented brand-building marketing

Brands with more committed customers …

Will lose sales to competitive activity, particularly discountingWill find that market factors (e.g. convenience, distribution) are crucial to salesCannot justify significant above-the-line advertising unless part of a relaunch

Brands with fewer committed customers …


What is the Conversion ModelTM?

USERS NON-USERS

CommittedUsers

UncommittedUsers

OpenNon-Users

UnavailableNon-Users

Entrenched Average Shallow Available Ambivalent StronglyConvertible

The eight segments can be further grouped into four primary segments…

The Conversion ModelTM segments people into one of eight segments according to the strength of their relationship with the various brands…

WeaklyUnavailable


The Segments Tell Us How People Feel About Their Brands …

Entrenched:

Strongly committed to the brand and are unlikely to switch brands in the long term

Average:

Committed to the brand but not as much and are unlikely to switch in the short term

Shallow:Uncommitted to the brand and could switch. Some are already looking at alternatives

Convertible:Uncommitted to the brand and are most likely to defect to another brand

Available:Non-users of the brand who are most likely to be acquired in the short term

Ambivalent:Non-users who are as attracted to the brand as they are to their current brands

Weakly unavailable:Non-users who are not available to the brand, but may be available later on

Strongly unavailable:Non-users who are not available to the brand, they strongly prefer their current brand

CommittedUsers

UncommittedUsers

OpenNon-Users

UnavailableNon-Users


1017 13

20 15 133 6 3

Entrenched Average Shallow Convertible Available Ambivalent Weaklyunavailable

StronglyUnavailable

Unaware

OPEN:How many are available to you?Who are they?What is attracting them to you?What is preventing them from switching to you?From which competitor/alternative will it be easiest to win new customers/advocates?

Customers 60% Non-Customers 40%

Conversion Model output: developing acquisition (opportunity)


Commitment within your CategorySample of commitment across the category (all brands included)

Deliverables

5138

92

entrenched average shallow

strongly committed to the brand, unlikely

to convert to another

committed, but not as strongly, some

could convert in the medium term

uncommitted, should be considered at

risk

highly uncommitted with a significant

likelihood of conversion

% of users

Commitment is very high in this example with half of the market entrenched to the brand used most

convertible


% Committed % Uncommitted

21

18

25

36

10

16

39

38

34

36

27

19

34

30

10

7Brand A

Brand B

Brand C

Brand D


We begin by comparing commitment of customers across all brands; which brands have the deepest form of commitment (the entrenched) as well as which ones are the most at risk

Competitive Comparisons of Commitment Customer commitment across brands


5

12

18

19

2

6

31

54

7

2

6

4

41

45

30

16

43

35

13

6

% Users % Non-Users

Committed Uncommitted Open Aware Unavailable

Unaware Unavailable

Brand A

Brand B

Brand C

Brand D

An Overall Market View for Each Brand

Customer Commitment and Non-customer Availability to all brands

We show which brands have high commitment and attraction (high growth potential) versus those positioned for declineWe also highlight which brands have awareness problems


Open non-usersAware non-users

Attraction Ratio

=

No. of committed usersTotal users

Commitment Ratio

=

A Quadrant Map for Brand Potential for Growth

Market summary of brand/product/alternatives potential for growth

Ratios of commitment and attraction to each brand result in relative potential for growth and degree of competitiveness with other brands as described by each quadrant

0.0

0.1

0.2

0.0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1.0

Commitment

Attr

actio

n

Average

AB

C

D

• good image and attractive to non-users• don’t deliver when actually used

• users are happy• non-users want to try

• may be barriers to entry• attraction may be aspirational

• users are happy• non-users are not attracted to it

• may be niche companies• may have reached market saturation

• may be an image problem

• users are unhappy• non-users are not interested • may be a product or an image problem


riskratio

0.020.100.02

% market share at risk of defection

2.4.2

3.9

% market share open to using the client brand

.91.7

1.1

• 3.9% of the market has the potential to switch to brand D

• 10% of C’s customer base may defect to the client brand

• The 10% represents 1.7% of the market potentially switching from C to the client brand• 66% of uncommitted

users already use D

Committed Uncommitted Open Unavailable

36 43

318

client brand market disposition

customers non-customers

brands

BCD

dualusage

50.319.866.0

Understanding How to Defend and GrowSwitching analysis - the “traffic patterns” across all brands

Each brand is evaluated for potential market share loss or gain; which brands will take share - which ones will loseIn this way, strengths and weaknesses of each brand can be considered in strategic initiatives for defense or attack

111

States of Mind


What is States of Mind™? Advanced Commitment Analysis

Purpose: an additional dimension of the Conversion Model™ which advances our understanding of Commitment and what drives brand choice.

Five patterns or “States of Mind™”– Committed and Single-Minded– Committed but Passive– Shared (Committed or Uncommitted)– Uncommitted Seekers– Uncommitted and Uninvolved


States of Mind among US TravellersWhen it comes to commitment to the individual selected destinations, US travellers (regardless of Tier) are very fluid in their allegiances. Only one-third can be described as single-minded with a strong commitment to a particular destination or region among the 18 assessed . There are large segments of shared uncommitted travellers (35%) and shared committed travellers (9%) who could easily switch among destinations. At 17%, the proportion of seekers who are not satisfied with any of the destinations presented is quite large. Only a few travellers are uninvolved (4%) or passive (1%).

This patterns suggests considerable volatility and potential for destinations to experience significant losses or gains depending on market conditions and the success of promotional efforts.

Seekers: 17%

Single-minded: 33%

Shared Committed:

9%

Passive: 1%Uninvolved:

4%

Shared Uncommitted: 35%

Percent of Past 2-Year Leisure Travellers

States of Mind™Destinations Assessed

Don’t care which they visit – the decision is not important.

Uninvolved

Unhappy with current options.Seekers

Equally attracted to two or more destinations. Either Committed to both, or Uncommitted to both.

Shared

Committed, but less involved.Passive

Strong attachment to one destination. Committed to one, may be Uncommitted to others.

Single-minded

Description

FloridaColoradoHawaiiArizonaNew York StateNova ScotiaNew BrunswickPEINewfoundland and LabradorQuebecOntarioManitobaSaskatchewanAlbertaBritish ColumbiaYukonNorthwest Territories

tams 2006 u.s. loyalty segmentation 2006...1 presented to yprésenté à the ontario tourism...

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