Tourism and Consumer Behavior PDF

Tourism and Consumer Behavior Rudy B. Necor Jr. MBA., TOURISM AND CONSUMER BEHAVIOR Objectives Identify the factors that influence consumer behavior; Discuss the stages of the buyer decision-making process; Explain the role of service quality in consumer satisfaction; Differentiate...

Tourism and Consumer Behavior Rudy B. Necor Jr. MBA., TOURISM AND CONSUMER BEHAVIOR Objectives Identify the factors that influence consumer behavior; Discuss the stages of the buyer decision-making process; Explain the role of service quality in consumer satisfaction; Differentiate individual versus organizational buyer behavior; and Enumerate the different models of consumer behavior. Factors that influence consumer behavior Motivations Motivations are inner drives that make people take a specific plan of action to satisfy their needs. Maslow’s hierarchy of needs (Figure 3.2) is the most popular theory of motivations as it is able to outline the different needs of man and rank them based on the degree of importance in a simple and easy-to-understand manner. These motivations are as follows:  Physiological needs refers to the basic needs for survival such as need for food and water. Safety refers to the personal and perceived degree of safety. Belongingness refers to acceptance in social groups. Esteem/status refers to the desire for prestige and status. Self-actualization refers to the goal of self fulfillment. Figure 3.2 Hierarchy of Needs (Maslow 1943)  Dann (1977) describe travel motivators as linked with Maslow’s hierarchy of needs. He states that there are two factors that make you want to travel: push and pull factors. The push factors are those that you want to travel, while the pull factors are those that affect where you would want to go. Furthermore, Crompton (1979) identifies nine motives which are divided into push and pull factors. The push motives are what he calls the sociopsychological factors, while the pull factors are classified as cultural motives.  Table 3.1 Push and Pull Factors (Dann 1977 and Crompton 1979) Push Factors Pull Factors (Sociopsychological Factors) (Cultural Motives) Escape from mundane environment Novelty Exploration and evaluation of self Education Relaxation Prestige Regression Enhancement of kinships/relationships Facilitation of social interaction Culture Hofstede, in his website (www.geert-Hofstede.com), defines culture as the collective mental programming of the human mind which distinguishes one group of people from another. This kind of programming influences patterns of thinking which are reflected in the meaning people attach to various aspect of life and become crystalized in the in the institutions of society. On the same website, the scores of different countries can be found. Age and Gender Age pertains to the number of years a person has been living. Age is a traditional way of segmenting the market as it greatly influences consumer behavior. Gender also influences consumer behavior. The female market is steadily increasing and has been observed to be more discriminating than its male counterpart. The gay market is also seen by marketers as a market with a set of preferences different from male and female markets. Social class Social class is one’s position within the society and is determined by factors such as income, wealth, education, occupation, family prestige, and value of home or neighborhood (Kotler et al. 2010). Lifestyle A lifestyle is a person’s pattern of living as expressed in one’s activities, interests, and opinions (Kotler et al. 2010). It portrays the whole person interacting with external forces. Life Cycle Life cycle refers to the stages an individual goes through in their lifetime. Single people choose destinations that are fun and adventurous more than those who are married and have young children. Reference Groups Reference groups are known to be a set of people who have a direct or indirect influence on other people’s attitudes or behavior. Personality Personality refers to the distinguishing psychological characteristics that lead to relatively consistent and enduring responses to the environment. The buyer decision-making process Figure 3.4 Stages of Buyer Decision-making Process Need Recognition Needs are triggered either by internal or externa stimuli for example, on your way home, you felt hungry as your stomach grumbled. You saw a restaurant and grabbed a quick bite. This was a need triggered by internal stimuli. Promotional strategies are creatively developed to make people think that they need our product. Information search Once a consumer recognizes a specific need, he/she may or may not be prompted to search for more information. Information may be obtained through personal and commercial sources and the internet. Evaluation of Alternatives this stage allows prospective consumers to make detailed comparisons of different products or service providers since they already have sufficient information. Purchase Decision This is the stage most awaited by tourism marketers, this is when consumer actually make the purchase decision. At this stage, marketers should facilitate the speed and convenience by which the product or services reach the consumers. Post-purchase Evaluation It is extremely important for products and service providers to ensure that customers have good experience with the product. This will facilitate positive word of mouth.  Benefits of Service Quality Kotler et al. (2010) elucidate some benefits of the service quality: 1. Customer retention. Service quality help build loyalty amongst customers and makes these customers speak positively about the service providers. 2. Avoidance of price competition. Providing high-quality service helps in maximizing potential revenue and veers the company away from a price war. 3. Retention of Good Employees. When an operation is well run and produces high-quality products, recruitment, training, and retention of employees are easy. 4. Reduction of Costs. Cost are maximized if there are repeat customers, absence or a price war, and low turnover rate of employees.  Organizational Buyer Behavior The organizational buying process is a more formal version of the consumer buying process discussed earlier in the chapter. Organizations are more complex because more people are involved in the decision-making process, and there is a greater demand for a variety of products and services.  The purchase decision process in organizations is more complex than that of individual purchases. Kotler et al. (2010) describe the process as follows: Problem recognition General need specification Product specification Supplier specification Supplier search Proposal solicitation Supplier selection Order routine specification Performance review  Typology of Tourists Plog’s Tourist Motivation Model Plog’s Tourist Motivation Model (1974) classifies travelers as allocentrics or psychocentrics. Plog adds “energy” as a determinant of (high or low) level of activity. Allocentrics prefer what is new, unstructured, exotic, or unusual in terms of trips or destination choice. Psychocentrics are those who prefer the structured and familiar. Later on, it was realized that there exist midcentrism wherein a tourist could portrat characteristics of both allocentrics and psychocentrics depending on the situation or season. Cohen’s Model Cohen (1972) proposed four classification of tourist: The organized mass tourist is the type of tourist who buys all- inclusive tour packages and ensure that everything goes as planned. The individual mass tourist is more autonomous than the organized mass tourist, preferring to travel independently but still choosing popular destinations and activities. The explorer seeks new areas but would something opt for the comfort of familiar accommodations. The drifters is the free spirit who avoids any kind of traditional tourist establishment. Stewart’s Model of Holiday Taking The model is built on the concept that as people become more affluent, they tend to travel more and that the travel experience is cumulative. Stewart distinguish the following four phases of holiday taking. Bubble travelers - have low affluence, low travel experience, and observe foreign culture from a bubble. This gives them basic confidence to travel. Idealized-experience seekers – have more affluence and a base of overseas travel experience, which gives them more confidence.  Wide-horizon travelers – have more affluence, greater confidence, and more travel experience; they are ready for more individually oriented travel to a wider range of destinations. Total immersers – do not seeks to merely observe but to be exposed fully to another culture’s language, food, heritage, and lifestyle. The Non-Users Non-users can be classified as (1)ex-users who stopped using the product/services for various reason, (2)customers who are aware of the product or services but need to be persuaded to purchase, and (3) those who are not aware of the product’s and service’s existence. Though research shows it is more expensive to acquire new customers, a company needs to have steady flow of new customers for it to survive and eventually flourish. The Marketing Plan Rudy B. Necor Jr. MBA., The Executive Summary The marketing plan starts with an executive summary. It is similar to the abstract of a research paper. The goal of the executive summary is to give a brief summary and logical presentation of the content of the marketing plan. Introduction Current Situation of the Company The marketing plan begins with an introduction to the current situation of the company. Environmental Factors The external environment has an impact on the marketing success of the business. External factors can cause the decline or increase of one’s business. Competitive Analysis Competition plays a big role in the success of a business. How tourism establishment responds to new players in the market and new strategies of existing markets will make an impact on the firms profitability.  Marketing Trends Knowledge of marketing trends will help marketers plan out product development and promotional strategies. Market Potential Business development strategies are created based on the market potential of certain product and services. Marketing Research Findings Some established hotel chain and restaurant employ market research firm to evaluate the external market and identify business opportunities. Objective Objectives are goals that companies want to achieve within a certain period of time. They provide a clear direction for the strategies, tactics, and activities that will be done. Objectives need to have the following qualities Quantitative – expressed in monetary term, units of measurements, time specific and profit margin specific. SMART – Specific, Measurable, Attainable, Realistic, Time- bound Marketing strategies An overarching creative strategy can help put together the marketing strategies. Similar to how the Philippines declare that “It’s More Fun in the Philippines” and come up with products, services, and promotional tactics that revolve around the common theme of “fun” tourism product and services, based on their positioning, image, and branding, can create a marketing slogan that would summarize what the product service is about.  Product Strategy. A discussion on the new products to be launched, innovations, or upgrading of products and services is included in this section Pricing Strategy. A review of pricing objectives, pricing strategies, and possible discounting schemes is covered in this section. Promotional Mix. A presentation of promotional tools to be used to achieve the strategies is the main content of this section. Marketers may propose a variety of advertising options, sales promotional tools, public relations activities, direct mail campaigns, personal selling techniques, and the like to meet the marketing objectives. Distribution Strategy. This section should include the key intermediaries that will be helpful in achieving, the marketing objective. Timetable This section should include specific activities based on the identified marketing strategies, their expected time of roll-out, duration, and person-in-charge. It can be in the form of a Gantt chart which could be as simple as this. Budget The marketing budget is a numerical representation of the marketing commitment. Some companies do not think of marketing as an investment, but rather, as an expense. Companies with this mindset normally allocate very minimal resources to marketing. The budget is a control mechanism that ensures that the marketing efforts yield the target revenue within a specific period of time. Conclusion This is a short reiteration of the salient points of the marketing plan.