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Lesson 3: Tourism and Consumer Behavior

Objectives:
At the end of the chapter, the students should be able to:

1. identify the factors that influence consumer behavior;

2. discuss the stages of the buyer decision-making process;
3. explain the role of service quality in customer satisfaction;
4. differentiate individual versus organizational buyer behavior; and
5. enumerate the different models of consumer behavior.

Introduction
Consumer behavior is the process and activities people use when searching for,
selecting, purchasing, using, evaluating, and disposing of products and services to
satisfy their needs and desires (Belch and Belch 2008). Purchase decisions, especially
for tourism products, are usually arrived at after a long and detailed process of
information search, brand comparisons, and evaluation. Tourism products are too
expensive to be bought on impulse. Thus, a careful examination of choices is made
before purchasing. We will learn in this chapter that many factors influence consumer
behavior, and purchase is often not just attributed to the price of the product.

FACTORS THAT INFLUENCE CONSUMER BEHAVIOR

Tourism marketing scholars identify key factors that influence consumer behavior as
follows: (1) motivations, (2) culture, (3) age and gender, (4) social class, (5) lifestyle, (6)
life cycle, (7) reference groups, and (8) personality and self-concept.
 Factors Influencing Tourist Consumer Behavior Source: Adapted from Hudson (2008)

Motivations

Motivations are inner drives that make people take a specific plan of action to satisfy
their needs. Hudson (2008) defines needs as the gap between what customers have
and what they would like to have; they are seen as the force that arouses motivation.
Kotler et al. (2010) state that a need becomes a motive when it is aroused to a sufficient
level of intensity that prompts a person to take action.

A person who can understand how motivation works will gain a competitive advantage.
If one can identify what triggers the purchase, he/she can create the scenario to
influence the purchase.

Maslow's hierarchy of needs is the most popular theory of motivation as it can 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, safety, belongingness, esteem/ status, and self-actualization.
Physiological needs refer to the basic needs for survival such as the need for food and
water. Safety refers to the personal and perceived degree of safety and security.
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. Since
needs are prioritized due to limited resources, Maslow ranked them based on their level
of importance. The more resources one has, the higher the likelihood that the higher-
order needs will be met. Travel and tourism, for a great part, belong to the higher-order
needs.
 Hierarchy of Needs (Maslow 1943)

Dann (1977) describes travel motivators as linked with Maslow's hierarchy of needs. He
states that two factors make you want to travel: push and pull factors. The push factors
are those that make 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.

Push and Pull Factors (Dann 1977 and Crompton 1979)

Push Factors Pull Factors

(Socio-Psychological Factors) (Cultural Motives)

Escape from the mundane environment Novelty

Exploration and evaluation of self Education
Relaxation
Prestige
Regression
Enhancement of kinships/relationships
Facilitation of social interaction

Krippendorf (1987) elucidates that travel is motivated by "going away from" rather than
"going toward" something. Also, the traveler's motives and behavior are mostly for self-
gain.
The traveler's motives and behaviors are self-oriented. Krippendorf classifies these
theories into eight explanations of travel which are:
1. recuperation and regeneration;
2. compensation and social integration;
3. escape;
4. communication;
5. freedom and self-determination;
6. self-realization;
7. happiness; and
8. broadening of the mind

Culture
The impact of culture cannot be disregarded in the study of consumer behavior.
Researchers have looked into how culture has affected consumer behavior. Social
scientist Geert Hofstede helps explain how culture impacts the global marketing arena
through his research work. The cultural framework of Hofstede can be used to explain
the differences in consumer behavior across countries and be used as a guide in
increasing efficiency in global marketing. Hofstede discloses the five dimensions of
culture as follows: (1) power distance, (2) individualism/ collectivism, (3) masculinity and
femininity, (4) uncertainty avoidance, and (5) long-term and short-term orientation. A
sixth dimension was recently added, that is, indulgence versus restraint.
Hofstede, on his website (www.geert-hofstede.com), defines culture as the collective
mental programming of the human mind that 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 aspects of life and become crystallized in the
institutions of a society.
Knowing the cultural differences among the countries that the Philippines wants to tap
as a market for tourism will help enable marketers to develop effective products and
services as well as strategies. Hofstede's cultural framework can be used as a guide to
determine different aspects of culture such as power distance, individualism,
masculinity, uncertainty, pragmatism, and indulgence.

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. The likes and
preferences of consumers are normally dependent on their ages. Travel packages are
normally tailor-fit depending on the generation of the target market.
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
the male and female markets.

Social Class
The socioeconomic status of individuals is still considered as one of the most important
external factors influencing consumer behavior (Hudson 2008). Social class is one's
position within society and is determined by factors such as income, wealth, education,
occupation, family prestige, and value of home or neighborhood (Kotler et al. 2010).
Social class has commonly been referred to in the Philippines through letters—A, B, C,
D, E. Sometimes, the market is clustered into Class AB or CDE market or ABC, and DE
markets. It has been observed that those with higher incomes tend to travel more.
Families who have higher incomes are usually better educated; hence, they have higher
income possibilities. Travel products and services are mostly designed for the elite
Class AB market. However, the presence of low-cost carriers, for instance, creates
travel opportunities for the lower-class markets.

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. Lifestyles are by no means universal since they also interact with culture,
economic situation, and personality. Marketers search for relationships between their
products and people's lifestyles. Starbucks became a huge success in the Philippines
because there was a good fit between the product and the Filipino lifestyle—Filipinos
love to talk over a cup of coffee. Notice how coffee shops in the Philippines are
proliferated with comfortable lounge chairs and a cozy ambiance. Despite the
outrageously expensive coffee, their brand images and the Filipinos' communicative
behavior have made these coffee shops tick.

Life Cycle
The Family Life Cycle (FLC) Model (Pearce 1993) suggests that travel patterns and
destinations differ as people move on through the 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. Being married to a four-year-old child shifts our destination choices to places
with theme parks, child-friendly accommodations, and familiar food choices. The
preferences and activities of the other stages of the life cycle may vary, influencing
consumer and purchase behavior.

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. These people can be a member of
your family, a teacher or a classmate in school, a boss or a Colleague in your
workplace, or your priest or pastor in the church. This has also been extended to other
experienced travelers and food experts through their blogs. We do not personally know
them, but they are viewed as highly credible because of their experience and expertise.
Reference groups are extremely important in selling tourism products because the
product is intangible; hence, word of mouth plays an important trigger for purchase
decisions.

Personality and Self-concept

Personality refers to the distinguishing psychological characteristics that lead to
relatively consistent and enduring responses to the environment. This has a great
influence on one's buying behavior. A consumer's self-concept refers to his / her mental
picture (Kotler et al. 2010). Consumers tend to go for product brands that reflect their
personalities. People who are friendly and outgoing would likely be found in restaurants
that project a friendly and outgoing image. Introverted people would likely meet up with
a friend in quaint restaurants, not in bars or clubs.
Personality and self-concept affect an individual's choice of recreational activities while
on tour. It also affects the choice of accommodations and restaurants that people
choose when they travel.
These factors will resurface in the next chapter since they are also variables and factors
that are considered for market segmentation. This proves that personal, cultural, social,
and psychological factors that affect consumer behavior are also factors that marketers
use to group different types of individuals. For effective marketing to happen, a thorough
understanding of one's market is a must.

THE BUYER DECISION-MAKING PROCESS

In Chapter 1, we discussed how tourism products fall under high-involvement products.
In high-involvement products, stages in the buyer decision-making process are more
defined and can easily be identified. Decision-making is made after a thorough
evaluation of alternatives because the products are expensive, complex, and possibly
unrepeatable. Figure 3.4 shows the stages of the buyer decision-making process.
 Figure 3.4 Stages of Buyer Decision-making Process

Need Recognition
Have you ever wondered why the streets of Metro Manila are filled with vendors of all
types—cigarettes, bottled water, candies, etc.? The more traffic there is, the better
business they have. Marketers need to find out what people's needs are, and they
should be there during the times these people need them.
Needs are triggered either by internal or external 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. Another example, again on
your way home, you smelled the aroma of freshly baked bread as you passed by a
bakeshop. It smelled really good, so you decided to enter and buy a piece of bread. The
purchase was triggered by external stimuli.
Promotional strategies are creatively developed to make people think that they need our
products. Successful business owners are those who have thought to satisfy a need
even before consumers have articulated such a need. When coffee shops became
successful in the Philippines, entrepreneurs started asking themselves, what about
those who do not drink coffee? Hence, the birth of the milk tea shop.

Information Search
Once a consumer recognizes a specific need, he/she may or may not be prompted to
search for more information. The eagerness for more information will depend on the
strength of the desire, the information that the person may already have, and the
satisfaction he/she may get from the additional information he/she gains.
Information may be obtained through personal and commercial sources and the
Internet. Personal sources include asking family, friends, and acquaintances about their
knowledge and experience about the products or services you need. Commercial
sources include advertisements, samples, brochures, sales agents, displays, and
signages that you have seen. Personal sources are more likely to be credible than
commercial sources since personal sources may come from reference groups and
people whom you trust. The Internet is a rich source of information; these may come
from the company's website, blogs of previous guests, consumer review sites, etc.
Since tourism products are intangible, it is important to obtain information from people
who have already availed of the products or services. Positive word of mouth plays a
very important role in the information search.
Crotts (2000) classifies information search into two: internal and external information
search. Internal information search is nothing more than retrieving decision-relevant
information stored in an individual's long-term memory. These may be caused by low
involvement stimuli such as exposure to ads or prior experience with the destination
that is not available to first-time visitors. External information search focuses on
acquiring information from outside or external sources. These may come in the
following forms: (1) personal (advice from friends), (2) marketer-dominated (brochures
and ads); (3) neutral (travel clubs and agents), (4) experiential sources, and (5) the
Internet.
Marketers need to know how their clients came to know about their products and
services so that they can prepare a more effective means of communicating with their
target market. Tiyo's Restaurant by Chef and Brewer, which is located in Marikina,
attributes most of its success to the positive word of mouth of its clients. By merely
having a good product and ensuring that customers leave highly satisfied, their
restaurant successfully celebrated its second anniversary without spending much on
advertising.

Evaluation of Alternatives
This stage allows prospective customers to make detailed comparisons of different
products or service providers since they already have sufficient information. Based on
the resources that are available to them at the time of purchase, they are close to
deciding on which product or service to buy. Resources may include time, money, brand
image, availability of flights, and convenience of making the purchase. For example, if
you are planning a trip to Singapore, you will have to compare the airfare costs of
several airlines such as Cebu Pacific, Philippine Airlines (PAL), Air Asia, and Jet Star.
You will also have to consider the schedule of flights because if you want to maximize
your trip, you should leave Manila on an early morning flight and depart Singapore on
an evening flight. As for brand image, all are low-cost carriers except for PAL, so it will
not be a significant factor in your decision-making. Other things to consider would be
the availability of flights on your preferred schedule and the convenience of purchasing
the tickets online.
Purchase Decision
This is the stage most awaited by tourism marketers. This is when consumers make the
purchase decision. At this stage, marketers should facilitate the speed and convenience
by which the products or services reach the consumers. Distribution networks should be
made available and access to the products made easy and fast.
In one staycation my family had within the city, we were craving hotcakes, so we
decided to order delivery from a popular fast-food chain. The one-number delivery
system of most fast-food chains helps make access to their food items easy. However, I
was informed by the agent that since my order was diverted to another branch (because
the nearest branch to us was still closed) it would take one hour for the orders to arrive.
I was surprised at the length of time it would take for the order to be delivered. Hence, I
decided to cancel my order and call another fast-food chain instead. In a matter of
minutes (less than the 30-minute delivery lead time the agent told me), my order arrived
at the door of our 33-floor condominium unit. Since I have decided to buy hotcakes, my
choice of supplier depended on how easily I could get them from my chosen supplier,
Regardless of how good a product is, if it is hard for clients to avail of, they will most
likely switch brands.

Post-purchase Evaluation
Product and service providers need to ensure that customers have a good experience
with the product. This will facilitate positive word of mouth. Customer satisfaction can
have different degrees as follows: extremely satisfied, satisfied, neutral, dissatisfied,
and extremely dissatisfied. Tourists have pre-departure expectations which are
compared to their post-visit experience. To gain positive word of mouth, clients need to
be satisfied at the very least. Actions for revisits and recommendations to friends would
be prompted by extreme satisfaction. Conversely, extremely dissatisfied customers may
pass on negative word of mouth and are the ones most likely to complain. In short,
customer satisfaction has a positive correlation with word of mouth. The more satisfied
customers are, the more likely they are to spread good things about the product or
service. They are also more likely to repeat purchases and recommend the product or
service to their friends (Ziethaml et al. 1996).
Kotler (2000) defines satisfaction as a person's feelings of pleasure or disappointment
resulting from comparing a product's perceived performance to his/her expectations. In
tourism, it is generally known that high-quality service would result in tourist satisfaction,
creating positive word of mouth, and leading to repeat visits (Som and Badarneh 2011).
CUSTOMER SATISFACTION THROUGH SERVICE QUALITY
Marketers can be creative in reducing consumer post-purchase dissatisfaction by
keeping in touch even after the sale has been made and by knowing how to address
customer complaints.
A thank-you letter, a small token/ gift/ souvenir, and a feedback form soliciting
suggestions for improvement can help make customers feel good about their purchase.
Service quality, as defined in businessdictionary.com, is an assessment of how well a
delivered service conforms to the client's expectations. Service business operators often
assess the service quality provided to their customers to improve their service, to
quickly identify problems, and to better assess client satisfaction.

Benefits of Service Quality

Kotler et al. (2010) elucidate some benefits of service quality:
1. Customer Retention. Service quality helps build loyalty among customers and
makes these customers speak positively about the service provider.
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. Costs are minimized if there are repeat customers, the
absence of a price war, and a low turnover rate of employees.
 Figure 3.5 Relationship of Service Quality, Customer Satisfaction, and
Word of Mouth

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 greater demand
for a variety of products and services. Organizations buy in bulk for group consumption,
while consumers usually purchase in retail for personal consumption. Hence, marketers
give importance to understanding the buyer behavior of organizations primarily because
they generate big-time sales and revenues.
Organizational buyers commonly respond to both economic and personal factors (Kotler
et al. 2010). Major influencers of purchase would include the cost and economic
outlook, the organization's objectives and personal agenda, the interpersonal factors at
play between buyers and sellers, and the personal motivations, perceptions, and
preferences.
The purchase decision process in organizations is more complex than that of individual
purchases. Kotler et al. (2010) describe the process as follows:
1. Problem recognition
2. General need specification
3. Product specification
4. Supplier search
5. Proposal solicitation
6. Supplier selection
7. Order routine specification
8. Performance review
Groups are the most lucrative markets. A good mix of groups and individuals in the
customer mix is ideal. Groups give big accounts but the average room rate (ARR) and
the average cost per cover (ACC) are low, while individuals give higher ARR and ACC.
The group market includes meetings, incentive travel, conventions, events, and smerfs
(social, military, educational, religious, and fraternal organizations).

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) levels of activity.
Allocentrics prefer what is new, unstructured, exotic, or unusual in terms of trips or
destination choices. Psychocentrics are those who prefer the structured and familiar.
Later on, it was realized that there exists midcentrism wherein a tourist could portray
characteristics of both allocentrics and psychocentrics depending on the situation or
season. A critique of this model was made by Gilbert (1991) when he stated that tourists
travel with different motivations on different occasions.
These show that travelers have preferences that help group them into segments and,
later on, assist in identifying the products and services suited to the specific demand.

Cohen's Model
Cohen (1972) proposed four classifications of tourists: the organized mass tourist, the
individual mass tourist, the explorer, and the drifter. Organized mass tourist is the type
of tourists who buy 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 sometimes opt for the comfort of
familiar accommodations. The drifter is the free spirit who avoids any kind of traditional
tourist establishments.

Stewart's Model of Holiday Taking

This model was based on a study of United Kingdom holidaymakers conducted by the
Henley Centre by Stewart in 1993. 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. They also tend to be more adventurous and confident as their level of
affluence and travel experience increases. Stewart distinguishes the following four
pluses of holiday taking.
1. Bubble travelers — have low affluence, low travel experience, and observe
foreign cultures from a bubble. This gives them basic confidence to travel.
2. Idealized experience seekers — have more affluence and a base of overseas
travel experience, which gives them more confidence.
3. 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.
4. Total immersers — do not seek to merely observe but to be exposed fully to
another culture's language, food, heritage, and lifestyle.
Other models have proposed different ways of understanding tourist behavior. A careful
understanding of the needs wants, and preferences of our target consumers will help us
create products and services that are relevant to them. Once these products and
services are relevant to them, pleasing the customer would not be a difficult task.

The Non-Users
Successful marketing efforts should cover the different segments of the market. While
relationship marketing, which focuses on customer retention, has become a popular
marketing alternative, marketers should continue to make efforts to acquire new
customers. The best way to do this would be to target the non-users. Non-users can be
classified as (1) ex-users who stopped using the products/services for various reasons,
(2) customers who are aware of the product or service but need to be persuaded to
purchase, and (3) those who are not aware of the product's or service's existence.
Though research shows it is more expensive to acquire new customers, a company
needs to have a steady flow of new customers for it to survive and eventually flourish.
Understanding the consumer's needs and buying process is the foundation of
successful marketing (Hudson 1999). Different types of tourists have different needs.
Understanding that there are different types of tourists can help marketers communicate
with each type more effectively and with greater impact.
Consumer behavior is the process and activities people engage in when searching for,
selecting, purchasing, using, evaluating, and disposing of products and services to
satisfy their needs and desires.