Consumer Behaviour in Tourism Industry
Consumer Behavior in Tourism Industry
The theories of consumer decision-making process assume that the consumer’s purchase decision process consists of steps through which the buyer passes in purchasing a product or service. However, this might not be the case. Not every consumer passed through all these stages when making a decision to purchase and in fact, some of the stages can be skipped depending on the type of purchases.
The reasons for the study of consumer’s helps firms and organizations improve their marketing strategies by understanding issues such as:
* The psychology of how consumers think, feel, reason, and select between different alternatives (e.g., brands, products);
* The psychology of how the consumer is influenced by his or her environment (e.g., culture, family, signs, media);
* The behavior of consumers while shopping or making other marketing decisions;
* Limitations in consumer knowledge or information processing abilities influence decisions and marketing outcome;
* How consumers’ motivation and decision strategies differ between products, that differ in their level of importance or interest that they entail for the consumer; and
* How marketers can adapt and improve their marketing campaigns and marketing strategies to more effectively reach the consumer.
The study of consumer behavior focuses on how individuals make decisions to spend their available resources (time, money, effort) on consumption-related items. The field of consumer behaviour covers a lot of ground.
According to Solomon (1996), consumer behavior is a study of the processes involved when individuals or groups select, purchase, use, or dispose of products, services, ideas, or experiences to satisfy needs and desires.
The official definition of consumer behaviour given by Belch (1998) is “the process and activities people engage in when searching for, selecting, purchasing, using, evaluating, and disposing of products and services so as to satisfy their needs and desires”. Behaviour occurs either for the individual, or in the context of a group, or an organization. Consumer behaviour involves the use and disposal of products as well as the study of how they are purchased. Product use is often of great interest to the marketer, because this may influence how a product is best positioned or how we can encourage increased consumption.
Tourism in India is one of the largest service industries which contributes around 6.23% to the GDP and 8.78% of the total employment in the country is estimated to be in this industry. In 2011, total Foreign Tourist Arrivals (FTA) in India were 6.18 million and Foreign Exchange Earnings stood at US$ 16.691 billion ,up 17.6% from previous year figure of US$ 14.193 billion and that is expected to increase to US$375.5 billion by 2018 at a 9.4% annual growth rate. The majority of foreign tourists come from USA and UK. Kerala, Tamil Nadu, Delhi, Uttar Pradesh and Rajasthan are the top five tourist destinations in the country. Domestic tourism in the same year was around 740 million. Ministry of Tourism is the nodal agency which formulates national policies and programmes for the development and promotion of tourism. In the process, the Ministry consults with the other stakeholders in the sector including various Central Ministries, the state governments and union territories and the representatives of the private sector. Efforts are being made to promote new forms of tourism such as rural, cruise, medical and eco-tourism. The Ministry of Tourism also maintains the Incredible India campaign to attract tourist inflow.
According to World Travel and Tourism Council, India will be a tourism hot-spot within 2018. The Travel & Tourism Competitiveness Report 2007 ranked India’s tourism sixth in terms of price competitiveness and thirty nineth in terms of safety and security. India's rich history and its cultural heritage and geographical diversity make its international tourism large and diverse. It presents heritage and cultural tourism along with medical, business and sports tourism.
PLC IN TOURISM
From this diagram it is found that it is found that India is at its growth stage presently and it will reach maturity stage in which it will have a stable growth, in next 5 years time, whereas the other developed countries will reach be experiencing a downward trend in their maturity stage during the next 5 years time period.
CONSUMER BEHAVIOUR IN RELATION TO TOURISM INDUSTRY
These are the various factors affecting the decision of the travellers
* family security
* availability of aid
* reasonable rate
* proper communication
Tourists are highly involved in the decisions surrounding their travel experiences. The access to various information has made the customer feel that he is an active participant thus boosting their ego. Their ego and belief in their own instincts and intelligence is very important. Booking over the internet after several comparisons on various websites pricing themselves on getting the best deals than other travellers.
LOYALTY AND COMMITMENT
Now a day’s industries are trying to retain existing customers rather than acquiring new customers. One main reason behind this it is comparatively cheaper to retain the existing customers rather than acquiring new ones. So they involve a number of techniques for doing the same. Price loyalty, in many respects, is replacing brand loyalty because special price tariffs packages are available for repeated customers so that they will stay loyal to the same company or institution or tour operator. Customisation has become the watchword of the day, people no more want to have that “one size fits all” attitude but they do want separate tailor made packages and tariff packs for them. So the era of designing the product and finding customers for it is over and now it is time that we first identify the targeted customers and design a product for them. Since the customer has so many options and have the right to choose the best deal according to him, until and unless the company is able to offer the best deal it might not be privileged to have customers coming back to it.
FRIENDS & FAMILY INFUENCE
Friends and family is one main influencer in buying decisions. So the tour operator should see that everyone has a good image about the travel only then they would suggest the same for others. He should have various measures to redress their grievances and keep them happy an satisfied all the while.
TYPOLOGY OF TOURISTS
Tourists are classified into 6, they are
1. Physical: those tourists who seems to be going on tours for the physical reasons like relaxation, health, exercise etc
2. Emotional: Those tourists who are visiting places due to reasons like nostalgia, fantasy, romance etc
3. Personal: Those who want to roam around inorder to escape from work or tensions or those people who want to visit their friends or relatives falls under this categorisation
4. Personal development: those people who visit places for the sake of learning new skills (eg. Martial arts, dance etc) and gain knowledge i.e. research purpose etc
5. Status: They are people who visit places for the self/ wish fulfilment or exclusivity
6. Cultural: Those who want to see and experiences new cultural practices etc come under this category
CONSUMER BEHAVIOUR MODELS
This model focuses on the relationship between the firm and its potential consumers. The firm communicates with consumers through its marketing messages (advertising), and the consumers react to these messages by purchasing response. Looking to the model we will find that the firm and the consumer are connected with each other, the firm tries to influence the consumer and the consumer is influencing the firm by his decision.
The Nicosia model is divided into four major fields:
Field 1: The consumer attitude based on the firms’ messages.
The first field is divided into two subfields.
The first subfield deals with the firm’s marketing environment and communication efforts that affect consumer’s attitudes, the competitive environment, and characteristics of target market. Subfield two specifies the consumer characteristics e.g., experience, personality, and how he perceives the promotional idea toward the product in this stage the consumer how he forms his attitude towards the firm’s product based on his interpretation of the message.
Field 2: search and evaluation
The consumer will start to search for other firm’s brand and evaluate the firm’s brand in comparison with alternate brands. In this case the firm motivates the consumer to purchase its brands.
Field 3: The act of the purchase
The result of motivation will arise by convincing the consumer to purchase the firm products from a specific retailer.
Field 4: Feed back
This model analyses the feedback of both the firm and the consumer after purchasing the product. The firm will benefit from its sales data as a feedback, and the consumer will use his experience with the product affects the individuals attitude and predisposition’s concerning future messages from the firm.
The Nicosia model offers no detail explanation of the internal factors, which may affect the personality of the consumer, and how the consumer develops his attitude toward the product. For example, the consumer may find the firm’s message very interesting, but virtually he cannot buy the firm’s brand because it contains something prohibited according to his beliefs. Apparently it is very essential to include such factors in the model, which give more interpretation about the attributes affecting the decision process.
This model suggests three levels of decision making:
1. The first level describes the extensive problem solving. At this level the consumer does not have any basic information or knowledge about the brand and he does not have any preferences for any product. In this situation, the consumer will seek information about all the different brands in the market before purchasing.
2. The second level is limited problem solving. This situation exists for consumers who have little knowledge about the market, or partial knowledge about what they want to purchase. In order to arrive at a brand preference some comparative brand information is sought.
3. The third level is a habitual response behavior. In this level the consumer knows very well about the different brands and he can differentiate between the different characteristics of each product, and he already decides to purchase a particular product. According to the Howard-Sheth model there are four major sets of variables; namely:
These input variables consist of three distinct types of stimuli (information sources) in the consumer’s environment. The marketer in the form of product or brand information furnishes physical brand characteristics (significative stimuli) and verbal or visual product characteristics (symbolic stimuli). The third type is provided by the consumer’s social environment (family, reference group, and social class). All three types of stimuli provide inputs concerning the product class or specific brands to the specific consumer.
a) Perceptual and Learning Constructs,
The central part of the model deals with the psychological variables involved when the consumer is contemplating a decision. Some of the variables are perceptual in nature, and are concerned with how the consumer receives and understands the information from the input stimuli and other parts of the model. For example, stimulus ambiguity happened when the consumer does not understand the message from the environment. Perceptual bias occurs if the consumer distorts the information received so that it fits his or her established needs or experience. Learning constructs category, consumers’ goals, information about brands, criteria for evaluation alternatives, preferences and buying intentions are all included. The proposed interaction In between the different variables in the perceptual and learning constructs and other sets give the model its distinctive advantage.
The outputs are the results of the perceptual and learning variables and how the consumers will response to these variables (attention, brand comprehension, attitudes, and intention).
c) Exogenous(External) variables
Exogenous variables are not directly part of the decision-making process. However, some relevant exogenous variables include the importance of the purchase, consumer personality traits, religion, and time pressure.
The decision-making process, which Howard-Sheth Model tries to explain, takes place at three Inputs stages: Significance, Symbolic and Social stimuli. In both significative and symbolic stimuli, the model emphasizes on material aspects such as price and quality. These stimuli are not applicable in every society. While in social stimuli the model does not mention the basis of decision-making in this stimulus, such as what influence the family decision? This may differ from one society to another.
Finally, no direct relation was drawn on the role of religion in influencing the consumer’s decision-making processes. Religion was considered as external factor with no real influence on consumer, which give the model obvious weakness in anticipation the consumer decision.
This model was created to describe the increasing, fast-growing body of knowledge concerning consumer behavior. This model, like in other models, has gone through many revisions to improve its descriptive ability of the basic relationships between components and sub-components, this model consists also of four stages;
First stage: decision-process stages
The central focus of the model is on five basic decision-process stages: Problem recognition, search for alternatives, alternate evaluation (during which beliefs may lead to the formation of attitudes, which in turn may result in a purchase intention) purchase, and outcomes. But it is not necessary for every consumer to go through all these stages; it depends on whether it is an extended or a routine problem-solving behaviour.
Second stage: Information input
At this stage the consumer gets information from marketing and non-marketing sources, which also influence the problem recognition stage of the decision-making process. If the consumer still does not arrive to a specific decision, the search for external information will be activated in order to arrive to a choice or in some cases if the consumer experience dissonance because the selected alternative is less satisfactory than expected.
Third stage: information processing
This stage consists of the consumer’s exposure, attention, perception, acceptance, and retention of incoming information. The consumer must first be exposed to the message, allocate space for this information, interpret the stimuli, and retain the message by transferring the input to long-term memory.
Fourth stage: variables influencing the decision process
This stage consists of individual and environmental influences that affect all five stages of the decision process. Individual characteristics include motives, values, lifestyle, and personality; the social influences are culture, reference groups, and family. Situational influences, such as a consumer’s financial condition, also influence the decision process.
This model incorporates many items, which influence consumer decision-making such as values, lifestyle, personality and culture. The model did not show what factors shape these items, and why different types of personality can produce different decision-making? How will we apply these values to cope with different personalities? Religion can explain some behavioral characteristics of the consumer, and this will lead to better understanding of the model and will give more comprehensive view on decision-making.
The diverse characteristics of the tourists makes the study of consumer behavior in tourism industry very complex and also the inadequacy of consumer behavior models which can be related to the study made it a little complex. Most of the models in consumer behavior relating to the tourism industry seems to be linear rather than simplistic when compared to general consumer behavior models