Consumer Behavior and Holiday
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1. Consumer behavior
Consumer behavior is defined as the study of individuals, groups, or organizations and the processes they use to select, secure, use, and dispose of products, services, experiences, or ideas to satisfy needs and the impacts that these processes have on the consumer and society. It includes different processes and aspects before, during and after the time customers consume goods or services. This report will be concentrated only on decision-making process of holiday purchase.
2. The case
This report will show the study in a specific case which relates to the context of going on holiday. There were 27 Belgian households including single, couples, families and groups of friends to be the samples of this research. Over one-year period, authors followed and studied their process when they decided to have holiday. The work was carried out very carefully and the samples were interviewed four times in total: three times before their holiday in summer and once after that. From the result of these interviews, authors found out many signs and findings that can adjust the way people thought about consumer decision-making.
3. Reason for studying the case
Nowadays, along with the economic development and the increase of living standard, tourism demand becomes higher and higher attracting much effort to research consumer behavior in this field in order to create effective marketing strategies. There are different views and beliefs about the way customers make decisions buying a holiday. Studying this case can help marketers understand clearly what may happen in fact, so they can find out the inference to market and promote holidays.
On the other hand, this case provides a chance to challenge the traditional problem solving model of consumer decision-making process and see the differences between it and practical situations of holiday decision-making. Therefore, it will bring out the divergence in theory and reality, which shows the necessity to be flexible applying theory into changing external environment.
In order to make the report clear and easy to follow, it is necessary to indicate which method was used in (comparing and) analyzing. Content of assignment brief is a particular case study and there is few theory, so most analysis below was written according to the theory in the lecture on consumer market behavior and used a comparison based on the theory to point out the differences in specific circumstances.
Theory shows that the consumer market consists of all the individuals and households who buy or acquire goods and services for personal consumption. Besides, there are not only internal characteristics that determine our behavior such as psychological and personal but also external influences that represent the environment in which the individual behavior takes place: cultural and social. In decision-making, five steps were identified: need recognition, information search, evaluation of alternatives, purchased decision and post-purchase evaluation.
In the case study, comparison and analysis between theory and specific example were applied. This report relies on the theory to study each kind of analysis decision-making – traditional view and decision-making described in the case – then make comparisons to see the typical difference between the two types.
III. Holiday decision-making process
1. Holiday decision-making
a) Traditional views
There are two similar models in the traditional views which have different stages but the same logic.
The first approach – Engel, Blackwell and Miniard model – is built up from problem-solving perspective that considers any need to be a problem. This problem can be solved when customers take a course of action to satisfy the need. It involves five stages that happen step by step.
o Need recognition: Consumers think and recognize their need or want. Need recognition occurs when consumers realize that they are out of the product, when they receive new information about a good, service, or business or when a definable event happens. In this case, it can be seen as the generic decision of customers to go on holiday.
o Information search: They search for the information that is helpful in making a purchasing decision. The information can be obtained from many sources such as personal sources or public sources.
o Evaluation of alternatives: During this stage consumers usually compare products with respect to their various features and benefits. They may compare product brands, styles, sizes, colors, prices, and related services and also products at various stores. Then, they evaluate the importance of certain information.
o Product choice (purchase): After doing some research and evaluating available choices, they are now ready to make a purchase decision, the actual buying of a specified product.
o Decision outcome (post-purchase evaluation): After customers make buying decisions, they often continue to evaluate them. Post-purchase evaluation occurs when a customer looks for reasons to support a purchase decision to see the level of satisfaction using this product.
Another approach is tri-component attitude model (C-A-B sequence).
o Cognitive component: Customers’ thoughts and beliefs about a product that are based on both personal knowledge, actual experience and the ones of other people. It is the rational influence on attitude.
o Affective component: Consumer feelings about a product that flows from beliefs.
o Behavioral component: Consumers’ intention to act positively, negatively or neutrally toward a product.
From two approaches above, people consider existing model of holiday decision-making as a reasonable process containing plans that are developed continuously. Customers are aware of their need (problem) and seek the solution rationally. People believe that in decision-making process, consumers will focus on their ideas and have the perception of risk or demand. The process starts from a generic decision to go on holiday and will be built up step by step. Also, searching for information is paid attention to.
In other words, consumers are described as rational and risk averse. The way they decide is systematic, concentrated and organized.
b) Decision-making described in the case
Apparently, decision-making for holidays is an ongoing process and it could be changed by various factors. However, in order to find out how this process operates and works, the findings can be catalogued into four main points. Each and every point may affect to the decision so that they are just for referenced.
To begin, the first step of process may be any idea about the holiday even an impulsive feeling in a moment, not necessary to be the generic decision about whether they want a holiday or not. As can be showed in the case, consumers who were not sure about their possibility to go had decided many other things related to that trip.
Next, there are no fixed sequential steps in this process, so the continuous development of the plans is often impossible. Holiday plans are always affected by personal situations. Sometime customers have idea suddenly to purchase a holiday but doing nothing to approach it. There are two ways to explain this that the idea can be only a daydream and it is unrealistic to do that according to the customers’ situation, or customers themselves are not aware of their desire and opportunities and the idea will be put aside until another factor influences them to think back about it.
Then, because the decisions related to holidays are usually emotional and lack of information, people often waver to take action. Their feelings make them delay final decisions until the last moment. Therefore, holiday booking are made very late. On the one hand, it shows the unorganized thoughts of customers. On the other hand, it can also help them to avoid risk, have new opportunities and increase expectation.
Finally, for the reason that the process of decision-making for holiday is not as rational and carefully as normal purchase, the ratio of consumers who find regret is high. Some people could maintain their point of view, but many others do not. They create their ideas or plans and then change because of specific reasons or regret. In details, they may think about more interesting holiday plan so that the old plan makes them regret.
c) Similarities and differences between traditional and practical views
The decision for holiday come from the desire of people which make their holiday time become as interesting as possible.
In traditional views, it is necessary to recognize the need before people can satisfy it, which means they are conscious about what they want and how to have it. The process starts from a point that without it the next step cannot be taken. By contrast, the people in this case are less rational but more emotional when the plan can be create from any idea at any stage. The process is also more flexible.
According to existing models, people sum up all information they know to evaluate all alternatives in order to give the final choice regardless of awareness or not. Otherwise, actually people do not search information actively and do not think about comparison much. Needs and solutions are only linked together because they appear at the same time. In detail consumers lack overall evaluation.
Moreover, it is assumed that customers are reasonable, so they focused on their plans and search information carefully in order to build up complete plans to avoid risk. However, in reality people prefer unexpected things and the decisions are made more naturally without consider everything much.
2. Information search process
In order to have a clear understanding on theories related to consumer behavior and their role in analyzing markets, it is necessary to compare side by side of two different models of consumer decision-making. It is suggested to make a comparison of the information search process between holiday decision-making (decision-making described in the case) and perfume decision-making (traditional view). That is an important step which can have effect on result of the whole process leading customers to buy the product or not.
Consumers engage in both internal and external information search:
– Internal search involves the consumer identifying alternatives from his or her memory. For certain low involvement products, it is very important that marketing programs achieve “top of mind” awareness.
– For high involvement products, consumers are more likely to use an external search.
The information search process that consumers might follow can be various for each product category. In this case, we take a perfume’s information searching process as an example. The traditional information searching process consists of 4 main steps which are identification of decision criteria; identification of source information; weighting the criteria and finally, developing choices or alternatives.
a) Perfume information search
Perfume is a specific product that customer can see, feel and try easily. Obviously, it is easy to see that perfume decision-making is performed according to traditional model that includes five typical steps of decision-making. Information search is the second step after need recognition.
Customer past experiences with items in this product class are considered. It means that perfume quality is evaluated with customer’s own experience through their use before or even others use. In doing so, customer could have an accurate view about this product because they have seen it in real life.
In the first step, customers often set the criteria through: brand name, producer, price, type of fragrance, style, product line, and rating.
The second step, customers will base on these criteria to get the information via different sources including the Internet, salesman, magazine, family/friends, media and dealerships.
– Word of mouth: Before buying a perfume, the customer may ask friends’ opinions. Recently, perfume has become increasingly popular because of refined luxury and its appeal. It attracts the use of both male and female. Because smell, trademark and design divers, it is difficult to choose a suitable perfume without friends’ suggestions.
– Media: This is a useful channel to gain detail information. It contains Internet, television and magazine. Customers may seek products’ profile to know whether it is suitable or it has effect on the skin. They also read reviews in Consumer Reports, consult several web sites.
– Visiting several dealerships and trial: It is also an effective way to stimulate correctly about the perfume which customers like. A real product can be held, smell and bought. In addition, coming to dealerships, customer will be further consulted other good products.
The third step is weighting the criteria. Customers will classify the information into these criteria.
At last, they come to their own decision.
b) Holiday information search
Holiday is an invisible thing that people do not see and touch, but just sense. According to many customers’ views, information search is not always really necessary stage in the holiday decision-making process. However, information collection tends to be ongoing and it does not stop even when the holiday has been booked. Besides, substantial amounts of information are gathered during or just after the holiday experience. As a result, holiday decision-making would prefer internal search than external search.
Holiday information search which is usually memory-based is collected accidentally and passively, not on purpose. That information is not processed but remains in memory and emotion, it may not be seamless and clear. However, once there is something to remind them or they increase the demand for these things, memory could suddenly go back. Furthermore, collected information is not regularly used immediately. Sometimes it even is put aside.
Internal search concentrates on emotion and mood. Sometimes, holidaymakers decides according to emotions and feeling at this time, as a result it makes the limited in decision-making because of weak predictor of actual choice and the extent of information collection.
There is a little information that is searched via ways of stimulus-based. Due to the fact that a majority of holidaymakers prefer serendipitous discoveries and the unexpected, many people think it is better to go without having seen or read anything. It is argued that incidental learning seems to play a bigger role than intentional learning.
c) Difference between perfume and holiday information search
When seeking information on perfume, people are more intentional. They require detailed data that can tell them each and every feature of the product, which can help them compare among different brands, products, prices and so on. By contrast, almost all information consumers have on holiday is incidental. They depend on emotion more than reason to decide, so they do not need complete information but pay more attention to attractive points.
Therefore, perfume information search takes more time when people need to focus on the work. On the other hand, consumers do not spend time reading holiday information.
Searching for holiday information tends to be memory-based, which means it is more internal while for perfume information is stimulus-based (external). It is because holiday is a experimental product.