This section was written by Abhijeet Shirsat.
Consumer behavior is a phenomenon in which the consumer pays a price value in exchange for goods or services (Kotler, 2003). The consumer gets involved in this transaction for personal needs and wants and could be influenced by a variety of individual, social, cultural, and psychological factors (Kotler, 2003). In this section, we elaborate on the aforementioned factors which will help in considering the consumer satisfaction index.
- Cultural Factors: Cultural factors are based on the set of values, ideas, attitudes, and symbols created to shape human behaviors (Kotler, 2003).
- Social Factors: Social factors are based upon the perceived feedback from the people in their immediate circle, friends, social media, and reference groups (Kotler, 2003).
- Personal Factors: Consumer’s decisions are based on personal factors such as age, occupation, income, lifestyle, personality, and self-concept (Kotler, 2003).
- Psychological Factors: A consumer’s buying habits may depend on psychological factors like motivation, perception, learnings, beliefs, and attitudes (Kotler et al., 2017).
In the age of technology, the needs and wants of the consumer are rapidly changing and evolving. Social media is playing a significant role in this shift of the paradigm which has influenced the way people make their decisions and how they consume the product and services (Kotler et al., 2017). Hence, it is important to understand the needs and wants of the consumers of hospitality and tourism businesses in order to implement marketing strategies.
Other changes in consumer behavior come from the financial income of the consumers, age, generational differences, gender, religion, race, occupation, and brand image of the products (Kotler, 2003). These factors could lead to shifts in the consumption of the products and services from the hospitality and tourism industry. In the 21st century, the hospitality and tourism industry needs to evolve with these changes in order to keep the competitive edge in existing and evolving markets.
Culture is one of the most important determinants of a person's needs and wants (Kotler, 2003). As noted above it comprises the values, ideas, attitudes, and symbols that shape human behavior. Determinants of cultures are expressed by tangible items like food, architecture, clothing, and arts. Hence culture plays a vital role in the hospitality and tourism industry and it determines one's choices of food, travel, and stay (Kotler, 2003). Marketers are constantly trying to identify the changes in cultures in order to help companies devise new products and services. For example, the shift towards vegetable-based food has resulted in menu changes in restaurants. The cultural shift towards healthy eating has resulted in healthier food options at restaurants.
Humans are social animals and they constantly strive to belong to particular groups. It could be small groups of friends, family members, or other social groups. These groups have a direct influence on the person’s behavior and decision-making. Groups that directly influence the decision making of an individual are called membership groups (Kotler, 2003). On the other hand, the groups that help influence in comparing or reference forming directly or indirectly are called reference groups. For example, young people aspire to work and gain fame like celebrities and have lifestyles like them. These groups help influence the behavior of the followers in the class.
As referenced above, consumer decisions are based on personal factors such as age, occupation, income, lifestyle, personality, and self-concept (Kotler, 2003). People’s choices change as they grow and evolve with life-cycle stages. For example, younger consumers prefer modern and stylish clothes and prefer to go with the current trend, however, mature consumers prefer comfort over trends. Consumers traveling for leisure will expect different products and services in different life-stages and the preferences will evolve with time. Marketers have to constantly look for the changes in the preferences in order to build on the current preferences of the consumers.
A consumer’s occupation also affects the choices they make while consuming products and services. For example, people who can work from home will often look for leisure activities away from home and may be more willing to travel to further destinations for a change of location, however, people who constantly travel for work may prefer something close to the home for leisure to avoid the traveling phenomenon. Another example is people who frequently travel for work may invest time and money in the frequent flyer’s programs and the associated perks. People who travel only once in a while for work may not care about the frequent flyer programs and the associated perks as they may not benefit widely. Marketers try to identify the occupational changes in the preferences of the products and services and cater to those changes of the occupational groups.
A consumer’s income plays a vital role in the choices that the buyers make of products and services. During a recession, consumers may cut back on leisure activities and travel to save money for the family and emergencies. Periods of economic prosperity may create more opportunities for the same consumers to spend more on leisure activities and travel. Depending upon economic conditions and the disposable income of consumers the trends change. The has to redesign and reposition the products and services to adapt to these changes in market conditions.
Lifestyle is the way a person’s pattern of living and time is spent on a variety of activities. People from different subcultures, values, social class, and occupations may have different lifestyles and may choose different products and services that suit the pattern of their personal life. For example, on one hand, people who love sports may be willing to spend time and money to travel to different countries and places to watch a game. On the other hand, people who do not have an interest in sports may find it a waste of time and money. They may prefer traveling somewhere exotic with their available disposable income. The choices are clearly dependent on lifestyle and preferences.
A consumer’s personality influences their buying behavior and patterns. For example, people who are personally social may prefer to go out and spend time at public events for pleasure. People who are not interested in social gatherings may find pleasure in spending time with family. Other examples are people who like outdoor adventures may not mind spending money on outdoor activities and people who like food may not mind spending money on eating in an exotic restaurant. Personalities influence decisions and marketers watch for people’s tastes to allure them with a variety of products and services.
As described above, consumer’s buying habits may depend on psychological factors like motivation, perception, learnings, beliefs, and attitudes (Kotler et al., 2017). All the psychological factors are either biological (that arise from a biological need like hunger, thirst) needs or influenced by a situation or a state of mind. A person preferring to eat more (mostly snacking) during a tense situation or studying is a psychological phenomenon. A person preferring to shop online during a global pandemic is a state of mind in which he or she prefers to be safe at home. This behavior is a result of the consumer learning the disease transmission rate and the fear of contracting the disease. The fact that two people may have different perceptions of the same situation and may react differently is also a psychological factor. Belief is a descriptive thought and may arise from real knowledge, opinion, or faith in certain information (Kotler et al., 2017).
Consumer behavior is a widely discussed topic that investigates consumer purchasing decisions that are influenced by the aforementioned four factors: cultural, social, personal, and psychological. Marketers constantly perform analysis on the trends and factors associated with consumer behaviors in order to gather information and redesign, reinvent, and reform the products and services that match with current trends in the market. To clearly understand consumer buying behaviors, marketers must study the decision-making process of consumers. The process of buying a product or service starts much before the product or service is consumed, but the ultimate decision stage of buying is important to study to understand the stages of decision making. In the hospitality and tourism industry, the behavior of the consumer is difficult to predict routinely. For example, restaurant managers cannot predict the number of customers who will visit the restaurant each day as there are several factors (cultural, social, personal, psychological) that are associated with the consumer’s decision-making process. In a similar manner, it is difficult for tour operators to predict the number of tourists who will visit a particular destination at any given point in time. However, a calculated prediction is made by restaurant managers and tour operators to determine the number of clientele each will serve based on historical data and current events in the nearby area. Often this prediction provides a general idea (rough estimate) for the organizations to be prepared for a certain number of customers. However, these predictions may sometimes fail and the managers of these organizations have to show a sense of urgency to adapt to the change and serve the clientele without much lead time available at hand. Hence the hospitality and tourism industry could be considered as the industry that runs based on constant fluctuations in consumer behavior. In the end, we can say that consumers are conscious decision-makers and are subject to external changes in developments in society.
"Marketing for Hospitality & Tourism, 5th Edition" by Philip Kotler, John T. Bowen, and James Makens, Pearson. All Rights Reserved.
"Marketing for Hospitality & Tourism, 8th Edition" by Philip Kotler, John T. Bowen, James Makens, and Seyhmus Baloglu, Pearson. All Rights Reserved.