Advanced Consumer Behavior
6SZ 009 Coursework 1
A critical analysis of consumer decision-making process in today’s hospitality industry
Student Name: Ming Kai Eric, WONG (BAH2)
Student Number: ****
Submitted to: Mr. D. Bradley
Submission Date: 08th April, 2011
A report submitted in partial fulfillment of the requirements of the Degree of Bachelor of Arts with Honors in Hospitality Management
SHMS UC
University of Derby
2011
Abstract
This report is to critically analyze two consumer decision-making models and combine some postmodernism factors inside, such as Hyperreality, Fragmentation, Branding and customer loyalty. Therefore, the evaluation for the CMD models which is going to defined those models are vague or all-encompassing for apply in hospitality industry. Simple Model of Decision-Making Process model (Simth & Taylor. 2004) and Normative Model of Consumer Decision Making model. (William, 2002)are going to analyze in this report.
Furthermore, aim and objectives and methodology are also mentioned in this report.
Acknowledgements
The author are be grateful for Mr. Bradley to provide a guideline and suggestion for this report. Besides, The theories, models and basic concept which about consumer behavior that taught and discussed in the lectures and tutorials lessons. All of above help the author to more deep understanding in consumer behaviors topic.
Extra readings for books and literatures which offered by Mr. Bradley are helped the author to finish this report successfully .
Table of Contents
1. Introduction. 5
2. Aim and objective. 11
3.Methodology. 12
4. Finding and analysis. 13
5. Conclusion. 20
6. Reference List21
1. Introduction
Normally, hospitality is referring to hotels and restaurants in most of people mind. In the author opinion, hospitality industry is referring to a industry that consumer consume mostly depend on provider's quality of service and product. On the other hand, hospitality industry is a broadness scope that transportation, cruise line and lodging industries are also included as well as hotels and restaurants.(Barrows, C. & Powers, T 2009) Currently, market trend for hospitality industry are going to more consumer oriented. Its mean that hospitality industry provided products and services are require to fulfill the consumers' needs, demands and wants.
Similarly, more understanding the consumers behavior is become an important aim in hospitality industry.(Bowie & Buttle, 2004) Clearly understanding consumers behavior of their needs, wants and demands can also benefit for the organization management.(Blackwell et al, 2006) Consumer Decision-making Process (CDP) is theories model to explain and evaluate the factors and reasons that influenced the decision of consumer making.
Hence, hospitality industry can progress the business, products and services, develop the advantages and improve the weakness base on this tool of evaluated consumer behavior.(Gurley et al., 2005) In this report, the author will critical analyze two CDP models and apply in hospitality industry in order to complementary develop the efficiency and be success for the industry.
1.2Consumer behavior
Consumer behavior referring to the decision-making process of consumer and also referring an activity which involved in obtaining, using or disposing goods and services from a provider. (Blackwell et al, 2006) Moreover, consumer behavior is much more meaning than an activity for buy things, it also a study of involved in the activity influences the life and also the feeling of self-exist.( Solomon, G. 2008) Besides, the main purpose of study in consumer behavior topic is find out the reason that people willing to or not willing to consume for the product or service.( Swarbeooke, J. & Horner, S. 2007) Currently, the main aim of hospitality industry is accentuate on consumer satisfaction. (Kandampully & Suhartanto, 2000).
On the other hand, study in consumer behavior for hospitality industry is become more and more important in order to identify customers' thought and link it to the business development in strategic direction. (Reid & Bojanic, 2010) In addition, deeply understanding in consumer behavior and fulfill the consumer satisfaction can make the consumers to repeat consume the organization and loyalty customer is a key to success in strategy business.(Evans et al. 2006) Therefore, it also a reason that study in consumer behavior is important in hospitality industry.
1.3 Postmodernism
Postmodernism that a term which become popular since 80s. It is a transformation in marketing that involved in theorized, evaluated, researched and practiced.(Firat et al., 1995) According to Mr. Burton (2000) “consumers in post modernity are basically different from those in modernity whose predictable behavior could be explained by a reliance on traditional variables such as social class, income and demographics”.
As a result, postmodernism is a transformation that is occurring in nowadays. Hospitality industry's marketer cannot predict the consumer behavior in traditional concept which base on ethnicities, income or social stratums. Postmodernism is a complicated study and it is difficult to find a common definition.(Peron & Peron, 2003) Nevertheless, the author believe that postmodernism is mean of organization are required to always create or import new things to the business in order to fulfill the new concept of expectation for the consumers.
Peron & Peron (2003) also support the author's point of view. Creativity, expression and innovation are become more and more important in nowadays' extremely high competitive environmental. In addition, According to Brown (1992) the other definition of postmodernism is consumer behavior base on the mood perspective and state of mind rather than a body of theory or a conceptual framework.
And Ogilvy (1990)also add sometimes consumer may behave as upscale at success man because they are depending on mood and situational context to consume. Hence, the author strongly recommend that hospitality industry need to investigated in this topic because postmodernism positive impacts are predicted to influence the industry business. Hence, the author are going to evaluate the seven characteristics of postmodernism theory of Brown (1995) which including fragmentation, de-differentiation, hyperreality, chronology, pastiche, anti-foundationalism and pluralism.
As the following, this report is going to explain some of these characteristics that the author think that which can apply in hospitality industry.
1.4 Fragmentation
Fragmentation referring to a big market break into smaller and smaller market and develop a diversity product industry. (Parsons & Maclaran, 2009) Its mean that is a mass market are break into small and small segments and those segments' organization are provide many kinds of product in order to provide more opinions for customers chose.
For example, fast food restaurants is one common example in hospitality industry. McDonald is a most success and outstanding fast food restaurants in fragmentation marketing of postmodernism. At the beginning, McDonald is just provided burgers, chips and drinks for the service. Nowadays, McDonald is providing more product rather than burgers, chips and drinks. they created new products like Salads, nuggets and chicken wings for customers in order to provide more choice for them to consume and increase their profit.
According to Parsons and Maclaran,(2009) hyperreality referring to a blurring of different between the real and the unreal and the consumers are more influence by the unreal factor. As mentioned, creativity and innovation in postmodernism study is important. In the author point of view, hyperreality absolutely represent the high creativity and innovation in postmodernism.
Nowadays, hospitality industry created many unreal factors to attract consumers to spent real money in real life. Moreover, Disneyland Hong Kong is a good example for example is segment. Disneyland Hong Kong is a theme park which combine with hotel, restaurant and theme park. Back to the basic, this organization are provide a lodging, food, beverage service and sightseeing.
However, currently Disneyland Hong Kong provided services are much more than the basic and really expensive but still has so many people are visit there and willing to spent so many money over there. Actually, people visit there mostly because of their created unreal factor. Disneyland Hong Kong created unreal factor everywhere, for example that you can see a shape everywhere similar with Mickey Mouse like restaurants, hotel rooms, public area and even in toilet.
Mickey Mouse is not just a cartoon and it is the symbol represent for Disneyland culture and value. Therefore, most of the customers are willing to spend their money for this unreal factors.
1.6 Chronology
Chronology is defined as organization provided the goods or services in a retrospective perspective .(Parson & Marcalan, 2009) Its mean that organization provide some traditional or backward looking perspective services or goods for customer to experience some senses of past.
Hai Kou Eadry Royal Garden Hotel in China is a good example. it is a new hotel which started at November of 2010 and before constructed the former address are temple and playground. Besides, this hotel are reorganized and constructed the old facilities and installed some modern styles as well. The unique point that hotel point out for their marketing is combination with historical and present generation.
Therefore, the guests can stay in the hotel to enjoy the atmosphere and also experience a sense of old style accommodation experience over there.
Branding is intangible and exists in each consumers' mind and branding can identify as long-term promises that has some special meaning towards the consumers for an organization.(Wertime, 2002) Branding also is the first step to develop a marketing strategy.(Solomon, 2006:328) On the other hand, develop the brand image in a organization is really important that to achieve the successfully business.
Moreover, Branding and customers' loyalty level are exists a close relations. According to Schreuer, (2000) the efficiency way to get customers' loyalty is first to construct a enquire brand image. Most of the customers decide to repeat consume the organization because of the organizations' branding. Moreover, loyal customers is really important in hospitality industry. loyal customers can lest the organization more profitability when the economic market is good and also can absolutely help the organization the face the problems when the economic market is in a bad condition.(Lawfer, 2004) In addition, nowadays, hostility industry is more force on keep the loyal customers.
For example in many Hyatt Beijing, China. They import a system that to upgrade some loyal customers room type without any extra charge in order to keep the loyal customers to return and return consume in the hotel.
1.8 Consumer Decision- making Process Models
Consumer decision-making process models are broadly use for organizations' marketing segment to research and study in consumer behavior topic. (Erasmus, et. 2001) As mentioned, Consumer Decision-making Process (CDP) models can help hospitality industry to progress the business, products and services, develop the advantages and improve the weakness base on this tool of evaluated consumer behavior.(Gurley et al., 2005) Therefore, the author is decided to choose two models to investigate in and analyze those models of the possibility to help hostility industry.
2. Aim and objective
2.1 Aim
The aim of this report is to critical analyze two consumer decision-making models and apply in hospitality industry in order to those models are vague or all-encompassing.
2.2 Objective
1. Review the literatures which related to consumer behavior study in order to more understanding in the study.
2. Research for CDP models in order to decide which two CDP models are suitable for hospitality industry.
3. Critical analyze two decided CDP models and apply in hospitality industry.
3.Methodology
Due to the time limitation, this report are mostly use in secondary resources rather than information get from primary research. The secondary resources which use in this report are books, articles, literatures and also some published information in the internet. Besides, all the resources and information that researched for this report are mostly focuses on consumer behavior study and CDP models in order to achieve to aim that mentioned before.
Therefore, most of the secondary resources like books and literatures were borrowed from the library in SHMS, Leysin and some of the articles that use in this report are provided by Mr. Bradley from the class and which he send through the internet before.
Another limitation for this report is the number of book which in school library are limited. Hence, sometimes is difficult for the author to find more supports and analyze critically for the CDP models and theories of consumer behavior study. Nevertheless, the author are going to obtain more information to supports the author's point of view in order to finish this report successfully.
4. Finding and analysis
In this part the author is doing to develop a discussion about two CDP models which are Simple Model of Decision-Making Process model (Simth & Taylor. 2004) and Normative Model of Consumer Decision Making model. (William, 2002) Apply in hospitality industry and justify its possibility in a real example is the following part.
4.1 Simple Model of Decision-making Process
Simple Model of Decision-making Process is a model that toward into consumer behavior and highlighting seven stages that the consumer must go through.(Simth & Taylor. 2004)
Source: Smith and Taylor (2004)
The first stage of this model is problem recognition. According to Wright (2006) the first feeling that come up from the consumers' mind that encourage them to consume is a sense that they are missing something . On the hand, the most basic factor that encourage consumers go to consume is their needs and the needs can identify in tangible and intangible such as products and services.
After that, they will going to buy and get the products or services. Nevertheless, it is not the end of this CDP model to explain the consumer behavior after the consumers get the products or services. Simple Model of Decision-making Process model identify that after the consumer consume and already experience the products or services, consumer will going to compare the experience to the expectation that they assumed before.
Therefore, consumers' loyalty level are increase and will going to repeat consume the organization because this consume experience is satisfy them, and opposite situation will happen if the consumer is dissatisfy for the experience. According to this model defined, dissatisfaction consume experience influence the consumer's perception of the organization, and the term which it using in this model is call Brand rejection.(Wright, 2006)
4.11Example
In the following example, the author would like to combine the consumer the behavior concepts which mentioned before into simple model of decision-making process. Branding and loyalty customer and fragmentation will be combine in this following example. This example is a male consumer in Grand Hyatt hotel Hong Kong.
Basis on this problem and requirements, this consumer had asked his friends, family and also found some information from the internet. After the information researched, he try to evaluated the information. He found out some of the hotels have a good lodging facilities but do not have good swimming pools and some of the hotels are with opposite problem. Besides, he also realized that he want to have a excellent experience for this time and he is willing to pay for it, so he decided to chose a 5 star hotel.
Finally, he decided to chose Grand Hyatt Hotel Hong Kong to consume and spent his holiday over there. He made a reservation for a room with swimming package. After he spend the holiday in Grand Hyatt Hotel Hong Kong, he think that he had a good experience over there and he decide to go back again to spent his next holiday in there with consume more for the room upgrade.
Basis on the models theory, this example seems that is really suitable for hospitality industry. Since the consumer get a good experience in a hotel, fulfill the expectation which he assumed before and become a loyalty customer of that holiday. Everything seems prefect. However, in the author opinion, this model is still existed a criticism point to agree. Hospitality industry is not a industry provide product and service, many customers consume in hospitality industry are mostly depend on the environment, atmosphere , directly persons that provide the service to customer and quality of the ``software``.(Firat et al., 1995) On the hand, those intangible factors which influence the consumer behavior are difficult for hospitality to manage.
As a result, the author identify that this model is la little bit vague but not encompassing model apply in hospitality industry. Nevertheless, this model is still a good tools to indentify the customer behavior for hospitality industry market segment in order to understand that how the process of consumer starting from first segment of their problem recognition and end in the segment of decided to go to consume.
4.2 Normative Model of Consumer Decision-Making
Normative model of consumer decision-making are defined by eight steps which start from the first step of decision maker's goal and objectives and end up with Implementation and control.
Source: Williams (2002)
According to William (2002), the first step for this model is consumer will the find their goals and objectives that for their decision. Then, performance criteria is the second step. Consumer is going to deeply understanding for the way to achieve the identified goals and objectives by what criteria.
After that, consumer will indentified some problems during the process and some alternatives will come up as well to face the problems. Besides, the customer are going to finalize the choice and test the criteria. After all the above process, consumer will go to consume for the service or products and then consumer will going to the final step of this model which is implementation and control.
4.22Example
The following example are going to identify this model apply in hospitality industry and hyperreality and loyalty customer will demonstrate in the example. Since a Japanese couple which want to spent their honeymoon trip in oversea country and the woman of this couple is really love into Disneyland culture.
Therefore, their aim stated in this model is planned to spent their honeymoon holidays in one of USA Disneyland hotels. This couple are going to do so many research for the trip with different medias in order to correctly analyze the performance criteria. However, after entre the part 3 of this model stated. They realize that the flight ticket from Japan to USA is expensive because of high travel season impacts.
Basis on this model, this couple will have few alternatives due the problem. First alternative, they keep their plan to go to one of the USA Disneyland hotel but they will over budget for 30%. Second one chose to go to the others countries which fulfill their requirement for their honeymoon. Third, plan for domestic honeymoon trip in Disneyland hotel of Tokyo, Japan.
Same as the first model, this example is seems suitable to apply in hospitality industry. However, it still existed a critical agree point in the author's mind. The highlight point of this model which compare CDM models is the steps of problem identification part and alternative. This model point out that consumers always facing some problems during the decision make process and they also can come up some alternative to face those problems.
On the other hand, its mean that consumer can also decide to choose the other options rather than only choose one organization. In the organization oriented, it may not be a good thing for marketing segment that when many alternatives are come up from the consumer mind. Besides, for the hospitality industry, those problems which consumer identified is difficult to affect and maybe it noun of the business related to hospitably industry such as customers budget problem and global economic impacts.
Nevertheless, the author believe that this models can accept in hospitality industry even it has that weakness that the author identified. Because the author believe that hospilality industry can develop the weakness to an advantage which is keep the uniqueness all the time. A organization build up a uniqueness brand image can attracted consumers to choose the organization even they have so many choices.
5. Conclusion
As concluded, after analyzed the details about consumer behavior and CDP models possibility apply in hospitality industry. The author realize that consumer behavior study is really complicated, especially in the postmodernism segment that how to influence the consumer behavior.
As the author researched , there no common definition to exactly defined the meaning and the ways of influenced. Besides, CDP models theories also cannot 100% to apply in real situation even the author discussed before. The reason of it is some customers will not be fulfilled all the steps which stated in the theories. Some consumers can just go to consume by their moods and without any research and some consumers will not be satisfy all the time even the services or products which already fulfilled their expectation.
Nevertheless, in the fact, one point that the author strongly believe that study in consumer behavior topic and use CDP models to evaluate the organization's customer is become more and more important for hospitality industry in order to stragic develop the business.
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