Understanding Individual Customers Chapter Eight Understanding Individual Customers

Principles of Consumer Behavior Consumer behavior is purposeful and goal oriented The consumer has free choice Consumer behavior is a process Consumer behavior can be influenced There is a need for consumer education

Characteristics of Customers Needs and wants Maslow’s hierarchy of needs People are motivated by different levels of needs Lower levels of needs must be satisfied before higher level needs

Exhibit 8-1: Maslow’s Hierarchy of Needs

Characteristics of Customers Application of theories Need-context relationship Consumers have different types of needs Consumers have wants Businesses must know both in order to provide for customers

Exhibit 8-2; The Buying Decision Process

The Buying Decision Process Needs, wants and problem recognition Sometimes starts as a response to a stimuli The consumer thinks he has a problem and begins to search for a solution

The Buying Decision Process Needs, wants and problem recognition “I’m hungry” (problem) “Let’s eat” (solution)

The Buying Decision Process Search process Search for a solution The set of places that come to mind is the evoked set Marketing can begin to take an active role Marketing can create a want and cause a problem that needs a solution

The Buying Decision Process Stimuli selection Impact of stimulus depends on the level of involvement with purchase decision High involvement Low involvement

The Buying Decision Process Selectivity The process of selective choice may depend on a number of steps Selective attention Selective comprehension Selective acceptance Selective retention Much of what is directed at the consumer is not processed by the consumer

The Buying Decision Process Perceptions Meanings we assign to what we see, hear and sense around us Perceptions are selective Reference group are people who influence our attitudes, opinions and values

The Buying Decision Process Perceptions Perception is reality for the consumer When perceptions do not match the product, it is Gap 4 Initial perceptions rely on stimuli If expectations are not filled, perceptions are negative which can lead to dissatisfaction

The Buying Decision Process Alternative evaluation Multiple solutions are common Marketing is most important for high involvement purchases Influenced by the target market’s choice process

The Buying Decision Process Beliefs What we think is fact which is derived from perceptions Belief-attitude-intention trilogy Marketers can change or create beliefs of targeted consumers

The Buying Decision Process Attitudes How we judge and react to beliefs Emotional feelings toward beliefs Intention A consumer’s plan to make or not make a purchase Should be evaluated in the belief-attitude-intention context

The Buying Decision Process Barriers to purchase Marketers attempt to reduce the barriers Cognitive dissonance Advertising that supports the consumer’s choice and wisdom of the choice has been found to help reduce cognitive dissonance and increase loyalty

The Buying Decision Process Outcomes-satisfaction or dissatisfaction Should have some idea of level of satisfaction Service recovery for dissatisfied customers Application to the hotel industry

Types of Hospitality Customers Business travelers Pleasure travelers Package market Mature travelers International travelers Free independent travelers (FIT) Members of private clubs

Business Travelers A customer who purchases hospitality products or services because of a need to conduct business in a particular area One of the most desirable market segments for the hospitality marketer The largest major segment and least price sensitive Business traveler needs Convenience, reputation, price

Pleasure Travelers Customer who purchases hospitality products or services for leisure or other non-business purposes Business and pleasure travelers combine both in one trip More relaxed and casual Eat and socialize High growth potential market Major part is family travelers People traveling to visit friends

Package Market Customers who purchase a combination of services for an all-inclusive price Normally packages designed to boost occupancy during low-demand periods Not the same as discounting Need to provide all aspects of the promised package

Mature Travelers Hospitality customer who is older than 55 Is increasing as people are living longer, have resources and interest in travel Like to visit new places and visit friends and family Not homogenous; age and physical limitations play a role in needs Some hotel chains aggressively pursue this market Restaurants cater to this segment

International Travelers A person who travels and visits outside his or her own country for business, personal or pleasure purposes Most tourism to/from US is to/from Mexico and Canada 400 million travel outside their country every year Marketing to this group is expensive and risky; usually done via an intermediary Overall marketing goals are the same for this group as for other groups

Free Independent Travelers Traveler not affiliated with an organized travel group and does not fit into other defined market segments Includes wholesalers and retail agents Normally willing to pay higher rates than the group customers

Members of Private Clubs Includes Country City Yacht Tennis Military Rely on word-of-mouth Look for customization of their experience

Discussion What types of hospitality customers would you prefer to have on your property? Why?