1. Understanding Individual Customers
Chapter Eight
Understanding Individual Customers

2. 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

3. 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

4. Exhibit 8-1: Maslow’s Hierarchy of Needs

5. 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

6. Exhibit 8-2; The Buying Decision Process

7. 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

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

9. 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

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

11. 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

12. 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

13. 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

14. 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

15. 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

16. 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

17. 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

18. 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

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

20. 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

21. 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

22. 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

23. 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

24. 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

25. 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

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

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