process of researching consumer behavior – hospitality marketing discussion
How might the process of researching consumer behavior lead one to the idea of offering clothing-optional cruises? What factors might have been examined and what data might have been uncovered to support the viability of such an offering? Share the results of the word-of-mouth exercise (in red section at the end) : What were the strategies you identified? What were the situations and the segments to which each strategy was tied? Why do you believe each was effective?
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The exceptional success of any business usually has fundamental causes. Among these fundamental causes, the practice of analyzing future trends and then modeling business to serve them can be especially profitable in the hospitality industry.
One recent trend has been the growth of clothing-optional travel, and the multitude of businesses that have come to serve this lucrative niche market is significant. The most successful part of this niche has been in the clothing-optional cruise market.
When looking at the list of successful clothing-optional travel organizations below, consider what factors might have been examined and what data might have been uncovered to support the viability of such an offering in the first place. What lessons can be learned from this niche market success that can be applied to your own business situation?
- Bare Necessities, an Austin-based travel agency, has compiled a record of selling out more than two dozen consecutive charter cruises since 1992.
- The American Association for Nude Recreation (AANR) has 50,000 members in 244 clubs spread across the US and Canada.
- Travel au Natural in Florida specializes in cruises aboard sailing vessels in the Caribbean for male-female couples only.
- No pockets Yacht charters allow groups to rent one of a small fleet of 50-70 foot private yachts.
- Castaways travel offers 33 different package options for the naturist traveler, from Hawaii bed-and-breakfasts to international tours.
- Shangri-La Ranch, a nudist campground located outside of Phoenix, is dramatically increasing the number of drive up RV spaces on its property.
Transcript: More about Social/Interpersonal and Psychological Factors Influencing Buying Behavior
Cultural influences include the values, beliefs, preferences, and tastes created by a given society and handed down from generation to generation.
- The culture may influence how needs are satisfied. For example, in some cultures, the consumption of certain insects is a normal means of satisfying hunger, but this would not be an acceptable method of satiation in other cultures.
- Subcultures are groups that exhibit characteristic behavior patterns sufficient to distinguish them from other groups within the same culture. A subculture is important if specific purchasing patterns can be traced to it.
Consumers may use products to establish identity with a group or to gain membership into it. Consumers are more likely to be influenced by word-of-mouth information from reference group members than by advertising or salespeople.
The family and household
The family is the most important social institution for many consumers, strongly influencing the values, attitudes, self-concept, and socialization process of its members. Knowing which family member is likely to make the purchase decision will influence a firm’s marketing mix.
Marketers are also interested in considering the buying behavior of the household as a unit:
- Who influences the buying decision?
- Who makes the buying decision?
- Who makes the actual purchase?
- Who uses the product?
Buying behavior is often strongly influenced by social and/or economic classes. Marketers use a classification scheme to help them categorize class influences. One such scheme in the United States identifies the following five classes, within each of which are opinion leaders who serve as information resources:
- Upper class
- 2% of total population
- Socially prominent old families and the newly rich
- Live in large homes in exclusive neighborhoods
- Buy expensive products, patronize fancy shops
- Upper-middle class
- 11% of the total population
- Successful business and professional people
- Well-educated, have a strong desire for success, and push their children to do well
- Buy products that signify status, belong to private clubs, and support the arts and various social causes
- Lower-middle class
- 36% of the population
- Strive for respectability, are future oriented, and are willing to take risks
- Have well-cared-for homes, save money to send their children to college, and buy products that are popular
- Upper-lower class
- 38% of the population
- Clerical and blue-collar working class
- Tied closely to family for support, have a local orientation, clearly defined male-female roles, and are concerned about security
- Live in smaller homes, drive larger cars, watch bigger television sets, and buy American products
- Lower-lower class
- 13% of the population
- Unskilled workers, the chronically unemployed, unassimilated immigrants, and people on welfare
- Poorly educated, live in substandard housing, have low income
Social networks are made of individuals which are linked by friendship, relationships, or common interests. Today, these networks may be Internet-based and include individuals that the consumer has never met in person.
Psychological factors that influence consumer buying decisions include:
- Motivation: the result of a need sufficiently stimulated so that an individual is moved to seek satisfaction.
- Perception: a process of coloring and processing information from the environment through our five senses. Perception plays a major role in the stage of the buying-decision process that involves identifying alternatives. The nature of perception requires marketers to keep their messages simple, repeat them often, and conduct research to see if the messages have been received and interpreted as intended.
- Learning: changes in behavior resulting from previous experiences. Learning plays a part in every stage of the buying process. Marketers use several strategies designed to fit the way people learn, including:
- Repetition, in which marketing messages are spread over time
- Family branding—an example of stimulus generalization in which different products are offered under the same brand name (Courtyard by Marriott, Residence Inn by Marriott, Marriott Marquis, etc.)
Values, beliefs, and attitudes
- Values are enduring beliefs that a specific mode of conduct is personally or socially preferable to another mode of conduct. Customers with similar value systems tend to react alike to prices and other marketing-related inducements.
- Beliefs are organized patterns of knowledge that an individual holds as true about his or her world. Consumers tend to develop a set of beliefs about a product’s attributes and then, through these beliefs, form a brand image—a set of beliefs about a particular brand.
- Attitudes are learned predispositions to respond to an object or class of objects in a consistently favorable or unfavorable way. Attitudes do not always predict purchase behavior, but they play a major role in the evaluation of alternatives.
- Personality is a way of organizing and grouping the consistencies of an individual’s reactions to situations.
- Self-concept is how a consumer perceives himself or herself in terms of attitudes, perceptions, beliefs, and self-evaluations. For example, a consumer who perceives himself as extremely religious may make purchase decisions based on this perceived religiousness.
- Lifestyle is a person’s mode of living as identified by activities, interests, and opinions. Psychographics is the analysis technique used to examine consumer lifestyles and to categorize consumers.
- Psychographics have proved valuable in segmenting and targeting consumers.
Transcript: Types of Hospitality Consumers
This presentation reviews categories of business and leisure travelers, an important factor in creating a best-fit marketing strategy.
Types of Hospitality Consumers
There are two main types of hospitality consumers: business travelers and leisure travelers. Hospitality companies need to understand these separate groups to analyze whether a high percentage of their customers fit into one or the other of the profiles. Understanding these groups help companies meet these groups’ needs more effectively, or reach out to new ones. The most important lesson is “Know thy customer.”
A Profile of Business Travelers
Without the constant and steady income from the business travel market, hotels, airlines, and car rental companies would have difficulty effectively utilizing their inventory. For many segments of the hospitality industry, this is their bread and butter, and serving their needs effectively is vital.
In general the business traveler:
- Wants “an office away from the office”
- Is looking for enhanced productivity from both the trip and the time spent on the trip
- Thinks technology like telecommuting, web conferencing, online meetings, and videoconferencing will reduce business travel in the future
- Prefers full-service hotels, airlines, and car rental companies with moderate prices
- Tries to negotiate best rates.
Business Traveler Preferences
Business travelers have also shown several factors that influence their buying habits:
- They tend to prefer hotels and airlines that suggest a high degree of prestige.
- They are more likely to avoid bargain-basement lodging and low cost carriers when they can.
- They like well-known brand names.
And their previous experience with the hospitality product is also important, including the elements of
- Recommendations of friends/associates
Befitting their status, senior executives will generally expect to stay in luxury or upscale hotels with high levels of service, as well as utilize first-class airline service and other high-end hospitality services, while traveling. On the other hand, salespeople may stay in mid-scale or even budget hotels and utilize low-cost carriers.
Whereas business travelers often make up the bulk of a hotel’s midweek business, leisure and tourist travelers fill the rooms on weekends. Leisure travelers come in four types but there may be some overlap among these groups:
- Package travelers
- Mature travelers
- International travelers
- Free independent travelers
Package consumers purchase a combination of rooms and amenities for an inclusive price.
The advantages of packages include:
- Low price
- The bundling of services that are not normally purchased, such as guided itineraries
- The fact that everything is pre-planned and pre-arranged
Usually over 55 years of age, mature travelers are a force simply because of the sheer numbers of them on the road. They tend to travel extensively, sometimes favoring travel parties or tours. Unlike other classifications, the mature traveler is not a homogeneous group. And finally, they are a group of consumers looking for value in their purchases.
400 million people travel outside their home country every year, and international travelers account for 25% of the annual tourist spending in the U.S. As a group they tend to use intermediaries in their planning, such as consortiums, referral networks, and tour operators.
Free Independent Travelers
Free independent travelers are best characterized as younger travelers or those with more travel experience, who do their own planning and make up their own itineraries.
It is important to understand that these categories can overlap, and that different cross sections of people and groups require different marketing strategies to serve them effectively.
Three Examples of Word-of-Mouth Strategies
Your social environment frequently provides information about products to you through word-of-mouth. In conversations with family, friends, and acquaintances, you share opinions about companies, services, and experiences with purchases.
Companies sometimes use word-of-mouth strategies as well as conventional marketing to get their message to potential customers. On the Internet, these word-of-mouth strategies are known as viral marketing. Viral marketing is a strategy that encourages individuals to forward a message to others. If such a campaign catches on, the message could be sent to thousands or millions of people. In his article, “The Six Simple Principles of Viral Marketing,” published on Web Marketing Today in February 2005, Dr. Ralph F. Wilson notes that a successful viral marketing campaign will contain the following elements:
- Gives away products or services – Nothing attracts attention like “FREE.”
- Provides for effortless transfer to others – Keep the marketing message short and simple so that it can be readily transmitted to others without degradation.
- Scales easily from small to very large – Be prepared to rapidly add mailservers as the virus spreads.
- Exploits common motivations and behaviors – Provide a motivation for individuals to forward your message to others.
- Utilizes existing communication networks – Position your message into existing communications between people.
- Takes advantage of others’ resources – Create an inventive message that will be picked up on others websites, blogs, podcasts, news articles, etc.
Remember, though, that no word-of-mouth campaign is guaranteed to be successful. The public will decide!
Try to brainstorm and write down three examples of effective word-of-mouth strategies you have seen. For each strategy you have seen, also note:
- The situation in which you heard it
- What market segment you believe was being targeted
- Why you believe it was effective
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