CRT LEARNING MODULE

Course Code THM07

Course Title Tourism and Hospitality Marketing
Units 3
Module Title Tourism and Consumer Behavior

Date Developed: Document No. 001-2020

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 College for Research & Technology of Cabanatuan

HOW TO USE THIS DIGITIZED LEARNING MODULE

Welcome to the module in Tourism and Consumer Behavior. This module
contains training materials and activities for you to complete this module. This module
also covers the factors that influence tourist consumer behavior, the buyer decision –
making process and the customer satisfaction through service quality.

You are required to go through a series of learning activities in order to complete

each learning outcome of the module. Each of the learning outcomes is provided with
Modules. Follow these activities on your own and answer the self-check at the end of
each learning outcome. You may remove a blank answer sheet at the end of each
module (or get the answer sheets from the online facilitator) to write the answers for
each self-check. If you have questions, don’t hesitate to ask your facilitator for
assistance.

This module was prepared to help you gain fundamentals and basic knowledge
about Tourism and Hospitality Marketing. This will be the source of Information for you
to acquire knowledge and skill in this particular trade independently and at your own
pace, with minimum supervision of help from your instructor.

 Talk to your online facilitator and agree on how you will both organize the
Training of this unit. Read each through the module carefully. It is divided into
sections, which cover all the skills and knowledge you need to successfully
complete this module.
 Work through all the information and complete the activities in each section.
Read Modules and complete self-check. Suggested references are included to
supplement the materials provided in this module.
 Most probably your facilitator will be your supervisor or manager. Your online
facilitator will support and correct you.
 Your online facilitator will tell you about the important things you need consider
when you are completing activities and it is important that you listen and take
notes.
 You will be given plenty of opportunity to ask questions and practice on the job.
Make sure you practice new skills during regular work shifts. This way you will
improve both your speed and memory and also your confidence.
 Talk to more experienced workmates and ask for their guidance.
 Kindly the self-check questions at the LMS (EDMODO) to test your own progress.
 When you are ready, ask your online facilitator to watch you online via Zoom or
Google Meet to perform the activities outlined in this module.
 Ask your online facilitator work through the activities: ask for written feedback
on your progress. Your online facilitator keeps feedback/pre-assessment reports

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 for this reason. When you have successfully completed each element, ask the
facilitator to mark on the reports that you are ready for assessment.
 When you have completed this module, and feel confident that you have
sufficient practice, your online facilitator will arrange an appointment with
registered assessor’s to assess you. The results of your assessment will be
recorded in your competency Achievement Record.

Date Developed: Document No. 001-2020

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 MODULE CONTENT

MODULE TITLE: Tourism and Consumer Behavior

MODULE DESCRIPTOR: This module also covers the factors that influence
tourist consumer behavior, the buyer decision –making process and the customer
satisfaction through service quality and also the benefits of service quality in tourism
and hospitality industry.

NUMBER OF HOURS: 3 hours (1 week)

LEARNING OUTCOMES:
At the end of the module, you MUST be able to:

1. Define what a market is.

2. State the three steps to target marketing.
3. Identify the characteristics of a good market segment.
4. Distinguish the new and emerging markets in the Philippines

Contents:

1. Definition of a market
2. Market Segmentation
3. Market Targeting
4. Market Positioning
5. New and Emerging Markets

Conditions:

The students must be provided with the following:

1. Hard copy or soft copy of the course syllabus
2. MS Word
3. Pen
4. Paper

Assessment Method:

1. Submission of Research paper.

2. Written examination.
3. Quizzes using Google forms.

Date Developed: Document No. 001-2020

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Marketing Module 3: Issued by:
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 MODULE 3
Tourism and Consumer Behavior
Learning Objective: After reading this MODULE, you should be able to:

1. Define what a market is.

2. State the three steps to target marketing.
3. Identify the characteristics of a good market segment.
4. Distinguish the new and emerging markets in the Philippines

INTRODUCTION
Consumer behavior is the process and activities people engage in when
searching for, selecting, purchasing, using, evaluating, and disposing products and
services to satisfy their needs and desires (Belch & Belch 2008). Purchase decisions,
especially for tourism products are usually arrived at after a long and detailed process
of information search, brand comparisons, and evaluation. Tourism products are too
expensive to be bought on impulse. Thus, a careful examination of choices is made
before an actual purchase happens. We will learn in this chapter that there are many
factors that influence consumer behavior, and purchase is often not just attributed to
the price of the product.

FACTORS THAT INFLUENCE CONSUMER BEHAVIOR

Tourism marketing scholars identify key factors that have an influence over
consumer behavior, as follows: (1) motivations, (2) culture, (3) age and gender, (4)
social class, (5) life style, (6) life cycle, (7) reference groups, and (8) personality and
self-concept.

Motivations
Motivations are inner drives that make people take a specific plan of action to satisfy
the needs. Hudson (2008) defines needs as the gap between what customers have and
what the

Would like to have; seen as the force that arouses motivation. Kotler et al.
(2010) state the a need becomes a motive when it is aroused to a sufficient level of
intensity that prompt person to take action. A person who has the ability to understand
how motivation works will have the ability to gain competitive advantage. If one is able
to identify what triggers purchase, he can actual create the scenario to influence the
purchase.
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 Maslow's Hierarchy of Needs is the most popular theory of motivation as it is able
to outline the different needs of man, and rank them based on degree of importance in
a simple and easy to understand manner. These motivations are as follows:
physiological safety, belongingness, esteem/status, and self-actualization. Physiological
needs refer to basic needs for survival such as need for food and water. Safety refers to
personal and perceived degree of safety and security, Belongingness refers to
acceptance in social groups. Esteem/status refers to desire for prestige and status. Self-
actualization refers to the goal of self-fulfillment. Since needs are prioritized due to
limited resources, Maslow ranked them based on their level of importance. The more
resources one has, the higher the likelihood that the higher order needs will be met.
Travel and tourism, for a great part, belong to the higher order needs.

Dann (1977) describes travel motivators as linked with Maslow's hierarchy of

needs. He states that there are two factors that make you want to travel: push and pull
factors. The push factors are those that make you want to travel while the pull factors
are those that affect where you would want to go. Further, Crompton (1979) identifies
nine motives which are divided into push and pull factors. The push motives are what
he calls the socio psychological factors while the pull factors are classified as cultural
motives.

Futthet, Krippendorf (1987) elucidates that travel is motivated by a poing away

from" rather than "going toward" something. Also, traveler's motives and behavior are
mostly for self-gain.

The traveler's motives and behaviors are self-oriented. Krippendorf

classifies these ones into eight explanations of travel which are:

1. recuperation and regeneration

2. compensation and social integration,
3. escape,
4. communication
5. freedom and self-determination
6. self-realization:

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 7. happiness, and
8. broadening of the mind

Culture
The impact of culture cannot be disregarded in the study of consumer behavior.
Researchers have looked into how culture has affected consumer behavior. Social
scientist Geert Hofstede helps explain how culture impacts the global marketing arena
through his research work. The cultural framework of Hofstede can be used to explain
the differences in consumer behavior across countries, and can be a guide in increasing
efficiency in global marketing Hofstede discloses the five dimensions of culture, as
follows (1) power distance, ) individualism/collectivism, (3) masculinity and
femininity (4) uncertainty avoidance, and (5) long term and short-term
orientation. A sixth dimension was recently added, that is, indulgence versus
restraint.

Hofstede, in his website (www.geert-hofstede.com), defines culture as the collective

mental programming of the human mind which distinguishes one group of people from
another. This kind of programming influences patterns of thinking which are reflected in
the meaning people attach to various aspects of life and which become crystallized in
the institutions of a society, in the same website, scores of different countries can be
found.

Scores signify the extent or degree by which a country exhibits the different
characteristics of the culture. This is an interesting source of information when
designing marketing packages for specific countries, which can also be compared with
that of the Philippines' scores.

Knowing cultural differences among the countries that the Philippines wants to tap
as a market for tourism will help in enabling marketers to develop effective products
and services as well as strategies Hofstede's cultural framework can be used as a guide
to determine different aspects of culture such as power distance, individualism,
masculinity, uncertainty, pragmatism, and indulgence.

Age and Gender

Age pertains to the number of years a person has been living Age is a traditional
way of segmenting the market and also greatly influences consumer behavior. Likes
and preferences of consumers are normally dependent on their ages. Travel packages
are normally tailor-fit depending on the generation of the target market.

Gender, on the other hand, also influences consumer behavior. The female
market is steadily increasing and has been observed to be more discriminating than its
male counter parts. The gay market is also being seen by marketers as having a set of
preferences different from the male and female markets

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Social Class
The socio-economic status of individuals is still being considered as one of the
most important external factors influencing consumer behavior (Hudson 2008). Social
class is one's position within the society and is determined by factors such as income,
wealth, education, Occupation, family prestige, and value of home or neighborhood
(Kotler et al. 2010). Social class has commonly been referred to in the Philippines
through letters-A, B, C, D, E. Sometimes, the market is clustered into Class AB or CDE
market or ABC and DE markets It has been observed that those with higher income
tend to travel more. Also, those families who have higher income are better educated,
hence, they have higher income possibilities Travel products and services are mostly
designed for the elite Class AB market. However, the presence of low cost earners, for
instance, creates travel opportunities for the lower class markets.

Lifestyle
A lifestyle is a person's pattern of living as expressed in one's activities,
interests, and opinions (Kotler et al. 2010). It portrays the whole person interacting
with external forces Lifestyles are by no means universal since it also interacts with
culture, economic situation, and personality. Marketers are in search of relationships
between their products and people lifestyles. Starbucks in the Philippines became a
huge success because there was a good fit between the product and the Filipino
lifestyle-the Filipinos love to talk over a cup of coffee. Notice how coffee shops in the
Philippines have proliferated with comfortable lounge chairs and a cozy ambiance.
Despite the sometimes outrageously expensive coffee, it is the brand image and the
Filipinos communicative behavior that have made these coffee shops tick.

Life Cycle
The family life cycle model (Pearce 1993) suggests that travel patterns and
destinations differ as people move on through the life cycle. Life cycle refers to the
stages an individual goes through in their lifetime. Single people choose destinations
that have fun and adventure more than those who are married and have young
children. Being married and with a four-year-old son, our choice of destination have
shifted to places with theme parks, child-friendly accommodations, and familiar food
choices. Preferences and activities of the other stages of the life cycle may vary; thus,
influencing consumer and purchase behavior.

Reference Groups
Reference groups are known to be a set of people who have a direct or
indirect influence on other people's attitudes or behavior. These people can be a
member of your family, a teacher or a classmate in school, a boss or a colleague in
your workplace, or your priest or pastor in the church. This has also been extended to
other experienced travelers and food experts through their blogs. We do not personally

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know them but are viewed as highly credible because of their experience and expertise
Reference groups are extremely important in selling tourism products because the
product is intangible, hence, word of mouth plays an important trigger for purchase
decisions.

Personality and Self-concept

Personality refers to distinguishing psychological characteristics that lead to
relatively consistent and enduring responses to the environment. This has great
influence over one's buying behavior. A consumer's self concept refers to his
personal mental picture (Kotler et al. 2010). Consumers tend to go for product brands
that reflect the personality People who are friendly and outgoing would likely be found
in restaurants that project a friendly and outgoing image. Introvert people would likely
meet up with a friend in quaint restaurants, and not in bars or clubs.

Personality and self-concept may affect an individual's choice of recreational

activities while on tour. It also affects the choice of accommodations and restaurants
that people choose when they travel.

These factors will resurface in the next chapter since they are also variables and
factors that are considered for market segmentation. This proves that personal,
cultural, social, and psychological factors that affect consumer behavior are also factors
that marketers use to group different types of individuals. For effective marketing to
happen, a thorough understanding of one's market is a must.

THE BUYER DECISION-MAKING PROCESS

In Chapter 1, we discussed how tourism products fall under high involvement
products, In high involvement products, stages in the buyer decision-making process
are more defined and could easily be identified. Decision making is made after a
thorough evaluation of alter natives because the products are expensive, complex, and
possibly unrepeatable. Figure 3.4 shows the stages of the buyer decision-making
process.

Need Recognition
Have you ever wondered why the streets of Metro Manila are filled with vendors
of all types’ cigarettes, bottled water, candies, etc.? The more traffic there is the better
business they have. Marketers need to find out what people's needs are, and they
should be there during the times these people need them.

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 Needs are triggered either by internal or external stimuli. For example, on your
way home, you felt hungry as your stomach grumbled. You see a restaurant and
grabbed a quick bite. This was a need triggered by internal stimuli. Another example,
again on your way home, you smell the aroma of freshly cooked bread as you passed
by the bakeshop. It smelled really good so you decided to enter and buy a piece of
bread. The purchase was triggered by external stimuli

Promotional strategies are creatively developed to make people think that they
need our products. Successful business owners are those that have thought to satisfy a
need even before consumers have articulated such a need. When coffee shops became
successful in the Philippines, entrepreneurs started asking themselves, what about
those who do not drink coffee Hence, the birth of milk tea shop.

Information Search
Once a consumer recognizes a specific need, he may or may not be prompted to
search for more information. The eagerness for more information will depend on the
strength of the desire, information that the person may already have, and the
satisfaction he may get from the additional information he gains.

Information may be obtained through personal and commercial sources and the
internet. Personal sources include asking family, friends, and acquaintances about their
knowledge and experience about the products or services you need. Commercial
sources include advertisements, samples, brochures, sales agents, displays, and
signage’s that you have seen. Personal sources are more likely to be credible than
commercial sources since the personal sources may come from reference groups and
people whom you trust. The Internet offers a rich source of information; these may
come from the company's website, blogs of previous guests, consumer review sites,
etc. Since tourism products are intangible, it is important to obtain information from
people who have already availed of the products or services. Positive word of mouth
plays a very important role in the information search.

Crotts (2000) classifies information into two: internal and external information
search Internal Information Search is nothing more than retrieving decision
relevant information stored in an individual's long-term memory. These may be caused
by low involvement stimuli such as exposure to ads or by prior experience with the
destination that is not available to first-time visitors. External Information Research
focuses on acquiring information from outside or external sources. These may come in
the following forms (1) personal advice from friends), (2) marketer dominated
(brochures and ads), (3) neutral (travel clubs and agents), (4) experiential
sources, and (5) the Internet.

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 Marketers need to know how their clients came to know about their products and
services so that they can prepare a more effective means of communicating with their
target market. Tivo's Restaurant by Chef and Brewer, which is located in Marikina,
attributes most of its success to positive word of mouth of their clients. By merely
having a good product and ensuring that customers leave highly satisfied, their
restaurant successfully celebrated their second anniversary without spending much on
advertising.

Evaluation of Alternatives
This stage allows prospective customers to make detailed comparisons of
different product or service providers since they already have sufficient information
Based on the resources which are available to them at the time of purchase, they are
close to making a decision on which product or service to buy. Resources may include
time, money, brand image, availability of flights, and convenience of making the
purchase. For example, if you are planning a trip to Singapore, you will have to
compare the surface costs of several airlines such as Cebu Pacific, Philippine Airlines, Air
Asia, and Jet Star. You will also consider the schedule of thighs because if you want to
maximize your trip, you should prefer to leave Manila in an early morning flight and
depart Singapore in an evening flight. As for brand image, all are low-cost carriers
except for PAL, so it will not be a significant factor in your decision making. Other thing
to consider would be the availability of flights on your preferred schedule and the
convenience of purchasing the tickets online.

Purchase Decision
This is the stage most awaited by tourism marketers. This is when consumers
actually make the purchase decision. At this stage, marketers should facilitate the speed
and convenience by which the products or services reach the consumers. Distribution
networks should be made available and access to the products easy and fast.

In one staycation my family had within the city, we were craving for hotcakes, so
we decided to order delivery from a popular fast-food chain. The one number delivery
system of most fast food chains helps make access to their food items easy, However, I
was informed by the agent that since my order was diverted to another branch
(because the nearest branch to us was still closed) it will take one hour for the orders
to arrive. I was surprised at the length of time it will take for the order to be delivered.
Hence, I decided to cancel my order and call another fast-food chain instead. In a
matter of minutes (less than the 30-minute delivery lead time the agent told me), my
order arrived at the door of our 33 floor condominium unit. Since I have made the
decision to buy hotcakes, my choice of supplier depended on how easily I could get
them from my chosen supplier. Regardless of how good a product is if it is hard for
clients to avail of it, they will most likely switch brands.

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Post-purchase Evaluation
It is extremely important for product and service providers to ensure that
customers have a good experience with the product. This will facilitate positive word of
mouth. Customer satisfaction can have different degrees, as follows: extremely
satisfied, satisfied, neutral, dissatisfied, and extremely dissatisfied. Tourists have pre-
departure expectations which are compared to their post-visit experience. To gain
positive word of mouth, clients need to be satisfied at the very least. Actions for revisit
and recommendations to friends would be prompted by extreme satisfaction.
Conversely, extremely dissatisfied customers may pass on negative word of mouth, and
are the ones most likely to complain. In short, customer satisfaction has a positive
correlation with word of mouth. The more satisfied customers are, the more likely they
are to spread good things about the product or service. They are also more likely to
repeat purchase and recommend the product or service to their friends (Ziethaml et al.
1996).

Kotler (2000) defines satisfaction as a person's feelings of pleasure or

disappointment resulting from comparing a product's perceived performance in relation
to his expectations. In tourism, it is generally known that high quality service would
result in tourist satisfaction, creating positive word of mouth leading to repeat visits
(Som & Badarneh 2011).

CUSTOMER SATISFACTION THROUGH SERVICE

QUALITY
Marketers can be creative in reducing consumer post-purchase dissatisfaction by
keeping in touch even after the sale has been made and knowing how to address
customer complaints.

A thank-you letter, a small token/gift/souvenir, and a feedback form soliciting

suggestions for improvement can help make customers feel good about their purchase.

Service quality as defined in businessdictionary.com is an assessment of how

well a delivered service conforms to the client's expectations. Service business
operators often assess the service quality provided to their customers in order to
improve their service, to quickly identify problems, and to better assess client
satisfaction.

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Benefits of Service Quality
Kotler et al. (2010) elucidate some benefits of service quality:

1. Customer Retention. Service quality helps build loyalty among customers and
makes these customers speak positively about the service provider.

2. Avoidance of Price Competition. Providing high quality service helps in

maximizing potential revenue and veers the company away from a price war.

3. Retention of Good Employees. When an operation is well run and produces high
quality products, recruitment, training, and retention of employees are easy.

4. Reduction of Costs. Costs are minimized if there are repeat customers, absence of
a price war, and low turnover rate of employees.

ORGANIZATIONAL BUYER BEHAVIOR

The organizational buying process is a more formal version of the consumer
buying process discussed earlier in the chapter. Organizations are more complex
because more people are involved in the decision-making process, and there is greater
demand for a variety of products and services Organizations buy in bulk for group
consumption while consumers usually purchase in retail for personal consumption.
Hence, marketers give importance to understanding buyer behavior of organizations
primarily because they generate big time sales and revenues.

Organizational buyers commonly respond to both economic and personal factors

(Kotler et al. 2010). Major influencers of purchase would include cost and economic
outlook, organization's objectives and personal agenda, interpersonal factors at play
between buyers and sellers, and personal motivations, perceptions, and preferences.

The purchase decision process in organizations is more complex than that of individual
purchases. Kotler et al. (2010) describe the process as follows:

1. problem recognition
2. general need specification
3. product specification
4. supplier search
5. proposal solicitation
6. supplier selection
7. order routine specification
8. performance review

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 Groups are the most lucrative markets. A good mix of groups and individuals in the
customer mix is ideal. Groups give big accounts but average room rate (ARR) and
average cost per cover (ACO is low, while individuals give you higher ARR and ACC. The
group market includes meetings, incentive travel, conventions, events, and werf (social,
military, educational, religious, and fraternal organizations)

TYPOLOGY OF TOURISTS
Plog's Tourist Motivation Model

Plog's Tourist Motivation Model (1974) classifies travelers as allocentrics or

psychocentrics. Plog adds "energy" as determinant of (high or low) levels of activity.
Allocentrics prefer what is new, unstructured, exotic or unusual in terms of trips or
destination choice. Psychocentrics ate those who prefer the structured and familiar.

Later on, it was realized that there exists midcentrism wherein a tourist could
portray characteristics of both allocentrics and psychocentrics depending on the
situation or season A critique of this model was made by Gilbert (1991) when he stated
that tourists travel with different motivations on different occasions.

These show that travelers have preferences which help group them into
segments and later on, assist in identifying the products and services suited to the
specific demand.

Cohen's Model
Cohen (1972) proposed four classifications of tourists: the organized mass
tourist, the individual mass tourist, the explorer, and the drifter. The organized mass
tourist is the type of tourist who buys all-inclusive tour packages and ensures that
everything goes as planned. The individual mass tourist test is more autonomous
than the organized mass tourist preferring to travel independently, but still chooses
popular destinations and activities. The explorer seeks new areas but would sometimes
opt for the comfort of familiar accommodations. The drifter is the free spirit who avoids
any kind of traditional tourist establishments.

Stewart's Model of Holiday taking

This model was based on a study of United Kingdom holiday makers conducted
by the Henley Centre by Stewart in 1993. The model is built on the concept that as
people become more affluent, they tend to travel more and the travel experience is
cumulative. They also tend to be more adventurous and confident as their level of
affluence and travel experience increases Stewart distinguishes the following four
phases of holiday taking.
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 1. Bubble travelers - have low affluence, low travel experience, and observe
foreign culture from a bubble. This gives them basic confidence to travel.

2. Idealized-expense seekers-have more affluence and a base of overseas

travel experience, which gives them more confidence.

3. Wide-horizon travelers - have more affluence, greater confidence, and more

travel experience, now ready for more individually oriented travel to a wide
range of destinations.

4. Total immersers - do not seek to merely observe but to be exposed fully to

another culture's language, food, heritage, and lifestyle.

Other models have proposed different ways of understanding tourist behavior A care
ful understanding of the needs, wants, and preferences of our target consumers will
help us create products and services that are relevant to them. Once these products
and services are relevant to them, pleasing the customer would not be a difficult task.

The Non-Users
Successful marketing efforts should cover the different segments of the market.
While relationship marketing, which focuses on customer retention, has become a
popular marketing alternative, marketers should continue to make efforts to acquire
new customers. The best way to do this would be to target the non-users. Non-users
can be classified as: (1) ex-users who stopped using the products/services for various
reasons, (2) customers who are aware of the product or service but need to be
persuaded to purchase, and (3) those who are not aware of the product or service's
existence. Though research shows it is more expensive to acquire new customers, a
company needs to have a steady flow of new customers for it to survive and eventually
flourish.

Understanding the consumer's needs and buying process is the foundation of

successful marketing (Hudson 1999). Different types of tourists have different needs.
Understanding that there are different types of tourists can help marketers
communicate with each type mote effectively and with greater impact.

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