Consumer Behavior and Decision-Making
Background on Consumer Behaviors and
Consumer Decision-Making Process
The hospitality industry is one of the leading
economical sectors of the world. This can be
attributed to the fact that this industry has a
viable environment for career building and
development of individuals, women included.
The estimated value of the hospitality industry is
$4 trillion in the world distributed to over fifteen
different sectors that include hotels, tours and
travel, bars and restaurants, casinos and cruise
ships (Raymond, 2009). This accounts for
around 10.7% of the worlds GDP.
The industry has also created employment
opportunities to around 225 million people in the
world. As a result of the viability of this industry,
several scholars have undertaken massive
research in this sector. Notably, quite a good
number of these scholars have focused on the
consumer decision-making process as a key
topic of research. In their studies, they have tried
to explain the factors that influence the decision
making process of a consumer while he/she is
trying to gain maximum satisfaction from the
industry.
To gain relevant information with regards to this
topic, several consumer decision-making
models have been used in these studies. These
models have not only ensured that the results
from these studies are valid but they have also
acted as guidelines to these studies.
The focus on the process of decision-making in
consumers has gained a lot of recognition in
several studies that have been carried out in the
recent past. Most studies in the field of consumer
science have undertaken research in either
consumer behavior or consumer decision-
making process (Erasmus et al, 2001).
Consumer decision-making has been defined as
a set of pattern in behavior exhibited by
individual consumers just before they make a
decision to acquire either goods or services that
would satisfy their own wants and needs (Du
Plessis et al, 1991). Early economists developed
theories that were used to determine how
consumers made decisions and the factors that
would influence these decisions.
Through their evolution, these theories
developed to what we currently refer as
consumer decision-making models. These
models are currently being used by researchers
to specify the variables that are interrelated in
decision-making process of an individual.
Models are also defined as systematic flow
charts used to interpret behavioral processes of
an economic agent when making decisions (Du
Plessis et al, 1991).
Consumer behavior in the hotel and hospitality
industry mainly focuses on behaviors exhibited
by their consumers. Due to the diversity of this
industry, the nature and characteristics of
consumers are varied. The tastes and preferences
of a consumer who is visiting a restaurant is
completely different from that of another
consumer who wants to enjoy his/her vacation in
a tourist resort.
Models have been used by marketers in this
industry to provide an easier method of
understanding different consumer needs and the
factors that influence their decision-making
process. These models have also been used by
researchers in coming up with various theories
in hospitality management. Through use of
consumer decision-making models, hotel
managers have been able to predict the number
of customers expected during different periods
of the year.
The idea of the peak season and low season in
the hospitality industry originated from
observation of consumer behavior over a given
period of time. As a result of this observation,
hotel managers came to realize that consumers
had a tendency to flock into their hotels during
certain times of the year.
This time was identified as the peak season. It
was only by studying consumer behaviors that
the hospitality industry was able to identify
between the peak and low season of activity. On
the same note, restaurant managers have also
understood the flow of their clients during the
different times of the day and days of the week.
They normally expect high numbers of
customers during breakfast, lunch and dinner
times. Families are also expected to flock during
dinner and in the weekends (Middleton, 2004).
As a result of understanding this flow, these
managers are able to provide high quality
services to satisfy the needs of their customers.
This is one of the leading ways to retain
customers and attract new ones (Middleton,
2004).
The discipline of consumer behavior and
consumer decision-making process mainly
developed in the 1960s (Du Plessis et al, 1991).
Some of the models used today in the hospitality
industry and other disciplines were developed as
early as 1963 (Du Plessis et al, 1991). In his
paper, Consumer Decision-Making Models,
Strategies and Theories, Richarme (2005)
asserted that the earliest decision-making model
was developed by an economist named Nicholas
Bernoulli.
This model was later advanced by Neumann and
Morgenstern who gave it the name, The Utility
Theory (Richarme, 2005). The utility theory has
widely been used in the hospitality industry.
Most managers and personnel in the hospitality
industry assume that the consumer is rational
individual.
They therefore want to maximize their
satisfaction given the available alternatives that
they have. Assuming a rational consumer, a
hotel manager for example expects most
consumers to visit their hotels during the peak
season. Despite its use, the utility theory has
weaknesses. These weaknesses will be
expounded in details in this paper.
Herbert Simon advanced a simpler model that
explained consumer behaviors in mid 1950s
(Richarme, 2005). The theory was known as
satisfying theory. In this model, Hebert proposed
that once a consumer got what he wanted then
the decision-making process came to an end. For
example, a tourist looking for a hotel or a resort
to spend his or her vacation would undertake a
research on all available resorts or hotels at his
preferred destination.
Once he finds the hotel or resort that pleases
him, he stops the process of decision-making.
According to Herberts model, such a consumer
has obtained a service with the highest score
since it satisfies his/her needs (Richarme, 2005).
With regards to these models, this paper will
discuss the process of decision-making in
consumers with a focus on the hospitality
industry. It will expound on two decision-
making models and their application in the
hospitality industry.
Rational Consumer Theory
The utility theory assumes a rational consumer
is making the decisions. To predict human
behavior, economists have to assume that a
consumer is rational. A rational consumer has a
set of characteristics that distinguished him/her
from other consumers.
When faced with a decision between two similar
commodities, a rational consumer will always
choose the commodity that yields maximum
satisfaction to him. A rational consumer
therefore adheres to the axiom of selection
where he/she will select a combination of goods
that reflect his tastes and prefer. Using the
hospitality industry as an example, if a consumer
prefers resort A to resort B and incidentally he
prefers resort B to resort C then by transitivity,
he prefers resort A over C (Mudida, 2003).
Another assumption to this theory is that a
consumer has a hierarchy of needs. For instance,
when faced with a decision between two hotels
or bars, a consumer will have a set of rules in
most cases that he/she uses to rank variables.
Imagine a case where a customer is has three
variables used to rank a restaurant; the cost of
the hotel, quality of the service, and the size of
the rooms. Different consumers would rank
these variables differently.
This ranking will be according to their hierarchy
of needs. A consumer might decide that it is the
cost that matters first while another consumer
might decide that it is the quality of the service
that matters first. In simple terms, these
consumers are ranking the variables according
to their preferences. The utility theory proposed
stages involved in decision-making process
undertaken by a consumer. These stages include:
Problem Recognition:
In this stage, the purchasing process is
beginning. It was proposed that the purchasing
process started when the buyer recognized the
need or encountered a problem (Matsuno, 1997).
It is common sense that the need to acquire
something may arise due desire or a problem.
For example, when a consumer needs to use
services in the hospitality industry, he/she has to
first identify the services they need. The process
of identifying services needed is called problem
recognition.
Information Search:
After recognizing a problem, there is need to
look for information pertaining to the problem at
hand. For example, in our case, once the
consumer has identified the service he requires
he starts the search. Assuming the consumer
needed a vacation destination, he would start to
seek information about the available
destinations in the United Kingdom. This
process of looking for information is what has
been defined as information search.
Evaluation and Selection:
This stage analyzes how the consumer processes
decisions between competitive brands. After
gaining information on various destinations
available, a consumer has the task of deciding
which destination would best suit his or her
needs. The consumer has to evaluate his options
in a manner that will lead to him o satisfying his
needs.
This process is highly variable among
consumers since each consumer has personal
preference and tastes. The process is also based
on personal judgment, the degree of importance
attached to the need of a consumer, benefits to
be derived from the package and attributes of the
different packages offered.
Decision Implementation:
Once the consumer has evaluated his or her
options, he/she has to implement the evaluation
process by making a decision. After evaluating
the destination options, the consumer finally has
to choose. The process involved in choosing a
suitable destination by a consumer is what is
called decision implementation.
Post Purchase Evaluation:
This is the evaluation that precedes decision-
making involved in purchasing a commodity.
What is relevant in this stage is the degree of
purchase involvement. It determines how widely
a consumer searches for information. From our
example, the degree of time and resources used
when the consumer was researching about the
destination.
Purchase involvement is useful in comparison of
extreme cases in consumer decision-making
process (Matsuno, 1997). Here, the consumer
evaluates the price he spent on the commodity
versus satisfaction that he is gaining from it. He
also investigates the market to see the current
price of the commodity and its alternatives.
By early 1930s, scholars and economists had
been raising questions on the rational consumer
behavior theory. Theorists began to question the
viability of this model. These criticisms came
after it was observed that consumers spend very
little time when engaging in some activities that
involved purchasing.
Consumers are usually involved in some
unconscious behavior during decision-making
process (Bozinoff, 1982). Some of the behaviors
exhibited by consumers are also seen as
opportunistic behaviors despite them appearing
to be highly disorderly when observed. A perfect
example of such a behavior can be observed
when a tourist decides to go on holiday during
the low season to enjoy the low costs. Such a
behavior is opportunistic and does not conform
to the rationality theory.
Usually, opportunistic behaviors drive the
impulse decision-making processes and do not
necessarily coincide with the traditional model
of decision-making mentioned above. It became
obvious that consumers implement decision-
making strategies based on availability of goods
and services (Erasmus et al, 2001).
Some researchers even went to the extent of
suggesting that consumers did not as a rule apply
the analytical decision strategies to optimize the
process of decisions making (Erasmus et al,
2001). The assumption that consumers engage in
rational decision-making while having a
detached emotional state also accounts for the
reason for criticism against the theory of rational
decision-making.
Researchers subjected consumers to various
tests that revealed that the consumers were
aware of their decisions and to some extend had
a degree emotional attachment to the process of
purchasing commodities (Erasmus et al, 2001).
For example, a consumer can choose use to
certain services provided by a given resort or
hotel just because he/she likes the people
providing the service and not because they were
the best.
This shows that to some extend the consumer is
emotionally attached to the consumers were also
involved in cognitive information prior to
making a purchase. Cognitive information
processing was defined as an active planning
method and objective oriented consumer
behavior that encompassed use of intellectual
creativity, while processing the decision
(Erasmus et al, 2001).
A good example such a model is the one that was
advanced by Middleton. This model is known as
the stimulus-response model of buyer behavior
(Middleton, 2004). It explains the consumer
behavior in the tourism industry. This model is
based on four interactive variables. These
variables included the stimulus input,
communication channels, buyer’s characteristic
and decision-making process and purchase
output response. This model has been used
extensively in the hospitality industry to
determine and predict consumer behavior.
The Hierarchy of Effects
This is another model used in economics to
explain the consumer decision-making process.
This model has different sequences according to
different authors. The idea behind this model is
usually simple; people usually experience
different psychological stages before purchasing
product.
This model was coined for the purposes of
explaining how advertising affected consumers
decision-making process when purchasing a
product (Matsuno, 1997). The model generally
looks at the consumer’s learning processes as he
digests information obtained from the external
environment. An example of such model is that
adopted from Delozier in 1976 (Matsuno, 1997).
According to DeLozier (1976), this model has
seven stages. They include:
Unawareness:
In this stage, the consumer is not aware of the
existence of a given brand that is in the market.
The consumer is very oblivious of the existence
of the brand. This has been attributed to the lack
of knowledge and research on the part of the
consumer. This situation may also be attributed
to the newness of a product in the market or lack
of proper advertising on the part of the
manufacturer
Awareness:
In the awareness stage, the consumers’ attention
is brought to the existence of the brand in the
market. This process maybe triggered by the
existence of an external stimulus such as
advertising, information from a friend or even a
message (Matsuno, 1997).
Knowledge:
Once the consumer is aware of existence of a
commodity, he/she has to process this
information. By processing the information, he
is able to gain knowledge about the product.
This enables the consumer to develop an opinion
about the product
Liking:
Once the consumer has gained knowledge,
he/she develops an opinion. This opinion may be
in the form of him or her liking a product or
disliking it altogether.
Preference:
If a consumer likes a product then he/she may
develop preference towards it. This is usually
not the case since other brands exist therefore
preference is considered a relative variable that
has to related to other brands in the market. A
consumer might be able to like a product but in
the same instance, he/she does not prefer it.
Conviction:
Once it has been determined that a consumer
prefers a given commodity, other factors come
into play. Preference is a psychological state of
mind and does not amount to purchasing. A
consumer needs conviction before he/she can
actually buy the brand.
Purchase:
This is the last stage in this model. Once a
consumer has undergone all the above
mentioned stages, he/she completes the decision
process by purchasing the brand.
Usually it is not necessary for all the consumers
to on the same stage since information does not
disperse in a uniform manner. Therefore,
different consumers will be at different stages
depending on when they became aware of the
product.
It is also reasonable to assume that not
everybody in a given stage will necessarily
advance to next stage (Matsuno, 1997). For
example, if consumer A and consumer B have
developed a preference for given services
offered by a resort or hotel, it is not a guarantee
that they will form a conviction to that product.
This model is found to be similar to the
consumer information-processing model for
consumer decision-making. It also has the
assumption that consumers are cognitively
driven, thinking information processors
(Matsuno, 1997). Critics have argued that
knowledge and information are gained
simultaneously (Matsuno, 1997). Others have
argued that liking and preference develop before
cognitive judgment (Farris et al., 1987).
Generalizing the Consumer Decision-Making
Process
Generalization of this process normally requires
a number of rules and guidelines that can be used
to examine the decision making process of a
consumer from different angles and
perspectives. They are not consumer specific
and encompass a variety of platforms that may
be used to investigate consumer behaviors.
These models are often used to formulate,
evaluate and interpret consumer behavior
research.
They may also be used for commodity specific
research. This means that when approaching
research from this point of view and when
choosing a specific consumer decision-making
model, certain assumptions have to be taken into
account. (Erasmus et al, 2001).Generalization of
decision-making process can imply a bias in the
view of consumer decision-making process
(Burns and Gentry, 1990).
Consumer decision-making regarding purchase
should take into consideration factors that
purchases are based on. For example, the
frequency of purchasing and how important that
purchase is to the consumer (Erasmus et al,
2001). The higher the importance of a
commodity the more complex the decision-
making is required. An argument has been that a
consumer’s tastes and preferences are usually
based upon historical experiences.
These experiences are usually not known by a
researcher while carrying out a research. These
attitudes, tastes and preferences are however
exhibited during the consumer’s decision-
making. A consumer usually has no precise
objectives or goals especially in situations where
they purchase a commodity less frequently.
The assumption taken into account in
hierarchical of effort models of consumer
decision-making like the decision of choice is
independent of which alternative to commodity
or that the decision-making is usually a multi-
staged process. These have been found to be in
valid.
Decision-Making Strategies
Consumer decision-making strategies have been
used by marketers in the hospitality industry to
capture the ever-growing customer base in the
United Kingdom. The ability to understand
consumer strategies is a key component in
marketing. It enables marketers to form
strategies that they would use while marketing
their products and introducing new products in
the market.
In the real market situation, consumers are
usually faced with the problem of
incompleteness of information about a brand.
Equally in the hospitality industry, consumers
are usually not faced by ideal conditions (Sirgy
et al, 2000). This means that the consumer does
not posses all the required knowledge about the
hospitality industry to make an informed
decision.
Under such conditions, consumers have resorted
to using decision shortcuts to attain the
commodity they want. A lot of studies that have
been undertaking to determine the process of
decision-making in consumers especially in the
hospitality industry have mainly concentrated
on non-ideal conditions that affect this process
(Erasmus et al, 2001).
Consumers consider the losses experienced due
to poor decision-making are more painful than
the gains obtained when a good decision was
made. There are various strategies used by
consumers in decision-making. These strategies
include:
Compensatory Strategies:
There are two strategies that employ this
method. These are the equal weight strategy and
weighted additive strategy. In these strategies,
consumers allow a commodity of a higher value
of one attribute to compensate for a commodity
with a lesser value of another attribute
(Richarme, 2005). For example, a consumer in a
hotel or resort would allow the value obtained
from good services to compensate for the
smaller accommodation space being offered in
the resort.
Non-Compensatory:
Attribute in this, a product is analyzed on its
own. The consumer does not consider the
attributes of any other product (Richarme,
2005). Even if the product has a high value but
fails in another, it is eliminated altogether. A
good example is where a consumer needs good
food from a hotel and quality services.
In such a case, any hotel that provides less than
the desires of the consumer is eliminated as a
destination. This strategy of consumer decision
making has put the hospitality industry on its
toes. It has ensured that the industry provides the
best services it can to avoid being excluded from
decision making
Lexigraphic:
This strategy involves observing the most
desirable attribute of a product. Incase the
product is clearly superior to all the other
commodities of similar stature, the consumer is
expected to stop the decision-making process
and selects the product (Richarme, 2005).
In the hotel industry this strategy is applicable
when a consumer has clearly identified a given
destination as superior to all he others. In such a
case the consumers will choose such a
destination and stop the decision making
process. This strategy has led to marketers in the
hospitality industry trying to portray their
product as the best to attract more customers
Partially Compensatory:
According to this strategy, the products are
compared against each other in serial fashion.
The higher value attributes in a commodity are
considered first. This general strategy is
composed of two strategies. The first strategy is
known as the Majority of Conforming
Dimensions.
Here, the consumer chooses two competing
products and analyses them with regards to
attributes they posses. After analyzing them, the
product that has the higher values from the
comparison is retained. The retained product is
then compared against the next best competing
product. The product with the higher value
between the two is retained. This process
continues until the consumer finds the most
suitable product then the decision-making
process stops (Richarme, 2005).
The second method of partially compensating
strategy is known as Frequency of Good and
Bad Features. In this method, all the products
that a consumer wants to purchase are compared
simultaneously according to their attributes and
value. The product that supersedes the others in
terms of attributes and value is selected. This
represents the end of a consumer decision-
making process (Richarme, 2005).
There are various decision-making theories
strategies advanced by various authors in
different academic materials. However, the
arguments of these scholars are usually based on
the strategies mentioned above. In the field of
marketing and consumer behavior, there has
been a tendency to investigate the behavior of a
buyer rather than the consumption patterns of
the buyer.
The behavior of the consumer is usually of
importance to the marketing discipline. This will
assist marketers in determining methods they
can employ to sell their products and sell the
required amount of product. It can be seen by
that understanding consumer decision-making
process is important to the hospitality industry.
Therefore, most resorts and hotels have
formulated short questionnaires for their clients
to answer and provide them with information.
This information is analyzed and used to predict
consumer decision making. It also assists
players in the hospitality industry to improve
their service and commodities offered to their
clients.
Conclusion
From this paper, we are able to realize that the
study of consumers’ decision-making process is
still gaining momentum in research fields and
the marketing discipline. Most research fields of
consumer studies are undertaking research in
either consumer behavior or consumer decision-
making process to boost the existing knowledge.
The hospitality industry is also undertaking
extensive research on these decision-making
processes. This paper has also identified the
heavy criticisms that have been advanced
against the rational theory. Despite these
criticisms, the rational model has identified as a
simple model that can easily be understood. It
has also been a viable model in predicting
consumer behavior in the hospitality industry.
All arguments advanced against the rational
consumer theory are based on the fact that the
model operates in a non-standard world and
therefore not all of the consumers’ decision-
making can conform to the stages. However, its
viability in some disciplines and situations has
made it difficult to completely dismiss it. With
these discussions and the use of the available
models, it is thus possible to describe the
consumer behavior and determine his/her
decision making process in the field of
hospitality.
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The Consumer Behavior in Hospitality
Industry
Introduction
The business industry has recorded considerable
growth in the recent past. Businesses in the local
and global scene have expanded, with several
investors being attracted to some common line
of operations.
The increased number of players in the market
for a particular product or service has led to the
current high level of competition in the markets.
In addition, consumers have a wide range of
products and services from which to choose in
order to satisfy their needs.
This has become a major challenge to business
organizations. A business organization that is to
survive in the contemporary market must be able
to identify, understand, and respond to the needs
of clients.
The firms should then develop products and
services that are of high quality to meet the
demands of customers. Nevertheless, the
traditional business strategy of focusing on the
maximization of the returns of the business
organization no longer applies in the current
market.
Despite a firm’s understanding of the needs of
the clients, there is still a challenge in the final
behavior of clients in buying and using the
products and services. A firm may develop
products and services that actually satisfy the
needs of clients; however, other forces may
influence the client who may end up buying and
using alternative products in the market.
The customers often do not behave as predicted
or as expected by the business organizations. For
instance, a market research may show that
customers are in need of a particular product and
would be willing to buy the product if it is
availed in the market.
An organization would then go ahead to avail
much of the product into the market. Now, in
certain instances, the customers may have other
influences like extensive advertisement by a
competitor after the market research. Such
customers may end up buying the newly
advertised product as opposed to the former
product.
The first organization will then incur some
losses due to this shift in attention. As such, apart
from understanding the changing needs of
clients and responding promptly to these needs,
firms should have a thorough understanding of
the buying behavior of the consumers.
Consumer behavior is the study of how
customers (individuals or organizations) decide
to buy a product, select and buy the product, use
the product to satisfy their needs, and eventually
dispose the product, and how this behavior
affects the society (Perner, N.d).
A business organization will often succeed in its
operation through effective customer
satisfaction if it has a good understanding of
buying behaviors of customers. This will enable
organizations to channel their production
towards products and services that meet these
changing needs.
Moreover, this would involve developing
completely new products, performing sales
promotion and advertisements, offering
competitive prices, or increasing the retail
locations of a firm to serve several clients
conveniently.
In general, sales and marketing managers in
business organizations should carry out
extensive researches to understand how
information about a product is conveyed and
processed by clients and eventually, how the
clients make decisions to buy the products.
Several factors have been identified that affect
the buying behavior of consumers. In relation to
the factors, models have been developed that
attempt to explain the likely behavior of
consumers in respect to buying and using a
given product or service.
However, these models have certain
weaknesses. This paper focuses on some of the
models used to explain the buying behavior of
consumers with an insight on some of the
weaknesses of each of the model. These models
are considered in the context of hospitality
industry.
The theoretical concept of Consumer
Behavior
It has been observed that it is very important for
business organizations to consider why a section
of the market consumers can have particular
interests in their products. The firms need to
understand how the clients make decisions on
which products in the market to buy and where
to obtain the products.
Several factors determine consumers’ final
decision to buy a given product, and the firms
have to identify and evaluate these factors.
This is the concern of consumer behavior, which
involves a study of “how individuals, groups and
organizations, select, buy, use, and dispose of
goods, services, ideas, or experiences to satisfy
their needs and the impacts that these processes
have on the consumer and the society” (Perner,
N.d). It is more than mere buying of products
and services.
It is then evident that the concept of consumer
behavior has certain aspects that should be of
interest to the business organization. Firstly, the
consumers here are considered as individuals,
groups of individuals, or as organizations
(Perner, N.d).
The buying behavior towards a given products
can be influenced at these distinct levels. Several
factors that are specific to an individual may
determine his or her decision to buy a given
product. Taste and preference, the financial
status of an individual, the level of education,
information about a particular product or
service, or previous experience are some factors
influencing buyer behavior at an individual
level.
An individual may decide to buy a given product
because he has knowledge and experience of the
quality of the product. The buying behavior can
also be influenced at a group level. The group
with which an individual is associated will affect
the individual’s use of a given product or
service.
Peer group influence generally affects the social
life of an individual and the subsequent products
and services used by the individual. This is
common in the hospitality industry. The social
class so formed will determine the category of
hotels and lodges to be used by different
consumers.
The buying behavior of individuals can also be
influenced in the organizational context. The
management of an organization may decide in a
particular product to be used by its employees,
who are in turn influenced to buy the product.
It is also important to note that consumer
behavior not only includes the products and
services but ideas and information about these
products as well. The way individuals receive
and perceive information about a product or
service, develop ideas about the products, and
eventually how they make decisions are of key
interest in studying the consumer behavior.
The environmental impact of a given product is
of important consideration to a business
organization. The effects of these products on
the environment will contribute towards the
position of the product in the market. The
medium of disposal of a product after its use will
determine the environmental impacts of the
product.
Thus, the other significant aspect of consumer
behavior is that it is not only concerned with the
decision to buy a product but is also concerned
with how the consumers use and dispose of the
products (Perner, N.d). Most of the
environmental problems are caused by poor
disposal of waste products.
This provides a negative image to the product
and the company dealing in the product.
Knowledge of how a product is used by the
consumers and the final method of disposal will
enable the business organizations to position
their products well in the market and attract
more customers.
Another important aspect to consider is that the
consumer behavior has significant impact on the
society (Perner, N.d). The operations of an
organization may have serious impacts on the
economic, political, or social development in the
society.
These effects are in turn influenced by the
behavior of the consumers of the products of
such an organization. A product may have
harmful effects on the health of the individuals.
However, the manufacturer of the product may
engage in extensive advertisement and sales
promotion for the product to win the interest of
several consumers.
These individuals will end up using the products
despite their negative consequences on the
consumers’ health. Here, the poor consumer
behavior has negative impacts on the society.
The ancient Decision-making models
Various developments have been seen in the
study of consumer behavior over the years.
Different theories were developed to explain the
decision-making processes by the consumer.
One such theory is the Utility Theory that date
backs to three centuries ago that was initially
developed by Nicholas Bernoulli and extended
by other economist.
The theory suggests that the decisions made by
the consumers concerning a particular product
or service are determined by the consumers’
expectations of the outcomes of the decision
(Richarme, 2004). In other words, consumers
will decide to buy a product or service when they
expect the product to be of high quality and
capable of meeting their needs.
This perspective portrayed the consumers as
rational decision makers who able to foresee and
quantify the possible outcomes of each of the
alternatives that are available. The consumers
would then settle on the alternative with a likely
outcome that would best suit their needs.
This model had a weakness since the consumers
are not that rational in decision-making and
neither can they determine precisely the
probabilities of these outcomes (Richarme,
2004). The consumers are often not aware of the
forces that may affect the decision-making
process (Bray, 2008, p.3).
As an alternative, another theory was developed
that suggest that a consumer needs not to
consider all the possible alternatives before
making a decision as in the Utility theory
(Richarme, 2004). Instead, he should go through
the alternatives that are in close range and make
a choice out of these alternatives.
This theory also had some shortcomings and
other approaches were developed on these
previous concepts. The issues of quality and
value were later incorporated in the theories that
explain the buyer’s behavior. Developments
have continued in the approaches to the
consumer decision-making models.
Decision-making models applied in the
hospitality industry
Unlike the other business organizations that deal
in tangible products, the hospitality industry is
mainly concerned with services. The consumers
will be satisfied by the quality of the service
provided as compared to the quality of the
products in other business environment.
The quality of the service is in turn influenced
by the interpersonal interaction as well as the
human-environment interactions (Hui &
Bateson, 1991, p.174).
It is then important for the managers in the
hospitality industry to understand how the
consumers make decisions on the types of
services they need and where to obtain the
services. Various models have been developed in
the recent past that attempt to explain how the
consumers make a decision, eventually
purchase, and use a product and service.
It has been pointed out that the ancient Utility
Theory considered consumers as rational
decision-maker with perfect economic
principles. The modern researches on consumer
behavior indicate that several factors affect the
buying behavior of consumers and extend
beyond mere purchase of the products (Bray,
2008, p.2).
Different models have then been developed that
explain the consumer behavior. Now, most of
these models have certain common activities
that are involved. These include “need
recognition, information search, and evaluation
of alternatives, the building of purchase
intention, the act of purchasing, consumption,
and finally disposing” (Bray, 2008, p.2).
The current models that explain the consumer
behavior are developed from the theoretical
approaches that have been used in the study of
consumer behavior. The theoretical approaches
include the Economic Man, psychodynamic
approach, the behaviorist approach, the
cognitive approach, and the humanistic
approach (Bray, 2008, p.3).
These approaches have evolved over time. For
instance, the Economic man was the approach
that developed the Utility Theory. Much focus
will be given to the cognitive approach and the
resulting models in relation to the hospitality
industry.
In the cognitive approach, the behavior of a
consumer is largely attributed to his internal
cognitive ability, the ability to perceive and
process some information. It is greatly attached
to the field of Cognitive Psychology (Bray,
2008, p.6). According to the approach, the
external factors like environment of an
individual are considered as stimuli that
generate information for internal decision-
making process (Bray, 2008, p.6).
There are two categories of cognitive models of
consumer behavior namely the analytical
models and the prescriptive models. The
analytical models take note of the factors that are
believed to influence buyer behavior and the
relationship between these factors.
The Consumer Decision Model and Theory of
Buyer Behavior are some of the models in this
category (Bray, 2008, p.9). These models
generally follow five step elements for decision-
making process by the consumers.
These steps include problem recognition,
information such, valuation of alternatives,
purchase decision, and post-purchase evaluation
(Reid & Bojanic, 2009). The other category
provides a structured framework of purported
consumer behavior.
The consumer decision model includes the
fundamental activities namely problem
recognition, information such, evaluation of
alternatives, purchase decision, and post-
purchase evaluation as well as divestment (Bray,
2008, p.15). The model was developed in the
late1960s.
It has since recorded various developments over
the years. The decision-making process is
affected by two main factors. The first is
cognitive ability where information is perceived,
processed, and linked to the individual’s
experiences. It is also affected by the
environmental influences and the factors
specific to a consumer.
These factors include the culture, family
background, the individual’s attitude and
personal opinions, his social class, knowledge of
the products or services, and the prevailing
situations among many others (Bray, 2008,
p.16).
The model explains much of what the consumer
decision-making process entails in the
hospitality industry. For instance, the first step is
often problem recognition. This involves a look
at the difference between the current state and
the desired state of an individual.
An individual feels hungry and tired and wants
to eat, rest, and gain strength. The individual
then looks for information on where to obtain
the services. This can include internal search
involving the individual’s experience or external
search of information.
The individuals may compare the alternatives
that are available and settle on one. After settling
on a service and its location, the consumer goes
ahead and consumes the service with an
expectation that it will meet his expectation.
The individual then makes an evaluation of the
value of service he has received and compares
with his expectation. The comparison so made
will determine if the consumer will consider this
particular organization and its services in the
future.
However, this model still has some weaknesses
in explaining the behavior of consumers in the
hospitality industry. The model puts little or no
emphasis on the influence of the environmental
factors in consumer behavior in the
contemporary hospitality industry.
The evaluation of various alternatives is less
applicable in the current hospitality and neither
is it so practical. A first-time consumer may
make choice from the few alternatives that are in
the vicinity like some hotels at a beach.
Thus, other factors like availability of the
service have more influence on the behavior of
such a consumer as compared to cognition. Even
in the events that the environmental factors are
considered in this model, their definition is
vague and the role they play in influencing the
behavior is not explained (Bray, 2008, p.18).
The theory of buyer behavior is the other
cognitive model and the first to be developed. It
draws largely from the concepts of learning
theory. According to the model, different social,
psychological, and marketing influences affect
the consumer behavior in the market (Bray,
2008, p.10).
Various variables are defined that affect
consumer behavior namely exogenous
(external) variables, input variables, and the
hypothetical constructs (intervening variables).
In deed, this is applicable in the current
hospitality industry.
For instance, the input variables include
different environmental stimuli namely
significative stimuli, symbolic stimuli, and
social stimuli. Significative stimuli are the true
aspects of the services like its quality observed
by the consumer while symbolic stimuli are
appeals by the service provider about the quality
of the services.
Similarly, the social stimuli are other factors like
peer influence. These factors are typical of the
consumer behavior in the current hospitality
industry.
This model has the weakness that it identifies
exogenous variables as external factors that are
specific to a buyer and influences the buyer
behavior. However, it fails to provide a succinct
definition of these external variables (Bray,
2008, p.13).
The consumer behavior is still irregular in
several dimensions. Changes have also been
noted in the hospitality industries that have
prompted the organizations to act. For instance,
most consumers in the hospitality industries
currently emphasize on healthy diets.
They demand menu choices that are healthier
with low levels of toxic substances. The hotels
have responded by including in the menu foods
that have lower fat and salt contents (Reid &
Bojanic, 2009).
After improving the menu, it is not obvious that
the particular consumers that demanded for such
foods will make such orders regularly. These
individuals make occasionally make orders for
the fatty foods claiming that they have
consumed less fatty foods for long and this day
would compensate for the deficit.
In general, the two analytic cognitive models
described above have certain weaknesses and
fail to describe the real behavior of the consumer
in the current market. The models take the
traditional approach in which consumers are
assumed rational decision-makers.
It has been observed that consumers often
exhibit non-conscious behaviors that cannot be
explained even by the consumers (Bray, 2008,
p.19). The models also have little theoretical
background and make use of variables that may
not be observed. They then fail to explain the
consumers’ behavior explicitly.
The fundamental factors affecting consumer
behavior in hospitality industry
The above-discussed models of consumer
behavior make use of different factors. Some of
the factors emanate from the consumers whereas
other factors stem from the business
organizations.
The factors that are specific to the consumers
like the religion, cultural values, beliefs and
practices, the economic status of an individual,
the age, sex, experience with a product/service,
or peer group influence often affect the choice of
a consumer on a particular product.
The culture or religion may affect the types of
foods consumed by some individual and the kind
of hospitality services used by these individuals.
The cultural values of a community will
determine the behavior of an individual from the
community in a given context (Luna & Gupta,
2001, p.47).
Culture is particularly influential for
organizations in the hospitality industry that
have expanded their operations to an
international market (Reid & Bojanic, 2009).
Some cultures forbid taking some foods and so
do some of the religious teachings and belief.
These will also dictate the lifestyle that
individuals adopt thus affecting the operations
of organization in the hospitality industry. In the
same manner, the economic status of an
individual often determines the kind of product
or service that the individual can afford. The
hospitality services are provided at varying
costs.
The kinds of hotels and lodges that can be
afforded by an individual will be associated with
the level of income of the individual. Peer group
influence coupled with an individual’s
personality and social status affect the buyer
behavior of consumers.
It has been observed that ‘the need to feel
important and be treated with the utmost respect
may lead a potential guest to search for an
upscale hotel with concierge floor when making
a reservations’ (Reid & Bojanic, 2009). An
individual’s personality and status in the society
will determine the individuals with whom he is
associated.
The members of these social classes may
influence an individual’s choice of the kinds of
hospitality service to use as well as where to
obtain the services. Similarly, an individual’s
attitudes or opinion about a product or service,
the knowledge he has about the product or the
experience of using the product will influence
his buying of the product.
An individual may develop negative attitude
towards some product from the initial encounter
with the product. This may affect his future use
of the product. A consumer may also be attracted
to services of an organization having understood
its quality in the past.
On the other hand, factors concerning the
operational strategies of an organization may
also affect the consumer’s decision to use its
services.
The product brand, quality of the products and
services, prices and packaging of the products,
the products’ availability in the market, and the
promotional strategies employed by the
organization’s management are some of the
factors influencing a consumer’s decision to buy
some product.
The loyalty of a product brand often appeals to
the consumers who are in turn influenced to buy
the product. The loyalty is enhanced by
developing product or services of high quality
and that can serve the interest of the clients over
long periods.
The prices of products can also affect the buying
of the product. Consumers will compare the
prices of the alternative products in the market
and go for the prices that are cheaper but have
the same quality. The packaging of the products
is also influential as customers may be in need
of varying quantities of a product.
If one needs small quantity for a given product
and there is no pack of that size, he will
definitely move on to an alternative product with
the required packaging. Customers also buy
products because they have bee informed about
the products.
The kind of advertisement carried out by a
business firm on a given product will affect the
consumers’ buying and use of the products. The
other important factor is the availability of the
product in the market. The geographical
locations of the products and services will affect
the buying and use of these products or services.
The consumers often do not want to travel long
distances and incur much expense while looking
for a product or service. In the hospitality
industry, the hotels and lodges should be located
in strategic and convenient places so that the
clients do not have to travel long distances to get
the services.
Tourists and other travelers are common clients
to the companies in this industry. Thus, the
organization’s facilities should be located in
major towns or near tourist attraction sites with
proper accessibility to the locations.
Significance of consumer behavior to
business firms and organization
The understanding of the consumer behavior is
important for enhancing the operations of a
given business organization. This is observed in
several dimensions. Firstly, the knowledge of
consumer behavior enables firms to develop
effective marketing strategies to gain
competitive advantage over their competitors.
Business organization should strive to impress
the customers in the first instance in order to
maintain these customers (Perner, N.d). An
organization is able to understand the
psychology of the buyers and the other
environmental factors influencing their buying
behavior.
By understanding the whole process of decision-
making by a customer concerning buying and
using a given product, the firms are able to
develop products and services that meet the
needs of the customers. The firms understand
how the clients prioritize on different levels of
products.
They can then develop good marketing
campaigns to capture a wide market (Perner,
N.d). Effective promotion and advertisement of
products have significant influence on the
consumers’ willingness to buy the product.
Consumer behavior enables the business
organizations to understand that their products
may not do well at the initial stages of its
introduction in the market. Few people will be
initially interested in the product and then
influence others to buy and use the products later
(Perner, N.d).
In that respect, the firms can strategize
financially to support its operations during these
hard times. It also enables the firms to
understand the importance of pleasing its initial
customers in order to capture a wider market in
the future.
Business operates under the policies imposed by
the local and international regulatory agencies
and thus the development of such policies have
direct impacts on their operations. Governments
develop public policies that apply to the business
organizations to protect the rights of the
members of the public.
Consumer behavior is very important in the
development of these public policies (Perner,
N.d). A product may be developed that is used
by the consumers for some purpose. This
product may have some side effects on the whole
or a portion of the consumers.
It is necessary to the manufacturers indicate the
possible side effects and the clinicians advise the
users accordingly. Now, some of the users often
ignore these instructions and suffer the side
effects of the products. The policy makers will
use this consumer behavior and ensure that
visual impressions of the side effects of the
product are indicated on their packs.
Knowledge of consumer behavior patterns can
also be beneficial to the consumers who will
develop a proper decision-making approach
towards the purchase and use of a product or
service. It should be clear that if one buys a
particular quantity of a given product in one
pack, he should pay less compared to buying two
separate packs that are half this quantity (Perner,
N.d).
The concepts derived from consumer behavior
can also be used in other fields of the social
sciences away from business. The way
information is perceived and conveyed among
the users of a product can be used in influencing
the perception of the individuals towards some
social practices that improve on their health and
well-being.
Reference List
Bray, J., 2008. Consumer Behavior Theory:
Approaches and Models. Web.
Hui, M., & Bateson, J., 1991. Perceived Control
and the Effects of Crowding and Consumer
choice on the Service Experience. Journal of
Consumer Research, 18(2); 174-184.
Luna, D., & Gupta, S., 2001. An integrative
framework for cross-cultural consumer
behavior. International Marketing Review, 8(1);
45-69.
Perner, L., N.d. Consumer Behavior: The
Psychology of Marketing. Marshall School of
Business USC. Web.
Reid, R., & Bojanic, D. 2009. Hospitality
Marketing Management. Fifth Ed. New Jersey:
John Wiley and Sons.
Consumer Behavior in Online Shopping
Online and offline purchase behavior studies
have become quite numerous and widespread.
On the one hand, earlier studies argue that
purchase intention is the key motivator for the
consumers. On the other hand, recent inquiries
show that purchase behavior plays a far more
significant role than the initial plan to buy
anything. Qualitative forecasting techniques
show that individual buying habits are more
critical in purchase decision making.
Qualitative Forecasting
Qualitative forecasting is an approach based
upon subjective factors at times when there is no
sufficient data to use quantitative techniques.
Qualitative method is based upon judgment and
intuition of the experts in the matter and
consumers. Forecasters usually apply this
method for intermediate or long-range
predictions (Ezeliora, Umeh, Mbeledeogu, &
Okoye, 2014). There are four basic qualitative
forecasting techniques: executive opinion, sales
force opinion, Delphi method, and consumers’
opinion.
Executive opinion is averaged subjective views
of key members from all departments about the
number of sales during the examined period.
The executives usually discuss a matter during a
brainstorming session or other meeting.
Therefore, the forecast is made quickly and
easily without the need to elaborate statistics and
charts. However, this is still groupthink, so
leaders and other authorities present in the room
may affect the opinions of individual members
making the forecast less objective (Ezeliora et
al., 2014). Another relevant and straightforward
forecasting technique is sales force polling as it
consists of opinions of people close to the action.
Salespeople are the closest to the customers and
can provide specialized predictions about the
specific territory and period.
Consumers’ opinions are usually obtained
through surveys using telephone contacts,
questionnaires, and interviews with the
customers. This technique is especially relevant
for business with a limited market to find out
their customers’ future needs and make an
accurate forecast. Equally important is the
Delphi method which is a jury’s opinion taken
anonymously and analyzed by a panel of
experts. Even though all the techniques
mentioned above are subjective and may be
considered inaccurate, experts continue using
qualitative forecasting at times when there is no
sufficient historical data.
Online Purchase Behavior
Getting to know consumer online purchase
behavior is crucial for those who want to
succeed in selling their goods on the internet. In
the past 60 year psychologists and consumer
behavior researchers implied a powerful
influence on purchase decision (Liu, Li, & Hu,
2013). This means that people who are shopping
online often make their decision about
purchasing something relying on the impulse
rather than on a plan. On the one hand, it is
common knowledge that most people do not buy
online if they have not planned to do so. On the
other hand, the sole intention does not guarantee
that a customer will buy at a certain online store.
Several factors influence customers’ purchase
decision, among those factors is the overall
attractiveness of the website, secure payment
methods, positive feedback, fast and safe
shipping, and client support availability (Lim,
Osman, Salahuddin, Romle, & Abdullah, 2016).
Moreover, in specific scenarios, customers may
buy something entirely without a plan especially
when it comes to buying new types of products.
Liu et al. (2013) mention that purchases of
unfamiliar brands “result more from impulse
than from prior planning” (p. 83). So,
controlling and influencing online purchase is
far more important than getting to know what
customers actually want.
Conclusion
Under the above-mentioned circumstances, it is
only natural that online stores use qualitative
forecasting techniques to examine the specific
online purchase behavior their customers have.
Customers’ surveys, salespeople’s opinion, and
the opinions of experts are common sources of
information for the online business to improve
the buying experience thus increasing their
sales. So, today’s studies show that getting to
know consumer online purchase behavior is
much more valuable than information regarding
what customers plan or want to do.
UNESCO and Consumer Behavior
Introduction
It is normally the duty of most governments of
states to finance almost all sectors of their
economies such as health, sport, and education
just to mention a few. However, there are
international and local organizations that come
in to help the government ensure that the society
acquires all the essential needs.
Most of these organizations are not for the aim
of profit making but for the help of the society.
One such organization is UNESCO, which
stands for United Nations Educational,
Scientific, and Cultural Organization.
This organization seeks to ensure the
sustainability of security and peace in the society
through the provision of education and other
important agents of success such as science and
culture. There are about 197 member states of
UNESCO throughout the globe together with
eight Associate members. As such, regional
offices of UNESCO are distributed in various
parts of the world.
UNESCO has several objectives, with the main
ones including poverty eradication, promotion
of education, peace enhancement, and
intercultural dialogue among others (UNESCO
1). In order to achieve the aforementioned
objectives, UNESCO has put in place programs
that initiate their attainment.
The programs include communication and
information, education, culture, social, and
human sciences, and natural sciences. In
addition to this, UNESCO has initiated projects
as well as sponsored them in a bid to ensure that
its goals as an organization are obtained. Some
of the UNESCO sponsored projects include “the
promotion of cultural diversity; technical,
literacy, and teacher-training programmes;
international science programmes; the
promotion of independent media and freedom of
the press; regional and cultural history projects”
(UNESCO).
Having looked at a summary of the functions
and objectives of UNESCO, the rest of the paper
will analyze the application of consumer
behavior literature and theories on this
organization. Later on in the paper, the specific
application of this theory on UNESCO will be
discussed, as well as, how UNESCO as an
organization attempts to influence its clientel
Analysis
Consumer behavior literature and theories of
learning and memory
All organizations (both the profit and the non-
profit oriented) have ways through which they
encourage the society learn of what they do. In
order to succeed in this, all organizations are
entitled to be aware of consumer behavior
literature, as well as the theories of learning and
memory.
Using these strategies organizations are able
improve their marketing skills therefore,
reaching a wide scope of consumers. According
to the consumer behavior literature and the
theories of learning and memory, organizations
play with the psychology of the consumers
hence making them like and prefer their services
and/or goods to those of other organizations
offering the same (Westbrook and Oliver 84).
Secondly, the organizations will be able to adopt
strategies that put the consumers in the first
position. For instance, the organization should
ensure that the messages they convey through
advertisements will be able to woe the
consumers and make them potential customers.
Concisely, consumer behavior could be
described as those qualities that potential
consumers look for in a product or service
before making the buy decision (Alba,
Hutchinson, and Lynch). This behavior differs
from individual to individual. As such,
organizations have to make effective decisions
during advertising to reach a wider scope of the
society as its consumers.
As for the case of UNESCO, it ought to
understand the scope of its consumers before
implementing any marketing strategy. For one,
UNESCO has several objectives, which are all
driven towards a larger part of the society.
Therefore, to ensure that the society is well
receptive of their functions, projects, and aid,
UNESCO as an organization has to apply the
marketing strategy of consumer behavior
literature and theories of learning and memory.
In doing this, the organization will attain the
trust of the people in the society as they will be
able to see the good work UNESCO is doing.
First, UNESCO should ensure that its objectives
are well defined such that the people in the
society clearly understand its functions.
For example, when implementing one of the
UNESCO projects mentioned earlier in the
paper, the organization ought to describe in a
clear manner the procedures and the aims of the
objectives. This will not only help in gaining the
cooperation of the people in the society, but will
also ensure easier attainability of the objectives.
Application of the theory
As discussed in the previous section, the
application of the consumer behavior and
learning memory theory is through the
objectives of the organization, in this case
UNESCO. One of the main application methods
is through proper marketing strategy, whereby
the organization ensures proper and effective
advertising of the functions and objectives of the
organization to the society (Hawkins, Best, and
Coney).
This can be through marketing campaigns that
are widespread to reach a wide scope of
consumers (Alba, Hutchinson, and Lynch). For
instance, UNESCO could facilitate marketing
campaigns especially to regions and nations that
are not member countries to drive them to
becoming members. If this is effectively
managed, UNESCO will be a global
organization and thus, its objectives of poverty
eradication, as well as the others will be
achieved globally.
Another way through which this theory could be
applied is through social marketing (Hawkins,
Best, and Coney). In this, the organization
ensures that the consumers get the idea of the
organizations’ products and services before they
are sold to them. This way, consumers are able
to make realistic decisions thus making them
gain the trust of the marketing organization
(Oliver 465).
UNESCO could apply this strategy, for instance,
issuing of proposals of the projects they would
like to develop in certain regions. This gives the
society the chance to determine the genuineness
and capability of the organization before having
them start projects in their regions and then they
fail in future.
Public policy is another way of applying the
consumer behavior and theories of learning and
memory (Hawkins, Best, and Coney). Given the
publicity that UNESCO has gained through its
service to the society as well as through
collaboration with other non-profit making
organizations such as UNDP, it has been able to
apply effectively this policy. It is true to say that
only a small percentage of the world’s
population have no information concerning
UNESCO.
Even those who do not know of its objectives
and mission are aware of its existence. As such,
convincing people is not a hurdle for UNESCO
as an organization. From this, it can be said that
UNESCO has a competitive advantage over
other non-profit organizations in the same scope
more so over the upcoming ones. This is
because, most people are already aware of what
it is and what it deals with hence, winning the
trust of majority of the people.
In my own opinion, I would consider that these
application methods are efficient if effectively
implemented by UNESCO. In fact,
implementing these strategies will create a
greater influence of UNESCO as a non-profit
organization.
Conclusion
From the above discussion, it is clear that
UNESCO is one of the important non-profit
organizations in the world. Having looked at the
objectives of UNESCO, it is by no doubt that
this organization carries out functions that are of
dare need to the people in the society. However,
all the objectives revolve around poverty
eradication and peace enhancement, which are
the needs of every society.
In order to achieve these objectives in an
effective manner, UNESCO just like other
organizations has to ensure that its marketing
strategies are efficient. From the analysis, it was
noted that a clear understanding of consumer
behavior literature, learning and memory
theories are essential for the success of
UNESCO.
The various ways through which these theories
could be applied were also listed in the analysis
section as being market strategy, social
marketing, and public policy (Oliver 465). If all
the aforementioned application techniques are
efficiently applied on UNESCO, it is true to say
that it will lead to its success.
In addition to this, the plan of consumer strategy
for UNESCO is certainly not a big issue for the
organization given the great influence and
publicity that it has all over the world. It can thus
be concluded that, only a little enhancement is
required on the marketing strategy of UNESCO
in order to ensure the win of more members from
all regions of the world.
