Literature Review On Customer Behaviour
Generally customer behaviour is a study of when how where and why people do or do not purchase a product, service, ideas, or experience to satisfy needs and desires. It associates with elements from psychological, sociology, demography and economics (Majumdar 2010).
Understand how customer behave is very crucial to any firm or organization. Due to firms exist to satisfy customer’s needs and wants to achieve their goals (Solomon et. al. 2007). Moreover those wants and needs can only be satisfied through the extent that marketers understand the people or organization that will use the products or services they are trying to promote, and thus they can do better than their competitors.
The organization or marketer can understand customer behaviour by understand customer’s perspective (Berkun 2008). In another word, to understand how does a customer decide that he or she needs a product, and what are the best sources of information to learn more about alternative choices; what is the experience like to acquiring the product; does the product perform it’s intended function.
Factors that influence customer behaviour
Customers do not make purchase decisions depends on nothing. However, they are subject to both external and internal factors that affect them.
Culture is one of those external factors, it is defined as the patterns of behaviour and social relations that characterize a society and separate it from others (Reid and Bojanic 2010).
Culture is a shared, learned, symbolic system of values, beliefs and attitudes that shapes and influences perception and behaviour¼an abstract “mental blueprint” or “mental code.”(Baldwin et al. 2006)
The similarity of these two theories is that, both of them aware that culture is an important element which can affect people’s behaviour, perception, as well as their decision making. And it is formed by heritage and common experience.
The difference of these two theories is that the first author is focus on that culture is refers to a certain social group, rather than individuals that they might have the same attitudes towards a specific issue or item. Members or people within this group may attempt to make a similar choice or hold the same attitude while they do their decision making.
For instance, teenagers are mostly like to dine in places like McDonald’s or KFC, not because they all like the food there, but only because it is a trend among this particular group. Their friends do so, thus they followed. Meanwhile, the second author is emphases on the process of how culture is formed. And it more focus on spiritual aspect. Such as most of the international hotels don’t have level 13, the reason is that most of western guest regard 13 as an unlucky number.
Reference groups have a significant influence impact on consumers’ hospitality and tourism purchase decisions.
Based on Rosenberg’s concept, a reference group is a group with whom an individual identifies to the point where the group dictates a standard of behaviour (Rosenberg and Turner 1990).
According to Hoyer, a reference group is a set of people with whom individual compare themselves for guidance in developing their own attitude knowledge, or behaviours. (Hoyer and Macinnis 2010).
The similarity between two of the theories above is that, both of them indicate that individual consumers to compare their own feeling and thoughts according to others within the particular group. Members in this group will attempt to benchmark themselves to the group standard.
In terms of differences, the first definition is focus on how the reference groups can affect individual consumer on aspect of decision making and perception forming. For example, when an individual travel at a certain destination, personally, he or she felt it was great, however, before he or she internalize any perception, this individual may check with friends come from the same group about their perception, then compare against his or her own opinion.
Mostly the individual will like to take the group’s perception. As for the second theory, it is talking about that the reference groups also serve a status function. When an individual seek to become member of the group, they will develop their attitude or knowledge by following members of the group.
Internally, customer behaviour affected by those factors below:
Personal needs and motives, a need is an imbalance between customers’ actual and desired states. Motivations are inner states that direct a person towards a goal of satisfying a felt need (Kurtz and Snow 2010).
A need is an internal state of tension caused by an unsatisfied desire or ideal (Swarbrooke and Horner 2007).
Two of the theories about the needs are almost the same. Both of the authors indicate that a need is disequilibrium between what people desired internally and what they actually got in true reality. Meanwhile these particular needs will drive people to take varieties of action to achieve their goals.
According to Maslow, the needs of human being, as well as customer can be classified into five different levels, including physiological needs, safety needs, social needs, esteem needs, and self-actualization (Montana and Charnov 2008).
On the other hand, according to Elmer Wheeler, he suggests another five key points of psychological motivations, which are quite different from Maslow’s theory. The five points are importance, appreciation, approval, ease, and success. Moreover, this particular theory is more focus on consumers’ buying behaviour (Vitale 2007)
The differences between the two authors are that, Maslow is more focus on people’s primitive needs, and he believes that people will be motivated only when their basic needs are being satisfied. The higher motive will begin to work only when the lower needs are satisfied.
For instance, when people are extremely hungry, they won’t care about the taste of the food. Oppositely, when full fill the hunger is not the motive anymore, they will begin to pay attention to the taste of food and environment of the place that they are dine in. However, from Wheeler’s perception, the most important motivator for people is feeling superior among others. And sometimes people quit their jobs, even left their families, just for pursuit personal appreciation. Approval refers to that most of people will do things that will be accept or like by others.
Generally, people are lazy, as a result they want things or problems to be decided and solved easily and in a high speed. Thus when people make their purchase decision, the hierarchy of needs are quite different from Maslow’s. The needs or motives will not exist or working step by step. A higher motive may begin to perform its influence while the lower level needs have not being satisfied. For instance, rap music was original from ghetto, where kids and adults are still experience hunger, and thirst.
Marketing implementation on customer behaviour
Mostly consumer’s decision making will be affect by his or her attitude towards the product a lot. There are two ways that the marketer can change or influence customer’s behaviour via influence their attitudes towards products and services.
Advertising is a set of communication that used to persuade an audience or potential customer to buy or take some action upon products, ideas, and services (Ogden and Rarick 2009).
Advertising is one of the main ways that consumer received information from. It is also quite efficient in terms of speed and coverage. For instance, hotel and restaurant nowadays usually put their advertising on line and even on mobile through message to spread their new product or promotion to the customer. Thus consumer can access and share information with their friends within a very short time. Moreover, most of people will attend to choose product that recommended by stars or notable they like. That’s why restaurants try to get Michelin’s recommendation.
Another example shows that when technology and notable both applied in advertising, the outcome will be significant. Such as customer download recipes of famous restaurant through their Iphone and booking Michelin recommended outlets via internet.
According to Lantos Feedback is another efficient way to shape customer’s attitude. However different from advertising, feedback is more focus on customers that have already purchase the product or experienced the services (Lantos 2010).
For example, when customer finished dine in a restaurant, while they paying the bill, staff can always ask them some questions orally or ask them to fill up a feedback form. So that the organization can understand consumer’s perception or attitude towards both of the products and services better. Thus the customer’s behaviour can be shifted by the improvement of the product or services according to consumer’s requests from feedback. Furthermore, comments on website are also a form of feedback. If they are positive, a lot of benefit can be bringing to the organization.
Based on Glynn’s point of view, brand is very important due to its link with customer’s perception to both the firm’s reputation and its offering (Glynn 2009). While making a purchase decision, most of the customer will take quality and value of the product or service into consideration. Thus, how to make customer believe that the product worth it become the core point. A good firm reputation or a good brand image is definitely crucial to any organization and its product and service.
Brand building or value added can be done through provide quality products and services to customer. Other than quality product and service, a word of mouth will be needed to enhance the brand image. That requires the organization provide quality after sales service as well. For example to ensure the quality of product and maintain the image of the brand, Haagen-Dazs applied a quality control system to their produce system, as well as their staff training system to ensure that no matter size or taste of the ice cream will be the same all over the world.
Another example for brand building is in hospitality line. International hotel group such as Hilton and Accor, they will have a standard regulation and policy book for each new opening hotel to follow and maintain the standard. Moreover they will send management and training team to those franchise hotels to train the staff and management there to make sure the services and products there are being maintained in a certain level, so that the image or brand of the company would not be ruined.
According to Lazarsfeld and Katz, opinion leader is an agent or individual who is an active user or customer of a product or service. And introduce or recommends the product or service to the lower end users (Rogers 1995).
A hospitality manager can also impact his or her customers’ decision making through the usage of the opinion leader. Usually, the opinion leader is viewed as an expert of a certain task (Lee and Lashley 2008). In the eyes of customer, the manager of a hotel or restaurant would become an expert of the hotel or restaurant, thus when they are dining in the outlet they will like to ask the manager for suggestion. This particular role enables the hotel manager to influence customer’s decision making in a rather large scale.
After implement those methods above, it helps marketers in hospitality related industries to have a comprehensive understanding of how customer behaved. It is enable them to analysis or even predict what customer needs and wants, thus they are able to meet customer needs or even exceed customer’s expectation.
As for advertising, almost all of the hotels today got their own online advertising and booking system thus enable customer to obtain the product and service related information more quickly and accurately. Moreover, it can increase sales of product by let more potential customer notice the brand and product.
The advertisement helps to alter customer’s attitude by promote positive aspects of the products and services (Pour 2002). Through advertising, the organization can also help investors to find professional operators. For instance, Capital Pacific Holding is going to launch a new St. Regis in Dana Point. And they find their profession operator though advertising (Corporate Expansion and Relocation 2001)
Feedback is another efficient way to capture how customers think, as well as how they make decisions. Through apply feedback system; the organization can receive customer’s suggestion or advice immediately, and most of those feedbacks are customers’ really thoughts. It can help the organization to satisfied customer needs more efficiently. And it provides a chance for the company to do direct communication with customers. Otherwise, collection and analysis feedback provide a quality resource for the company to get the major trend or future trend of customer behaviour.
What I have learned
Customer behaviour is a key element of marketing approach. For any product or service provider, knowing what their customer needs and wants are crucial to the success of business. Furthermore through analysis customer behaviour the organization can improve their products and services from customers’ perspective. That’s help to gain more potential customer, as well as enhance customer loyalty.
Based on various of books and documents, customer behaviour are affected by a set of internal and external factors, including culture, socioeconomic level, reference group, personal needs and motives, personality and self-image, and perception and attitude. To understand how customer behaved is a major challenge for hospitality and tourism industry today. Due to the customer today are better educated, have stronger purchasing power, and they require more sophisticated dine and travel experience (Mooij 2010).
Importance of customer behavior to hospitality industry
For most of the hospitality employee they will have direct contact with customers or guests in a daily basis. Moreover, one of the most important goals to them is create and maintain satisfied customer, so that the revenue of hotel can be increased.
On the other hand, the macro environment is keep changing, if a company wants to survival and development, the management need to anticipate the wants and needs of customer (Williams 2002). For example, if a hotel is intended to open up a new outlet in a specific location; the project team must consider what are the culture, economic level, and food and beverage preference. However, understand all these are depends on the knowledge of customer behaviour.
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