���IC 364 Integrated Marketing Communication

for Tourism Lecture 2.2: Basic Marketing Part II: Tourist behaviour and Decision Making Process

Dr. Paradee Yasothonrsrikul

Human Behaviour & Maslow’s Hierarchy of Needs

Maslow’s Hierarchy of Needs According to Maslow’s Hierarchy of Needs (1954), human behaviour depends upon the needs human beings want to satisfy. All human beings have five major types of needs: !

- physiological (the need for air, water, food, comfort, waste elimination, temperature control, sleep and sex); - safety and security (the need for protection, order, and stability, and the freedom from fear of physical danger); - social (the need for love, family, family affiliation and social acceptance); - ego (the need for achievement, competency, recognition, approval, status, good reputation, and fame); and - self-fulfilment (the need for personal development and growth, self- actualisation, and challenge).

Safety and security needs protection, security, order, law, stability, being free of fear and deprivation

Physiological and biological needs air, water, food, drink, shelter, sleep, warmth, waste elimination, sex, health, fitness

Social needs belonging, love, affection, acceptance, approval, relationships, family

Ego needs recognition, reputation, achievement, competition, status, fame

Self-actualisation needs personal growth, development, actualisation, challenge,

new experiences

Figure 1: Maslow’s Hierarchy of Needs (original 5-stage model)

The original model of Maslow’s Hierarchy of Needs comprised five different types of needs,w as developed between 1943 and 1954, and published in 1954. In 1970 and 1990 hen model was modified. The 1970 model comprised seven types of needs and the 1990 model comprised of eight types of needs (see figure 2). !

In his original model, there was only one growth need - a self-actualisation need. Individuals who are motivated by self-actualisation seek personal development, growth, challenges, and new experiences. In his later model, Maslow differentiated the growth needs of self-actualisation; he identified two lower-level growth needs prior to the general level of self-actualisation and one higher level beyond that level. !

The first two lower-level growth needs are cognitive need (the need to know, understand, explore) and aesthetic needs (the need for beauty, harmony, balance, symmetry, order). The one higher-level need beyond self-actualisation is transcendent need (the need to help others to find self-fulfilment and realise their potential) (see figure 2). Maslow’s model can be used to predict human behaviour. When one knows where an individual is on ht needs hierarchy, one can determine the next level of needs the individual will be seeking to fulfill. Despite the criticism, Maslow’s Hierarchy of Needs is currently one of the most widely accepted motivational theories. It is used to identify what motivates an individual and what kinds of information the individual seeks at different need levels.

Safety and security needs protection, security, order, law, stability, being free of fear and deprivation

Physiological and biological needs air, water, food, drink, shelter, sleep, warmth, waste elimination, sex, health, fitness

Social needs belonging, love, affection, acceptance, approval, relationships, family

Ego needs recognition, reputation, achievement, competition, status, fame

Self-actualisation needs personal growth, development, actualisation, challenge, new experiences

Figure 2: Maslow’s Hierarchy of Needs (8-stage model)

Cognitive needs knowledge, understanding, learning, meaning, awareness

Aesthetic needs beauty, form, balance

Transcendent needs supreme needs of helping others to self-actualise

Consumer Behaviour & Factor Influencing Decision Making Process

Consumer buying behaviour is influenced by numerous factors. Decision-making questions such as what, why, how, where and when consumers buy are influenced by: !

1. Environment factors -the environmental stimuli that are beyond the consumer’s control ; -the market stimuli that are largely under the control of marketing managers; -the marketing efforts, which refer to the marketing, pricing, distribution and promotion. 2. The buyer’s factors -the buyer’s personal characteristics; -the buyer’s psychological characteristics; -the decision process. 3. The buy’s responses factors. -product selection; -pricing acceptance; -seller and service choice; -reactions to product promotion; -purchase location; -purchasing amount; and -purchasing timing.

Environment Factors!

Environmental Factors!

Environmental Stimuli!Demographic!Cultural!Social!Geographic!Economic!Historic!Legal!Political!Technological!-Competitive!

Market Stimuli!Company!Customers!Suppliers!Intermediaries!Publics!

Marketing Efforts!Product!Price!Place/Distribution!Promotion/Communication!People!Publics!

Figure 6: Environmental Factors!Source: Adapted from Reisinger, 2009!

Environmental Stimuli!!1. Demographic environment - these factors include age, gender, education, occupation, socio-economic status, martial status and life stage. !

Key trends:!-many consumer seek for a simpler life by moving to smaller apartments and cheaper house in less population communities. Many of them began to look for second homes in less developed countries!-travel in a more environmentally friendly way!-increased mobility and geographic population shifts, the world population is highly dispersed due to population migration within and between countries. This, consequently, leads to an increasing in numbers of both legal and illegal immigrants as well as the ethnic and racial diversity mix. !-rising Hispanic and Asian influences and declining Western influence.!-delayed retirement!-focus on maintaining a younger, healthier, more active lifestyle!

-changing family structure, more singles, more childlessness, later marriages, higher separation and divorce rates, more unmarried working women!-an increasing number of gays, lesbians, and same gender households!-relatively low birth rate and a decline in the number of teenagers and children while there has been an increasing in number of aging population that creates the ‘silver century’!-shifting birth trends, older mothers, few pregnant teenagers!-the increasing importance of women as decision-makers!-increased educational levels and income, education influences job opportunities and income and also shapes our values, beliefs, attitudes, interests, activities and lifestyle. !-increased white collar population!

2. Cultural Environment!!People from different cultures behave differently. Culture is the fundamental determinant of a person’s wants and behaviour. Culture is passed from generation to generation as part of the socialisation process we undergo when growing up.!!They are including:!!-values!-beliefs!-language!-religion!-customs!-traditions!-family relation!!Culture determines what kind of clothes people buy, what food they eat, how they dress and what they do with their leisure time. It defines what people need and what products they will buy and avoid, where to buy and how often. !

3. Social environment Consumer buying behaviour is influenced by social factors such as:

3.1 social class - groups of a society whose members share similar values, interests, status or position based on amount and type of income, occupation, area of residence, interests, opinions and lifestyle preferences. Social class include: 1) upper-uppers; 2) lower-uppers; 3) upper middles; 4) middle class; 5) lower-middle; 6) upper lowers; and 7) lower lowers.

3.2 social stimuli - or influence can be interpersonal and intrapersonal. -Interpersonal stimuli refer to: 1) larger social and cultural groups to which people belong or would like to belong e.g. family, friends, or interests, gender and age based groups or relationship groups; 2) smaller peer and reference group, which includes 2.1) a group that the individual already belong; 2.2) a group that an individual would like to belong (aspirational groups); and 2.3) a group that individual would not like to belong to (dissociative group) -Intrapersonal stimuli refer to needs, perceptions and attitudes that characterise and shape an individual’s behaviour.

3.3 Family - significantly influence people’s buying behaviour. Families vary in terms of size, strength, and cohesion depending upon the cultural orientation of their members. 3.4 Social role - refers to the activities that a person is expected to perform in a family or society e.g. the role of son, daughter, husband, wife, teacher or doctor. 3.5 Social status - social role reflect a social status given to an individual by a society. People usually buy products and services that show their status in society.

4. Geographic environment The major geographic variables that affect people’s buying behaviour are the natural resources such as water, forests, beaches, wildlife, coral reefs, clean air, vegetation, and land use. Often, tourists purchase holiday trips to destination that offer distinctly different geographical environments than their place of residency. 5. Economic environment The key economic factors that effect purchasing and spending power of individual consumers are: 1) the disposable income and 2) the discretionary income. The other factors that influence people’s purchasing and spending patterns are business cycles, inflation, the unemployment rate, the interest rate, the exchange rate, saving policy, debt, credit availability, taxation policy, imports and export.

6. Historic environment Historical and ancestral ties are important in influencing people’s behaviour e.g Japanese and Koreans often refused to cooperate and engage in various economic and social activities. 7. Legal and political environment The legal and political environment that influences people’s buying and spending behaviour includes: laws, legislation, policies, regulations, government agencies, and pressure

8. Technological environment The new technology has had a dramatic effect on people’s buying behaviour e.g. the Internet, sophisticated websites, computerised reservation and payment systems, cell phones, bar codes, ATMs, dBay, Skype, the emerging of Global Distribution Systems (GDS) and online travel agents such as Expedia, Travelocity, Opodo and Oritz, self-scanning and self-checking out at many superstores, self-checking counters at the airport, etc. 9. Competitive environment Competitive environment varies depending on the market structures. In a monopolistic market structure dominated by one provider only, there is no competition, demand is inelastic, allowing prices to rise to seller’s satisfaction and consumer’s dissatisfaction.

Buyer’s Factors!

Buyer’s Factors!

Buyer’s personal characteristics!

Nationality!Ethnicity!Religion!Age!Gender!Life cycle stage!Occupation!Economic circumstance!Lifestyle!Personality!Self-concept!

Buyer’s psychological characteristics!

Motivation!Perception!Learning!Beliefs!Attitudes!

Decision Precesses!Problem recognition!Information search!Alternative evaluation!Purchase decision!Post-purchase behaviour!

Figure 7: Environmental Factors!Source: Adapted from Reisinger, 2009!

Buyer’s personal characteristics!1. Nationality - the behaviour of potential buyers is influenced y their nationality and language spoken. National cultures affect what people buy and eat, how they dress, what music they listen to and where they travel. 2. Ethnicity - refers to the process of identification of human groups within the larger society on the basis of their ethnic characteristic such as physical attributes, religion, common perceptions and cognitions, values and traditions, and geographical location. Sometimes the term ethnic groups and subcultures are used interchangeably. 3. Religion - represents an important influence on people’s buying behaviour. Different religions groups have distinct consumption habits and preferences for leisure and entertainment. 4. Age - determines the way people behave and the type of goods they purchase. 5. Gender - people’s buying behaviour and consumption patterns depend upon their gender.

6. Lifecycle stage - a typical family goes through a number of distinct stages in its life, each stage is characterised by different consumption needs and patterns. 7. Occupation - affects individual’s behaviour and need for goals. 8. Economic status - affects the choice the person makes and products purchased. 9. Lifestyle - a person’s specifics patterns of activities, interests and opinions. Some people follow a very social lifestyle. They surround themselves with friends and relatives. 10. Personality - a person’s distinguishing psychological characteristics leads to specific responses to the environment and distinguish one individual from another. People with different personalities behave differently and have different needs. 11. Self-concept - refers ti self-image or mental picture of self. Self-image plays a determining role in how people see themselves and what they buy to improve their self-image.

Buyer’s psychological characteristics!!1. Motivation - a motive is a primary factor driving a person’s behaviour

2. Perception - the process by which people create meanings from the selection organisation and interpretation of stimuli from within themselves or from the external environment. 3. Learning - learning arises from experiences and represent changes in people’s behaviour.Most human behaviour is learned, thus people can be taught. 4. Beliefs - the thoughts people hold about something based on knowledge, faith or opinion. 5. Attitude - people’s evaluations, feelings, and tendencies to perceive and behave in a consistent way toward certain objects. Attitudes decide whether people are going to like or dislike certain objects, ideas, or people. Attitudes are developed during childhoold and are formed and adjusted during adulthood.

Buying Decision Making Process

Decision Process!

Figure 8: The influence of Buyer’s personal and Psychological Characteristics on the Decision process!Source: Reisinger, 2009!

Stage 1 - Need Recognition It is a stage where potential buyers recognise a need when is faced with a problem. The recognition of a need or problem can be triggered by internal or external stimuli. Potential buyers may have different types of needs or problems that lead them to purchase: 1) simple need recognition - occurs frequently and can be dealt with easily and automatically; 2) Complex need recognition - develops over a longer period of time and may change the actual state buyer to the desired state buyer.

Stage 2 - Information search Potential buyers feel the need to make a purchase, so they begin to search for information about a product. If the need is strong enough and can be satisfied by a purchase, they buyer will probably not need to search for information and make the purchase right away. Potential buyers can search for information in two different ways: 1) some buyers perform a simple information search; 2) some buyers perform an intensive and complex information search. Also, potential buyers can search for information: 1) actively - the actively way of searching for information include referring to past information or personal experiences, asking friends for advice, reading brochures and consulting others who have experience with the products before; 2) passively - passive buyers are not highly involve the buyer in a purchase. Rather, they learn about the product from watching TV commercials, listening to the radio, or looking at billboards beside the road.

In addition to this, information sources can be classified as the following:!

Personal commercial sources:!-sales representatives!-dealers!-agents!

Personal non-commercial sources:!-families!-relatives!-friends!-neighbours!-acquaintances or co-workers!

Impersonal commercial sources:!-commercial advertising!-direct mail!-product packaging!-displays!

Impersonal non-commercial sources:!-newspaper and magazine articles!-travel reports!-restaurant reviews!-editorials in travel sections!-consumer-rating organisation!

Figure 9: Information sources!Sources: Adapted from Reisinger, Y. (2009)!

Stage 3 - Alternatives Evaluation At this stage, potential buyers use the collected information to evaluate the product and its available alternatives. It should be noted that for buyers to make decision (evaluation) of whether or not to purchase a particular product/destination, it depends on: 1. Information available; 2. People who involve with the buying process 3. Traits and personally/types of buyers 4. Level of involvement

1. Level of information - buyers develop images about the product/destinations based on information available. Usually, perspective buyers form three different sets of option. They are: Evoked or consideration set - a small number of products or their brands that potential buyers are familiar with (known products) Inept set - prospective buyers exclude certain products and their types from purchase. Some products are excluded from the list because they are: 1) unknown - poorly exposed through media and advertising; 2) unacceptable - have poor features; 3) overlooked- have not been clearly positioned in the target market; or 4) unable to fully meet the buyer’s needs. Inert set - potential buyers feel indifferent towards some products or destinations that do not have any special features or benefits to offer.

Figure 10: Types of products from which consumers make selection!Source: Resingler, Y. (2009: 310)!

2. People who involve with the buying process - there are also numerous other situation factors that can influence product/destination evaluation and the final purchase decision. People may play different roles in buying decision:

1. The initiator - person who first recognises the need for the product and services 2. The influencer - people who influence the decision about which product to buy 3. The decider - person who has authority for a final purchasing decision and decides whether to buy or not to buy 4. The purchaser - person who authorises payment for the product or spends money on it 5. The users - these are the people who actually use the product.

3. Traits and personally/types of buyers - another factor that may influence the buying decision are the type of the buyer. Different buyers who have different attitude to buying and different degree of readiness tend to be at different stages of readiness to buy.

1. Innovators - the first buyers. they are eager to buy new products and travel to new destinations 2. Early adopters - the second, after innovators, who want to experience new destinations and try new products. 3. Early majority - are those who interested in new products/destinations, however, they wait and see to determine whether the new products/destinations are just a short-term trendy fad or can really enhance their lives. 4. Late majority - are similar to early majority, however, they are more sceptical. They want to see whether the products/destinations have established reputation before they purchase it. 5. Laggards - they do not interest in new products. They are sceptics and tradition bound. They are the last customers to buy new products.

4. Level of involvement - lastly, the degree of involvement of an individual in decision-making and the effort needed to make a decision can be varied. There are three levels of involvement: !

1. Routinised or habitual decision making - takes place when buyers have some experience with the product, well established criteria with which they evaluate the product, and a sufficient information about it. 2. Limited decision-making - takes place when buyers are familiar with a product and have established the criteria for product evaluation. However, they are not familiar with all product features and have not decided yet which product they prefer. 3. Extensive or complex decision-making - occurs when there are a large number of products with which buyers are not familiar and alternatives to choose from.

Stage 4 - Purchase Decision

It is a stage where buyers develop intentions to purchase. They may make three types of purchase:

1. Trial purchase - a buyer opts for a trial purchase when she/he purchases a product for the first time, often without commitment. At this stage, buyer explorers and evaluates the product by purchasing a smaller quantity than usual. 2. Repeat purchase - when buyers are happy about the trial, and the product meets their approval, they are willing to purchase it again in large quantities or more frequently. At this stage buyers are likely to repeat the purchase, buyers may go for a repeat purchase and develop product loyalty which guarantees long-term commitment to it.

These two types of buyers are likely to influence the third type of buyer, which is: 3. A long-term commitment purchase

Stage 5 - Post-Purchase Behaviour At this stage, buyers must decide whether to re-purchase a product. The decision is significantly influenced by the buyer’s evaluation of the product/destination and post-purchase satisfaction with it. The buyer compares his/her own experiences with the product with initial expectations. There are: 1. Buyers’ expectations match buyers’ experiences with the product, resulting in neutral feeling 2. Buyer’s experiences exceed his/her expectations, causing confirmation of expectations, which leads to satisfaction with purchase; and 3. Buyers’ expectations exceed his/her experiences, causing disconfirmation of expectations, which leads to dissatisfaction with purchase.

Further reading!

"   Bowie, D. and Buttle, F. (2004). Hospitality Marketing: An Introduction. Oxford: Elsevier.!

"   Reisinger, Y. (2009). International Tourism: Cultures and Behavior. Oxford: Butterworth Heinemann!