Table of content

Introduction: 2

1.Importance of Consumer Behavior in Tourism and Hospitality Industry 2

1.1 Buying behavior process in Tourism and Hospitality 2

1.2 People who are important in Buying Process 3

1.3 Purchasing process of Organization: 4

Appoint Purchase Team: 5

Specify Technical Specifications: 5

Budget for Purchase: 5

Research Potential Suppliers: 5

Solicit Bids: 5

Award Contract: 5

1.4 Difference between consumer and organizational buying: 5

1.5 Factors influencing consumer and organizational buying behavior 6

2. Evaluating the elements of promotional mix and integration within managementplanning 8

2.1 Promotional techniques to be used in Travel and Tourism: 8

2.2 Advantages and disadvantages of Promotion mix: 9

2.3 Effective tourism and hospitality promotion campaign: 9

2.4 Evaluation of DAGMAR and AIDA promotional models: 10

3. Importance of customers and customer service and application of principles ofcustomer care to the tourism and hospitality industry 11

3.1 Customer service and quality: 11

3.2 Issues related to customer service and consumer expectations: 12

3.3 Systems and processes in tourism and hospitality industry and ways to improveservice quality 14

4. Understanding customer behavior and customer relationship management 15

4.1 Range of different tool required to communicate: 15

4.2 Communication with people in and outside of organization: 15

Oral 15

Nonverbal 16

4.3 Communication model and barriers to effective communication 16

Conclusion & Recommendation: 17

Reference 18

Introduction:

Tourism is one of the world’s largest economic sectors1 and one

that continues to expand very rapidly, tourism development can be

a powerful tool for economic growth, poverty reduction, and for

the conservation of natural and cultural resources. While tourism

represents an important development opportunity for many

countries and communities, it can also have very negative

impacts, such as disrupting social structures, harming the socio-

cultural authenticity of host communities, and threatening

natural and cultural heritage. Wise planning and management of

tourism development is key to keeping it a force for good.

1.Importance of Consumer Behavior in Tourism and Hospitality Industry

1.1 Buying behavior process in Tourism and Hospitality

Buyer decision processer are the decision making process

undertaken by consumers in regard to a potential markets

transaction before, during and after the purchase of product and

service.

Five stages of consumer buying behavior process are:

Problem recognition :

Problem recognition occurs when a consumer is faced with an

unsatisfied need (the need for a holiday) and desires a fulfilled

outcome the satisfies this need. Problem recognition is triggered

by either external stimuli (advertisement) or internal

stimuli(hunger or thirst).

Information research:

The information search involves exposure to different sources,

such as promotional material and displays of the product,

actively researching the product, or relying on historic

information in the consumers mind, such as preconceived ideas

about a product or a previous experience (good or bad) with such

a product.

Alternative evolution:

Consumers will evaluate different products or brands at this

stage on the basis of alternative product attributes – those

which have the ability to deliver the benefits the customer is

seeking. A factor that heavily influences this stage is the

customer’s attitude. Involvement is another factor that

influences the evaluation process. 

Purchase decision:

The penultimate stage is where the purchase takes place. Philip

Kotler (2009) states that the final purchase decision may be

‘disrupted’ by two factors: negative feedback from other

customers and the level of motivation to accept the feedback.

Post purchase behavior:

 Customers will compare products with their previous expectations

and will be either satisfied or dissatisfied.

1.2 People who are important in Buying Process

Initiator

Initiators are the players who recognize that there is a need to

be satisfied or a problem to be solved. This might come from a

drive for efficiency due to the fact that some equipment will

need replacing. There could be many reasons which stimulate the

initiation.

Gatekeepers:

Gatekeepers are individuals who press the stop/go button in the

process. Often gatekeepers will be proactive in searching for

information and delivering recommendations for those decision

makers further up the line.

Buyers:

Buyers are the professional function within an organization

generally responsible for purchasing. They are given a brief with

a series of criteria against which to judge potential products or

services, and their suppliers. They tend to be responsible for

sourcing and negotiation.

Decider:

Deciders in a large organization certainly are responsible for

making the final deal or decision. Their role carries the

responsibility of placing the final order. They might be senior

managers or agents acting on behalf of an organization in the

market.

Users:

Users are those who put the service or product into operations

once the deal has been clinched. Their opinions will be important

especially if they are using manufacturing equipment, using

software to improve customer satisfaction, and so on

Influencers:

Influencers are those who may have a persuasive role in relation

to the deciders. They may ne specialists who make recommendation

based on experience and their knowledge of product and service.

Example: consultants employed by businesses to help deciders make

a final decision.

1.3 Purchasing process of Organization:

Identify need:

Identify the need for a product purchase. For example, a lawn

company wants to offer mowing services to its clients. To do this

it needs to purchase a mower . thus , the need to make a purchase

of a product , a mower is identified.

Select specific product:

Select a specific product to meet the need. . For example the

lawn company must select which type of mower from the many push

and riding varieties on the market meets the company’s need for a

mower the best.

Appoint Purchase Team:

Put a team together to manage the purchase process, including

finalizing the list of required technical specifications for the

product and the bid solicitation and award process.

Specify Technical Specifications:

Arrive at a list of required technical specifications for the

product to ensure it meets the company’s needs.

Budget for Purchase:

Establish a budget for the purchase relying on the range of

prices identified by the research done in Step 3.

Research Potential Suppliers:

Research the various product types that fit the need along with

their suppliers to identify the most durable model at the best

price. If the lawn company decides to purchase a riding mower,

research is conducted into which brand and manufacturer provides

the most durable product for the price asked.

Solicit Bids:

Solicit bids from the manufacturers and suppliers of the

identified product that meets all the required technical

specifications.

Award Contract:

Select a supplier from the bids submitted and award the purchase

contract.

1.4 Difference between consumer and organizational buying:

Why Goods are Purchased

Organizations purchase goods to use in their ongoing operations

and to resell to consumers, while consumers purchase goods for

their personal use. Organizations also purchase more raw

materials, such as wood, steel and other items used in

manufacturing, than individuals who don't have the tools or

knowledge to put those raw materials to use as a product.

Organizations generally purchase goods in larger volumes than

individuals and are driven by customer demand and need for

manufacturing materials. Consumers, on the other hand, are driven

both by need and by want.

Bulk Buys

Organizations often purchase in bulk, whereas consumers typically

do not. For example, a consumer might buy three gallons of white

paint to paint his house while an organization might need 3,000

gallons to paint shelving units for resale.

Choices and Use

Consumers typically purchase goods for different reasons than

organizations and have more freedom in choosing the items they

want. A consumer may purchase a chair so people can sit

comfortably in his home. He will be able to choose any chair

within his budget that he likes. An organization, on the other

hand, may purchase a chair because an administrative assistant

needs it to do his job. The organization may be restricted in a

chair purchase, not only by the budget set by a purchasing

manager, but also by guidelines set by the Occupational Health

and Safety Administration (OSHA), and by company-wide guidelines

on office furniture.

1.5 Factors influencing consumer and organizational buying behavior

The organizational buyer is influenced by a wide array of forces

inside and outside organization. Knowledge of these forces

provides the marketer with a foundation on which to build

responsive industrial marketing strategies. These forces includes

environmental forces (e.g. Health of the economy); organizational

forces (e.g. size of buying organization); group forces (e.g.

composition and roles of members); and individual forces (e.g.

personal preferences). Each of these areas constitutes a sphere

of influence that encircles organizational buying decisions.

Environmental Forces:

Everything is influenced by its environment. Organizational

buying behavior is not out of this. Organization buying behavior

is affected by changing business conditions, new invention of

technology and new creation of law. The boundaries of buyer-

seller interaction are selected by environment.

Organizational forces:

Individual decision maker can be influenced in different way.

Every organization has different personalities. So the sales

personal must be conscious about the climate and culture of the

organization and also to that level of management where

purchasing decision made. Climate and status of purchasing within

an organization vary from firm to firm.

Group forces:

The organizational buying process consist of a complex set of

smaller decision influence by several individuals. The degree of

involvement of group members in the procurement process varies

from routine rebuy. In the new task buying situation group plays

an important role.

Individual forces:

Individual makes buying decision rather than organization. Each

individual involves in the buying decision have different learned

experienced organizational function and perception for achieving

personal and organizational goal.

2. Evaluating the elements of promotional mix and integration within management planning

2.1 Promotional techniques to be used in Travel and Tourism:

There are five techniques that can be used to promote in tourism

Advertising:

Advertising is any paid form of nonpersonal presentation and

promotion of ideas, goods, or services by an identified sponsor.

The three key words in this definition are “paid”, “nonpersonal”

and “identified sponsor.” Paid - hospitality and travel

organizations always have to pay for advertising, either in money

or in some form of barter (e.g., free meals from a restaurant in

exchange for a radio ad). Nonpersonal - neither the sponsors nor

their representatives are physically present to give the message

to customers

Personal Selling:

Personal selling involves oral conversations. These are, either

by telephone or face-to-face, between salespersons and

prospective customers. This sort selling may be used by a non-

profit-making museum as well as by a conference manager of a

large hotel.

Sales promotion:

Sales promotions are approaches where customers are given a short

term incentive to make an immediate purchase. Sales promotion

campaign adds value to the product because the incentives dose

not normally accompanies the product. Like advertising, the

sponsors is clearly identified and the communication in not

personal. Example includes discount coupons, contest, samples

and premiums.

Merchandising:

Merchandising or point-of-purchase “advertising” includes

materials used in-house to stimulate sales. These include menus,

wine lists, signs, posters, displays, and other point-of-sale

promotional items (in-room materials).

Public relations:

Public relation includes all the activities that a hospitality

and travel organization engaged in to maintain or improve its

relationship with other organizations and individuals. Publicity

is one public relations technique that involves nonpaid

communication of information about an organization’s service.

2.2 Advantages and disadvantages of Promotion mix:

Advertising is good for building awareness and effective at

reaching a wide audience. The repetition of main brand and

product positioning helps building in customer trust. As

advertising is impersonal it cannot answer all customer quarries.

And advertising is not good at getting customers to make a final

purchase decision.

Personal selling creates lots of communication between the buyer

and seller, it’s excellent for communicating complex or detailed

product information with the customers. But employing a sales

force has many hidden cost in addition to wages and it’s not

suitable if there are huge amount of potential buyers.

Sales promotion can stimulate quick increase in sales by

targeting promotional incentives on particular products and it’s

a good short term tactical tool. If sales promotion is used over

the long term, customers may get used to the effect and too much

promotion may damage the brand image.

Public relation is often seen as more credible, as the massage

seems to come from a third party (magazine, newspaper). It’s

cheap way to reach many customers. There is still risk of losing

control over what other write or say about the product.

2.3 Effective tourism and hospitality promotion campaign:

A promotion campaign is a series of messages that share a single

idea and theme which make up an integrated marketing

communication (IMC). Promotion campaigns appear in different

media across a specific time frame of frequent flyers points. The

critical part of making a promotion campaign is determining

a campaign theme as it sets the tone for the individual messages

and other forms of marketing communications that will be used.

The campaign theme is the central message that will be

communicated in the promotional activities. The campaign themes

are usually developed with the intention of being used for a

substantial period but many of them are short lived due to

factors such as being ineffective or market conditions and/or

competition in the marketplace and marketing mix. As example we

can say, In India and the Ministry of Tourism launched a campaign

to promote Incredible India as a tourist destination in 2002.The

phrase "Incredible India" was adopted as a slogan by the

ministry. Before 2002, the Indian government regularly formulated

policies and prepared pamphlets and brochures for the promotion

of tourism, however, it did not support tourism in a concerted

fashion. However, in 2002, the tourism ministry made a conscious

effort to bring in more professionalism in its attempts to

promote tourism. It formulated an integrated communication

strategy with the aim of promoting India as a destination of

choice for the discerning traveler. The tourism ministry engaged

the services of advertising and marketing firm Ogilvy & Mather

(India) (O&M) to create a new campaign to increase tourist

inflows into the country.

2.4 Evaluation of DAGMAR and AIDA promotional models:

DAGMAR model

A marketing approach used to measure the results of an

advertising campaign. DAGMAR is an acronym: Defining Advertising

Goals for Measured Advertising Results. The approach involves

setting specific, measurable objectives for a campaign to

determine if specific objectives were met. Specifically, DAGMAR

seeks to communicate a specific massage through four steps:

1. Awareness

2. Comprehension

3. Conviction

4. Action

DAGMAR as an approach was first proposed by Russell Colley in a

1961 report to the Association of National Advertisers. Collay

proposed that the real goal of advertising was to communicate,

not to sell specifically. By determining if the consumer had

sufficient knowledge of a product and its benefits by creating

clear, specific objectives that are discussed within an

advertisement, advertisers would be able to tell if their selling

points made a difference in the consumer's decision-making

process.

AIDA model 

The AIDA model is the acronym of a consumer marketing model by

Elias St. Elmo Lewis that describes 4 essential steps in an

advertisement:

Attention: attract the attention of the potential customers.

Interest: create interest, for example by making a promise or an

attractive offer.

Desire: transfer the interest into a desire or preference for the

product by showing its ability to satisfy needs.

Action: push the customer to actually by the product.

3. Importance of customers and customer service and application of principles of customer care to the tourism and hospitality industry

3.1 Customer service and quality:

Service quality has been defined as a gap between the customer’s

expectations of a service and the customer’s perceptions of the

service received(Parasuramanetal.,1985). The consumer

satisfaction literature views these expectations as predictions

about what is likely to happen during an impending transaction,

whereas the service quality literature views them as desires or

wants expressed by the consumer (Kandampully,2002). To date,

“there is no universal, parsimonious, or all-encompassing

definition or model of service quality” (Reeves & Bednard, 1994,

p. 436). Grönroos (1984) defines service quality as “the outcome

of an evaluation process where the consumer compares his

expectations with the service he perceived he has received” (p.

37). Definitions of quality have included: a) satisfying or

delighting the customer or exceeding expectations; b) product of

service features that satisfy stated or implied needs; c)

conformance to clearly specified requirements; and d) fitness for

use, whereby the product meets the customers needs and is free of

deficiencies (Chelladurai& Chang,2000).

The tourism literature has revealed various attempts to make

sense of how tourists evaluate the quality of services they

receive while on vacation (Atilgan, Akinci, & Aksoy, 2003; Baker

& Crompton, 2000; Chadee & Mattsson, 1996; Frochot, 2004; Hudson,

Hudson, & Miller,2004; Vogt & Fesenmaier, 1995; Weirmair & Fuchs,

1999), travel agency quality (Ryan& Cliff, 1997), hotel quality

(Suh, Lee, Park, & Shin, 1997) and so forth. However, as Frochot

(2004) points out, “the nature of tourism services, based as much

on the sale of utilitarian services as on the provision of

service through which consumers can achieve deep-rooted needs,

renders its evaluation reasonably complex” (p. 224).

Tourist satisfaction can be obtained by assessing the gap between

predicted and perceived service. The destination image can be

determined by analyzing tourist perceptions (p. 399-411). Atilgan

et al. (2003) suggest that cultural characteristics have an

effect on perceptions of service quality in tourism. They found

that different cultural groups can have different levels of

expectations and perceptions in terms of service-quality

dimensions (p 420). Therefore, many of the items on the SERVQUAL

instrument can be salient to different customers for different

reasons. Brown and Bond III (1995) attribute the importance of

these items as to whether or not the customer is conscious of

aspects such as time, quality of work, finances, and so forth (p.

30).

3.2 Issues related to customer service and consumer expectations:

Understanding the following customer expectation is critical

measuring customer satisfaction:

Explicit expectation

Explicit expectations are mental targets for product performance,

such as well-identified performance standards.

Implicit expectation

Implicit expectation reflects established norms of performance.

Implicit expectations are established by business in general,

other companies, industries and even cultures.

Static performance expectation

Static performance expectations address how performance and

quality are defined fir a specific application. Performance

measures related to quality to outcome may include the evaluation

of accessibility, customization, dependability, timeliness,

accuracy and user friendly interfaces.

Dynamic performance expectation

Dynamic performance expectations are about how the product or

service is expected to evolve over time. Dynamic expectations

maybe about the changes in support, product, or service needed to

meet future business or use environments.

Technological expectation

Technological expectation focus on the evolving state of the

product category.

Interpersonal skill

Interpersonal expectation reflects the relationship between the

customer and the product or service provider. Person to person

relationships are increasingly important, especially where

products require support for proper use and functioning.

Situational expectation

In building a customer satisfaction survey, it is also helpful to

evaluate why pre-purchase expectations or post-purchase

satisfaction may or may not be fulfilled or even measurable.

Customer service:

Ultimately, the best method of resolving simple problems - often

before they arise - is through the delivery of excellent customer

service. By ensuring a close relationship with the customer,

knowing their wants and needs and avoiding any misunderstandings,

a company is able to ensure that problems of a non-technical

nature are minimized, often before they even arise.

Customer support

Automation

Customer support automation involves the building of a knowledge

base of known issues and their resolutions to support incidents

with delivery mechanisms, often by expert systems. A service

automation platform includes a suite of support solutions

including proactive support, assisted support, and self support.

Tech support

Tech support refers to a range of services by which companies

provide assistance to users of technology products such as mobile

phones, televisions, computers, software products, or other

electronic or mechanical goods.

3.3 Systems and processes in tourism and hospitality industry andways to improve service quality

Quality service is a management tool that provides companies with

a means of monitoring

service from the customers’ perspective. Quality assurance refers

to any planned and systematic activity directed towards providing

consumers with goods and services of appropriate quality, along with

the confidence that they meet consumers’ requirements. Quality

assurance depends on excellence of two important focal points in

business: the design of goods and services and the control of

quality during execution of service delivery which is often aided

by some form of measurement and inspection activity (Evans

& Lindsay, 2010).A quality service management system is a result

oriented approach. It deals with the service characteristics that

really matter to end-users; it addresses service providers who

have tangible results to expose to end-users (consumers); it

guarantees the customers the high quality of service they can

receive during their stay in lodging and it provides staff with

methodology to show commitment to quality service (Reyad,2005).

Regular and systematic analysis of the evaluation results may

lead to a wide range of advantages, amongst them:

Measuring the matching degree of  customers’ needs and

expectations, and comparing the results with perceived

quality,

Acting as a basis for the strategic process, identifying

improvement activities; and

Controlling competitiveness in quality with the help of

benchmarking (Soteriadis, 2006).

Measuring quality service and quality assurance is a long-term

consistency, which also represents a cost, but a welcomed and a

lower one than that of non-quality. The managers should identify,

record and weigh up the impacts of quality cost-profit. The main

categories of quality costs are: prevention (setting up) costs;

assurance (staff time and administrative) costs; external

costs(or failure costs), (Johns, 1997).Considering all the above

each manager will be in a position to priorities towards a

quality improvement process. The Cost-Benefit ratio of quality

could be achieved through an equation of non-quality costs and of

quality assurance towards the benefits of operational cost

savings as well as guest return rate and word of mouth

recommendation (Kapiki & Tatari, 2006).

4. Understanding customer behavior and customer relationship management

4.1 Range of different tool required to communicate:

The tools required to communicate with the consumers could be

advertisement, through sales person, sales promotion or through

the cloud networking. Through advertisement customers get aware

about the product a organization is providing, by personal

selling and sales promotion consumer get able to know about

products more effectively and it helps to take the customer there

final decision about the product weather to buy or not. The most

recent development in tourism industry is the introduction of

cloud networks. Through this the customers can easily assess the

product of desired organization. They can verify product quality

by comparing with other product, and it enables a consumer to get

better service and quality from the organizations.

4.2 Communication with people in and outside of organization:

Oral

Oral communication makes up the bulk of business communication

today. Given the collaborative nature of businesses, the ability

to work efficiently with a team makes oral communication

imperative for success. Voicemail, phone calls, meetings and

client interactions all require finesse with the spoken word.

Effectively communicating orally requires knowledge of the topic

at hand, critical thinking ability and great interpersonal

skills. Those skilled with oral communication are also typically

good listeners who pay attention to verbal and nonverbal

communication clues.

Nonverbal

People communicate nonverbally via body language and facial

expressions. Eye contact, gestures and proximity to the speaker

are all examples of nonverbal communication. Most of the time,

the nonverbal communication people exhibit happens subconsciously

or unintentionally. It's important to pay attention to your body

language and posture when speaking or listening to someone else.

What you don't say can have just as big an impact as what you do.

4.3 Communication model and barriers to effective communication

Models of communication refer to the conceptual model used to

explain the human communication process. The first major model

for communication came in 1949 by Claude Elwood

Shannon and Warren Weaver for Bell Laboratories Following the

basic concept, communication is the process of sending and

receiving messages or transferring information from one part

(sender) to another (receiver).

The models of communication are:

Shannon and Weaver Model

Constructionist Model

Linear model

Convergence model

The barriers to effective communication are:

Physiological Barrier

Physical and Environmental Distractions

Psychological Barrier

Social Barriers

Cultural Barriers

Semantic Barrier

Linguistic Barriers

Past Experience

Organizational Barriers

Barriers Related with the Message

Conclusion & Recommendation:

Tourism has been one of the world's fastest growing industries,

and there are large societies entirely dependent upon the visitor

for their sustenance. Tourism is the world's largest industry. It

sustained 120 million jobs in 1995, accounting for 7% of the

global workforce. It is estimated that the number of

international travelers in 1994 will double to 1 billion by 2010,

and 80% of tourists come from the 20 richest countries. To

control and provide effective service to this huge number of

customers organizations will need effectively planned ways of

communication. To develop tourism and provide service quality

effective communication medium should be developed. Which help

the customers to be satisfied and develop tourism from earned

revenue.

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