Consumer behavior is fundamental in marketing and business strategy. Consumer studies is therefore a very important area when it comes to tourism. The reason behind this is because tourism is a global industry and customer preferences and taste varies from one customer to the other (Oxford Successful Consumer Studies, 2013).
The first step into earning customers is therefore coming up with ideas on what most customers want and why they want what they want and at the same time establishing the technique that will enable the business to earn more customers.
By earning new customers, the business should also aim at maintaining their customers as well. Proper understanding of the theories that explain consumer behavior is a trick that will solve all the dilemmas.
Crucial issues such as customer attitudes before and after shopping, emotional attributes in shopping and group activity in comparison to individual activity and their roles in service can be properly addressed. All this knowledge helps in marketing and improving sales.
Consumer studies simplifies the pursuit of the industry in understanding customer needs. Consumer behavior in tourism can be explained by the following theories:
This is a theory formulated in the late 60’s by Martin Fishbein and Icek Ajzen. This is a theory in which Fishbein highlights that all consumers are rational in nature. And so are all humans. Rational means that all consumers undertake actions that they consider as being of the best results to them. This can be simplified in terms of input and the final outcome.
In the tourism industry for example, tourists will go for the option that will bring maximum benefits in return. The decision-making process of the consumer is shaped by their already established attitude towards the decision at hand (Chon et al., 2012). This means that previous encounters and recommendations from others will influence customer attitude. When marketing services offered, the tourism industry should convince the consumers that their purchase will meet their personal expectations because consumers will always act to their best of interests.
This model is just an improvement version of the theory of Reasoned action. This model expounds more on consumer as being a process rather than just a rational act as highlighted in the theory of Reasoned Action. This theory simplifies the entire process as a procedure with five steps. Step number one is the input stage. This is the point whereby the consumer learns more about a service or product from various sources and media. The second phase is the data collection phase. In this phase, the consumer analyses the information collected. The next thing is comparison stage where the consumer compares and matches the input, they put in against what they get in return together with their personal expectations. With aid of previous experiences, the consumer then decides with regard to how rational the decision is.
In tourism, this model plays a huge role in determining when best to utilize marketing strategies. The model clearly displays the impact that information from the media and other sources drives the consumer in wanting to make a purchase. This means that the marketer should share relevant to the customer expectations. This will make them considering seeking your product. At the decision-making phase, the consumer needs to feel good using the product and that is why the industry should form that good feeling using the service.
As depicted in the Maslow hierarchy of needs, humans meet their needs in a form of a sequence based on prioritizing the needs on the grounds of urgency in the order of physiological, security, love, self-esteem, and self-actualization (Perdue., & Uysal, 2004). This knowledge can be utilized well by making the tourist consumers feel as if they are fulfilling something in their hierarchy of needs. This will inspire the consumer to make the purchase a priority. The needs at the bottom most of the hierarchy tree are rendered most important to the consumer and therefore the sense of urgency is created compelling them to accomplish them first. Tourists will always be motivated to seek your service if the sense of security for themselves and their families is promised.
The journey of the study of consumer needs long. The history of consumer studies and the history of marketing are hard to separate (Burger, Augustyn, & Kotzenberg, 2011). With time, the entire idea of business marketing and consumer studies has evolved from a doctrine-shaped field to a customer-oriented study. This study is more focused on the customer experience in the field and not just the theoretical part of it.
The study of consumer behavior has therefore incorporated other fields of study into the study of human emotions and attitudes and how they affect the way customers behave. Fields of psychology such as organizational and social behavior and economics form a major pillar in studying consumer behavior.
Behavioral schools of consumer behavior and marketing have also adopted psychographics and lifestyle research in determining customer traits and future taste and revolutions in the industry. All these are very important in understanding consumer behavior. Eventually, consumer studies has maintained its focus on customer needs and expectations and the trend has since been adopted into different sectors as well.
Tourism has really evolved. What was earlier on treated as a luxury is now a basic part of human needs. The tourism industry is more open than earlier on. This section gives an overview of the trends that are constantly shaping consumer studies in the tourism industry.
1. Personalization in tourism
The rise in personalized travel options has caused a revolution in the tourism industry. Tourists are more concerned with what they experience during their adventure and not just the passive old thing. The culture of simply booking and traveling is long-gone. According to (Chon, Pizam, & Mansfeld, 2012), adventurers are in pursuit of experiences that are tailored to their own desires and expectations. Despite a majority of tourists being reliant on travel agencies, most are of the idea of tours made for them or simply those that met their personal needs.
2. Dynamics of Tourism
The tourism industry is very dynamic. The taste and references of tourists keep evolving (Dixit, 2017). Travelling was once a luxury but due to globalization and elimination of travel restrictions. The low costs of travelling in modern world have also favored tourism. There has also been a rise in the income for the middle-class economy leaving them with disposable income which most of them seek to use in tourism. The initial perception of travel and adventure as a trait for the rich has slowly changed. Many are willing to travel. This makes them the emerging market and the rise in tourism has seen the entire industry change over time. The population being termed as an emerging market will with time rise to a large market and this is even a sign that the industry is under constant growth. The emerging market being mainly made up of millennials is about to get even more complex (pg. 22).
Growth in technology is still transforming our daily lives right from how we network with other people around the world, how we live in our communities and even our workplaces. Improvement in technology has caused improvement in security around the globe. Security devices such as trackers, biometrics all found in airports have maximized security during travel. There is also increased communication and it is therefore easy to book for services as well as performing research on tourist destinations so as to identify if they suit the tourist’s needs (pg.13). With the increased boom in technology, it is also easy to seek reviews from others who have been to a place you wish to visit and from their experiences one can conclude whether the destination is good to visit or not.
Globalization has sort of transformed the world into a small networked village. It is easy to move from one place to another with minimum restrictions. All someone needs are identification documents to be on the right side of the law. Otherwise, it is easier to travel all over the globe to whichever destination wishes to visit.
Collaborative economy is the idea that was first echoed in 1978 and became a thing when eBay was being launched. This is an idea of a shared economy in which customers obtain what they desire amongst themselves rather than consumers being forced to seek these services from large organizations every time. The idea of a shared economy has a fair share of its supporters and its critics. It is time to realize the huge benefits that come with this idea. At this age, the idea of a collaborative economy has become an important part of our daily lives. The idea has become viable to be Implemented in the modern world we live in. It is time people and investors get ready for this revolution in the business world. This concept can be quite confusing but in simple terms, it is more of what was termed as renting services (Bishop, 2014). The entire concept revolves around a business environment where resources are shared.
Prior to the emergence of the concept of a shared economy, the tourism industry was being controlled by tourism agencies and hotels. However, this new concept is bringing about a revolution in the tourism industry by a growth of individuals who prefer to share resources. This sharing concept is in the form of hiring and renting of resources and property temporarily (Marin et al., 2019). The services that were now being offered by just specific institutions are now being offered by a generation of those willing to share. These services are therefore being accessed at even cheaper prices. In tourism for example, there are individuals who are in the sharing economy business ready to offer their cars for use in tours, others provide their houses for accommodation purposes. It is not only tangible products that are involved in the trade but also services. There are individuals specializing in catering and other services. The travel industry has therefore been opened up to most of the population and it is affordable in consideration to this capitalistic economy.
Collaborative economies generate a significant amount of revenue for the European Union with the largest share being traced to the tourism industry.
The concept of shared economies is a big boom in the world at this moment. With increased globalization and increased rise in the number of capitalistic economies, collaborative economies are a big deal of a business. The advantages that come with it can be viewed from different dimensions. They include:
a. Improved Policy making
With this concept already being adopted in large economies, the chances of it going global are high and therefore could greatly affect business. The rise in challenges such as insecurity and climate change globally are one of the reasons why this concept could be very helpful. The sense that the relationship established in a shared economy is between consumers brings abut the feeling of equality rather than classes. The making of policy is therefore more likely to be in favor of the consumers because they are the role players in the industry. There is trust that develops between the members of the community as well. There are less chances of exploitation by large monopolistic corporations.
“The sharing economy has its advocates and its critics, but it’s time to realize that it has become a viable and exciting part of the world we live in. Local and regional authorities have to prepare for the boom of sharing economy, to build up regulations that can integrate this type of economic activity” (Oxford Successful Consumer Studies. 2013).
b. Development in Alternate Markets
Prior to the rise of the idea of a shared economy, having to travel meant that one has to prepare to handle the whole process by themselves. With time, the development of the sharing of resources has brought about the idea of money and resource-lending apps and institutions. These apps are readily available, and they can be relied upon for funding. The process is now easier rather than in the past when one was forced to save for long just to get what they wanted to purchase. These apps support fundraising activities for travelers looking to go on adventures on website like GoFundMe and get enough for the adventure. This idea in this case has led to the development of borrowing apps and websites as well as developing tourism (Dredge & Gyimóthy, 2017).
In all major cities, getting trustworthy means of transport is one of the most common challenges for tourists. This whole idea of a new environment can be terrifying. However, the problem has been controlled by the invention of ride sharing companies such as Uber (Marin et al., 2019). These services can be accessed from an app on the mobile phone and this is a guarantee for safety and security for the tourists in a new environment.
The tracking technology installed on the uber cabs makes it easy to curb insecurity and this has really controlled the rate of cab scams and insecurity for the tourists. On the other hand, as much as tourism has been impacted positively by the ride sharing services which is a popular form of collaborative economy, the technology has also brought about positive improvement in other industries. The technology sector is a huge beneficiary. Companies in the mobile app development industry earn from developing such ride hailing apps. Insecurity is successfully eliminated and therefore with the assurance of security for the tourists makes tourism more profitable. The transport providers also get a share of the income generated from tourism by selling their services to these tourists.
c. Sustainability in customer service
With the availability of several service providing parties in the market, Tourists can have a chance to seek services from the agencies and individuals they consider the best. This freedom of choice is what makes the services received to be the best. The consumer gets a chance to get services from the persons they trust and at the same time have a variety to choose from. The other benefit is that most service providers are freelancers. The consumer can seek services from more than one. They can tailor their preferences such that they can have one individual offering accommodation, another one for transport, a different one for food and many other preferences (Bishop, 2014).
In the traditional tourism industry where the tourist hotel provides meals, accommodation tour guides and taxi. This in most times ended up in financial constraints on the side of the adventurer. This also discouraged long visits because the services provided by tourist destinations are so expensive. In the world of shared economy with the likes of Airbnb, tourists can seek accommodation from local providers and pay less. This will allow them to share expenses by sharing the resources as a group. This is more affordable and therefore their stay is more enjoyable and easier to cater for. The diversity in the market is a wakeup call to all service providers to deliver the best.
The concept of shared economies has several negative impacts on the economy as well as other sectors.
1. Loss of employment– As a result of increased verge of people into freelancing, the industries that once relied on the tourism sector to sell their services are at risk of collapse. This puts the employment of most of the employees in the tourism industry at risk. If the input is less compared to the income generated in any institution that specialized in handling tourists, that means that the company has to lay some employees off and that leaves a majority without a source of livelihood (Cruz, Ganga, & Wahlen, 2018).
2. Conflict of interests – According to (Cruz et al., 2018), the increased demand for economy sharing ventures has exposed a lot of parties in the market. At such a time when the idea is still not well formulated, there is a gap in policies to govern the businesses and so the business is open to a lot of conflicting parties.