64 HOLIDAY DECISION MAKING

CONSUMER BEHAVIOUR CASE STUDY

Sonakshi

HOLIDAY DECISION MAKING

CASE STUDY NAME: SONAKSHI KALRA MISIS NO: M00427220 COURSE: MA marketing communication MODULE TITLE: Consumer Behavior MODULE CODE: MKT4050 WORD COUNT: 2675 SUPERVISOR: Dr. John Sutton

Table of Contents INTRODUCTION ........................................................................... 4 TRADITIONAL PROBLEM SOLVING MODEL ............................. 4 DOMINANT CONSUMER BEHAVIOUR MODELS ....................... 6
HOLIDAY DECISION MAKING PROCESS A COMPARISON WITH THE TRADITIONAL MODEL 8

INFORMATION SEARCH PROCESS ........................................... 9 PURCHASE PROCESS OF HOLIDAY DECISION MAKING- A COMPARISON WITH TRADITIONAL VIEW 10

FACTORS INFLUENCING BUYING BEHAVIOUR ..................... 12 CONCLUSION ............................................................................ 13 REFERENCES..14

HOLIDAY DECISION MAKING INTRODUCTION

Consumer behavior focuses on how individuals make decisions to spend their available resources such as time, money and effort on consumption related items. (Schiffman, Kanuk & Hansen, 2012,p.2) Decision-making is thus an important aspect and in general terms decision is the selection of an action from two or more alternative choices. (Schiffman & Kanuk, 1994, p. 555) It is vital to understand the decision-making process so as to market the product or services affectively. This essay aims to explain the importance of holiday decision-making and critically evaluates the traditional problem solving models of consumer decision-making process with support of the case study provided.

TRADITIONAL PROBLEM SOLVING MODEL

A number of models have been developed to understand the decision making process of individuals. The traditional problem solving cognitive model can be understood in terms of economic and cognitive view. In accordance with these views the consumers have been characterized as rational decision makers and information processors. The rational problem-solving model includes sequential five steps as shown in the diagram:
NEED RECOGNITION

POST PURCHASE

INFORMATION RESEARCH

PURCHASE

EVALUATION OF ALTERNATIVES

SOURCE: Adapted from Schiffman and Kanuk (1994)

These five steps are explained as follows: I. NEED RECOGNITION: The recognition of the need occurs when the consumer is faced with a problem. This stage implies the importance of finding the right kind of problem to be solved. II. INFORMATION RESEARCH: The second stage in the model is to find the information relevant for solving the problem. There are two types of research namely internal research, which involves recollection of past experiences, and external research, which constitute of individuals environment. III. EVALUATION OF ALTERNATIVES: The third stage is evaluating the choices developed after research to satisfy the need. It involves making a selection from sample of all possible brands (or models), which helps in decision-making. IV. PURCHASE: This is the stage where in the actual decision is taken to the satisfaction of consumer. There are three types of purchase: trial purchase, repeat purchase and long term commitment purchase. V. EVALUATION OF ALTERNATIVES: In this stage the consumer evaluates the experience which may vary from being satisfied or unsatisfied after using the product and a state of cognitive dissonance can occur incase the consumer has conflicting ideas. (Hansen et al, 2012)

The traditional models of decision making include the concept of perceived risk as consumer behavior frequently has unforeseen consequences which may not be pleasant and thus consumer tries to reduce perceived risk. (Antonides & Van Raaij, 1998, p. 7) The rational traditional model assumes the consumer to be a rational thinker and includes the sequential steps of decision making, which will be compared to the holiday decision making process as described in the case.

DOMINANT CONSUMER BEHAVIOUR MODELS

It is also important to have an understanding of three other models in the area of consumer behavior to achieve an in-depth knowledge about holiday decision making process, which are described as follows 1. HOWARD-SETH MODEL: This model by Howard and Seth (cited in D Loudan & Bitta, 1993, p.607) involves three levels that firstly has extensive problem solving wherein the consumer does not have any information about the brands or any preferences and uses external sources to gather information, second level is limited problem solving wherein the consumer has basic brand knowledge and a preference and needs additional knowledge to make decisions and the third level is habitual response where in the consumer has complete knowledge about the brands and the products. This model also includes the inputs and its variables, learning and perceptual constructs, output and external variables as well and the marketers can use this model to know about the level of knowledge the consumer has and what they are searching for so that the knowledge can be made readily available to the consumers. 2. BETTMANS INFORMATION PROCESSING MODEL: This model explains that the consumers capacity to processing information is limited and the consumers rarely analyze complex information unlike the traditional rational models. The motivation concept forms the center of the model with respect to Maslows hierarchy of need (1970). It also includes the attention and perceptual encoding which explains the importance of voluntary and involuntary attention, after this information is acquired and evaluated and the consumers store the information in their memory and use it at the time of decision making. This model also explains that decision process is affected by personality and situational factors. Bettman lastly brings the concepts of learning and of cognitive dissonance to light in this model. This model helps the managers to understand that information is to be provided in simple forms as the consumer does not go into the complexities and also that motivational factors of consumers are to be kept in the mind so that holidays can be

sold efficiently. It is also important to note that to successfully sell the holiday marketers need to grab the attention of the consumers. 3. FCB GRID MODEL: This model by Vaughn (cited in Bendixen, 1993) gives an understanding of consumers approach for buying different products. The following diagram explains the model wherein the traditional rational model falls in the category of first quadrant of learn feel-do and holiday decision making is more sense of feel -learn do and do-feel-learn sequence.

Source: Vaughn (1996) The marketers promoting holidays need to understand this model as it shows that extra effort and advertising is unlikely to increase satisfaction in the habitual and satisfaction quadrant as there can be brand loyalty and to attain success they need to overcome this obstacle by rational and emotional rhetoric.

HOLIDAY DECISION MAKING PROCESS A COMPARISON WITH THE TRADITIONAL MODEL

The case given discusses the holiday decision-making process of 27 Belgian households over the course of a year and in this section it will be compared to the traditional rational decision making model. The holiday decision-making process as studied in the case is different from the rational decision making models. Holiday decision-making does not involve structured and sequential steps of decision-making as in the traditional decision-making. It involves a passive and emotional view of consumer behavior, which is opposite to the rational and cognitive view. In passive view, consumers are considered as impulsive and irrational purchasers and the emotional view consider the emotions such as joy, fear, hope. (Hansen et al, 2012, p. 65) The case study shows that factors such as advertisements, salespersons, family and emotions of individual such as moods, day dreaming, sensory pleasures affect the holiday decision-making and the decisions are often impulsive and spontaneous rather than rational. Heracieous (1994) is of the opinion that rational decision-making models are not descriptive of the most decisions that are made in practice and in real decision situations such as the holiday decision-making there are time and financial pressures as well as cognitive limitations on human information processing capacities. According to the case study holiday decision makers evaluate choices according to the hedonic benefits implying the importance of feelings or experiential aspects of consumer behavior. (Loudon & J. Bitta, 1993, p.333) Individuals are also said to be adaptive decision makers where in the decision of holiday is affected by time constraints and number of alternatives. Adaptive model accommodates the dynamics of decision-making. It implies that consumers use different problem solving strategies according to ones personality, preferences and characteristics and it also includes the significant effects of political behavior and recognizes that most decisions are made in groups. (Smallman & Moore, 2008) The holiday decision making in the case study is based on the above hedonic and adaptive decision making views which involve the emotional, situational and administrative factors that are absent in the traditional models.

The holiday decision making in the case study thus uses the Garbage Can Model. According to garbage can model choice is fundamentally ambiguous and all the information is not used in making decisions as opposed to rational model. Decision-making is thought as a process of problem solving according to traditional models but garbage can model shows that decision-making can occur even in the absence of problem. Problems are worked upon the context of some choice, but choices are only made when shifting combination of problem, solutions and decision makers happen to make action possible and this happens often after problems have left a given choice arena or before they discovered it. (Cohen, March & Olsen, 1972) Thus the garbage can model used in the holiday decision-making process strongly differs from traditional decision-making model.

INFORMATION SEARCH PROCESS

Information research process plays an integral role in decision making of consumers. Search can be conducted to find out the products, prices, stores, brands and so on related to the products or services. Search can be categorized as pre-purchase or ongoing based on the purpose of the search and as internal and external based on its source. (Loudon & Bitta, 1993, p. 504) The internal influences include perceptions of the consumers, memory which includes their learning as well as their personality and motivation whereas the external influences include social influence including the groups, attitudes, family and their opinions, lifestyle and cultures of consumers. Information search process for holiday decision making: The holiday decision-making process is an ongoing and continuous one where the information search continues even after the holiday is booked. It is based on the hedonic consumption where emotions and sensory factors have a massive influence. It involves more internal search in the initial stages where in the individuals jog down the lane of their memory to gather information. The information search is low and an extensive search process is not carried out for holiday decisionmaking as studied in the case study. External influences become important in the later stages that include advice from relatives and

friends, online researches and information from market dominated sources. Information search process for household appliance: The information search process of household appliance like a refrigerator, the pre purchase decisions play a vital role. It has been observed that most individuals decide what to buy prior to any external search in the case of household appliances thus the internal search is the focus for decision-making and consumers are ready to buy so they require minimal amount of selling effort. (Punj, 1987) The purchase process of a refrigerator is based on functional benefits than hedonic as in the case of holiday decision-making and thus the information search for this appliance will involve a proper thinking process and a rational decision-making. The satisfaction of a previously owned brand can also have a significant affect on the information search of refrigerator. It has been seen from the above comparison that information search for holiday decision- making differs from that of household appliances and it is important for the marketers to understand these differences. It is also important to know that market dominated sources have least influence on consumer behavior when making a decision to go on a holiday and advice from friends, relatives, previous experiences with destinations and promotions play an integral role and thus the marketer should understand the importance of positive word of mouth for the success of the business. (C.Crotts, 1999, p. 156)

PURCHASE PROCESS OF HOLIDAY DECISION MAKING- A COMPARISON WITH TRADITIONAL VIEW

The evaluation and purchase process of holiday decision making as studied in the case study differs from that of traditional view. In holiday decision-making, numbers of plans are evaluated at the same time and as the information process widens and more information is gathered the

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preferences may change and a switch from one alternative to another may happen. The pre-planned techniques do not have a major affect on the purchase of holidays. The purchase of holidays is experimental and adaptive as shown by the adaptive model (Bettman et al 1991). An explanation of adaptive model can be done from the stimulus response model of buyer behavior (Middleton, 1994)
Motivation

Range of competitive produced and marketed by the tourist industry

Advertising Sales promotion Brochures Personal selling PR

Friends Family Reference Group

Learning

Demographic economic and social position Psychographic characteristic

Perception

Needs Wants Goals Attitudes

Product Brand Price Outlet

Experience

Post-purchase and post-consumption feelings

Stimulus-Response Model of Buyer Behavior Source: Middleton (1994)

This model correctly explains the adaptive nature of holiday decision makers where in the four interactive components form the basis of this model. Firstly the travel stimuli, advertisements and promotions done and reports from other travelers affect the purchase decisions. Secondly motivations, desires and expectations determine the travel behavior; thirdly the external variances and lastly the link between cost and value of the choices are important in taking the purchase decision. The above model explains the adaptive nature of holiday decision-making and it also includes the cognitive dissonance. The traditional purchase process decision is different as it gives importance to preplanned decisions made and takes a more realistic approach to buying

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behavior. The evaluation of alternatives is done on the basis of brands and criteria and a ranking method is chosen which involves choosing the most viable option according to the ranks and thus cannot be adaptable and opportunistic as the holiday decision making purchase process. It follows the steps of rational model that does not allow last minute decision-making and the decisions are not based on moods. It is not experimental like the purchase decision made by holiday buyers.

FACTORS INFLUENCING BUYING BEHAVIOUR

There are a number of factors that influence the buying behavior of consumers, which are categorized as internal and external factors that have been mentioned in the above sections as well. It is important to have an understanding of these factors for the marketers promoting holidays. The factors influencing buying behavior are: 1. Socio-psychological factors such as perception, learning and attitudes. 2. Personal factors such as motivation and involvement, personal and self concept, lifestyles and emotions 3. Environmental factors such as social and cultural factors and interpersonal and situational influences. The motivation approach including the concepts of id, ego and super ego play an important part in decision-making. The pull factors in the holiday decisionmaking may be consumers wanting to visit certain holiday destination. (Antonides & Van Raaij, 1998, p. 167) The motivation concept developed by Ernst Dichter (cited in Margaret, Joy & Browne, 1995, p.149) reveal that often there are unconscious motives in purchasing and using goods and services. Thus it can be said that different people are derived by different motives and as holiday decision -making involves more than one person it is important to study the reference group and the motivations behind making a buying a holiday. Individuals mostly go on a holiday with spouse, family or friends. Consumers seldom go alone on a holiday and thus it is important to understand the dynamics of groups and its affect on holiday decision making. A group of individuals may be involved in the decision-making and thus it is important to understand the interpersonal influences. The concept of reference group is

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taken which in terms of marketing perspective is defined as groups that serve as frames of reference for individuals in their purchase or consumption decisions. (Hansen et al, 2012, pg.295) There are different types of reference groups such as primary formal and informal groups, secondary formal and informal groups and aspirational groups. The interaction between the groups and motivations forms the basis of holiday decision-making and thus marketers need to understand its implications.

CONCLUSION
Holiday decision-making does not necessarily involve sequential steps as in the rational model. According to Decrop (2005) vacationers can be divided into six types that are habitual, rational, hedonic, opportunistic, constrained and adaptable and thus it involves variety of decision-making processes and not only the theory of bounded rationality. It is also important for marketers to understand the external influences on decisions made by vacationers and the fact that mostly they do not go into extensive search process for holiday decision-making. The tour operators and agents can take advantage of opportunistic and adaptable nature of consumers and deliver information and make interesting offers. Thus this case study gives an understanding of differences in decision-making process and can help in better product communication to the consumers. The different models used with comparison to the traditional models gives an overall understanding of consumer behavior and although the sample chosen for the case study by Decrop (2005) involves only Belgians and cannot be considered as random sample it gives an analytic understanding of holiday decision making process of consumers.

REFERENCES
Alain Decrop and Dirk Snelders (2003). A grounded typology of vacation decision-making, Journal of tourism management, Vol.26. Available: Emerald database. [Accessed 12th January 2013].

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Clive Smallman and Kevin Moore (2008). Process studies of Tourist Decision Making, Available: http://www.lincoln.ac.nz [Accessed 7th January, 2013].

David L. Loudan and Albert J. Della Bitta (1993). Consumer Behavior Concepts and Applications (4th edition), United States: McGraw Hill.

Gerrit Antonides and W. Fred Van Raaij (1998). Consumer Behaviour a European Perspective, England: John Willey & Sons.

Girish Punj (1987). Pre- research Decision Making in consumer durable goods. Journal of consumer marketing, Vol. 4, No.1, pp. 71-82.

John C. Crotts (1999). Consumer decision making and pre- purchase Information search, Abraham Pizam and Yoel Mansfled (eds.), Consumer Behaviour in travel and tourism, New York: Haworth Hospitality Press.

Leon G. Schiffman, Leslie Lazar Kanuk and Harvard Hensen (2012). Consumer Behaviour A European outlook (2nd edition), London: Financial Times, Prentice Hall.

Leon G. Schiffman and Leslie Lazar Kanuk (1994). Consumer Behaviour (5th edition), United States: Prentice Hall.

Loizos TH. Heracieous (1994). Rational Decision Making: Myth or Reality? Journal of management development review, Vol.7, No.4. Available: Emerald database. [Accessed 8th January 2013]. Margaret Graig Lees, Sally Joy and Beverly Browne (1995). Consumer Behaviour. Brisbane: Wiley.

Michael D. Cohen, James G. March and Johan P Olsen (1972). A Garbage can model of organizational choice, Journal of administrative Science Quarterly, Vol.17, No.1. Available: Emerald database. [Accessed : 7th January, 2013] 14

Middleton (1994). Marketing in Travel and Tourism (2nd edition), Oxford: Butterworth.

Mike T. Bendixen (1993). Advertising Effect and Effectiveness, European Journal of Marketing, Vol. 27, No.1. Available: Emerald database [Accessed: 10th January, 2013].

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