The current report aims to explore the different ways in which consumer behavior may be applied in hospitality business marketing. Marketing as a whole implies the utilization of a set of methods and strategies to facilitate demand and ensure clients’ favorable activity. Since the hospitality industry mostly deals with services, marketing strategies companies use are challenging. Hospitality marketers promote intangible products, which is why influencing consumer behavior using specific methods is crucial. When constructing a positive, favorable image of a hospitality entity in consumers, the marketing department incorporates the knowledge about the process of human perception of information and the trends in choosing particular services over others. In such a manner, it is possible to trigger necessary stimuli to influence customers, decision-making, and pursue their purchasing behavior.
This report is designed to facilitate marketers’ utilization of the concept of consumer behavior and the theories accompanying it in the hospitality business environment. The content of the report is developed around the idea that consumer behavior is a pivotal element of high-quality hospitality marketing since it ensures a consumer-centered approach. Firstly, the hospitality industry as a business is introduced and defined. The qualities and specific features of consumer behavior as a concept are introduced in the introductory part. Secondly, the background information about the industry is provided with the emphasis put on the most renowned brands and trends. The business performance of such hospitality companies as Airbnb, TripAdvisor, Hyatt Hotels Corporation, Hilton Hotels and Resorts, and McDonald’s is discussed from the perspective of their application of consumer behavior principles. Thirdly, a detailed analysis of consumer behavior theories and concepts in the hospitality context is provided. It aims at showcasing the effective ways of theories application to obtain better business outcomes by means of consumer behavior application. Finally, the report is concluded with some summation points and recommendations for marketers involved in the hospitality sphere to improve their utilization of consumer behavior.
Introduction to Industry and Report
Consumer behavior is a vital component of effective marketing. In the contemporary competitive business world, the ability of a company’s marketing department to incorporate consumer behavior into product or service distribution has a decisive effect on the company’s overall success. The industry chosen for the report is the hospitality industry. The rationale behind the choice is that it is a multifaceted, rapidly developing sphere that is represented by an array of companies. The competitive business world of the hospitality business makes marketers apply new ways of reaching their prospective clients using effective influence. Purchasing behavior is the desired outcome of a hospitality business entity. Without positive customer experience and satisfaction with the provided services, companies may fail to remain in the market. Therefore, to stimulate this outcome, marketers should trigger the influential factors that will lead to the expected reaction. Understanding the patterns of consumer behavior is essential in implementing an effective marketing campaign in the hospitality environment.
Consumer behavior is defined as a set of actions and decisions consumers make when selecting, purchasing, and using goods or services. This concept incorporates a wide range of processes that might be explained from a psychological, sociological, and economic perspective (Sbakhi, Esa, and Mohd, 2018). When combined, these dimensions allow for explaining and theorizing what makes people decide when they choose a specific product. When applied to the hospitality business, consumer behavior is perceived as the most powerful marketing tool. It is explained by the fact that this industry, in most cases, involves immediate interaction between consumers and companies. Therefore, rational utilization of such concepts and theories as perception, satisfaction, the Disconfirmation Theory, Trait theory, and Neo-Freudian personality theory is essential. The scope of the report concentrates on the trends in hospitality marketing and the analysis of specific consumer behavior theories from the perspective of their practical application. It is argued that consumer behavior plays a central role in building an effective marketing strategy for a hospitality organization due to the evolving customization of services.
Industry Background and Presentation of Brands and Consumer Behavior Trends
The hospitality industry is a business sphere that entails companies providing goods and services within food and beverage, provision, transportation, lodging, and leisure. It includes such types of organizations as restaurants, hotels, bars, and others. Since this industry deals with direct interaction with consumers, it requires an extensive investigation of clients’ behavioral patterns to influence and predict them for firms’ benefit. Indeed, “from a marketing perspective, customers are the reason for the firm’s existence, and “to satisfy the customer is the mission and purpose of every business” (Kandampully, Zhang and Jaakkola, 2018, p. 22). Therefore, the establishment of relationships with the customers that prioritize their satisfaction is a key goal of hospitality marketing.
Some global hospitality companies build their marketing strategies on the principles of positive customer experience. Favorable pre-exposure, exposure and post-expose experience of a client using hospitality services define his or her overall perception of the brand and the quality of service. In such a manner, a consumer decides whether he or she will use the service again or recommend it to others. This assumption is logically related to the idea that the hospitality industry is largely impacted by word of mouth, either in its physical or virtual form. Indeed, as Hallowell (1996) states, the word of mouth advertising is a powerful tool in promoting intangible products. Moreover, the omnipresence of information technologies in the contemporary world makes the word of mouth popularization even more important. People communicate on a global scale, and their feedback constructs a collective perception image in the minds of prospective consumers. Such hospitality brands as Airbnb and TripAdvisor intensively utilize the online implications of the word of mouth advertising. They develop a system of feedback and ratings from their customers, thus building a trustworthy and reliable relationship with the consumers. From a
However, attracting new customers is not as effective from the business perspective as retaining old ones. According to Hill and Alexander (2006), the leading trend in marketing now is that companies try to maintain their current customers by means of quality improvement and relationship facilitation. In this regard, developing consumer loyalty contributes to the stability in demand and expands the competition opportunities. For example, monopoly loyalty is obtained via chain growth and leading the market. Also, habitual loyalty is relevant to the frequent usage of particular services, such as business traveling and accommodation. To illustrate the application of loyalty in hospitality brands’ marketing, one might discuss the strategies of Hyatt Hotels Corporation and Hilton Hotels and Resorts. These hotel chains have expanded significantly and now incorporate a variety of companies in all parts of the world. Their tendency to partially monopolize the business and expand its market share provokes consumers’ monopoly loyalty. On the other hand, the wide range of loyalty discounts and privileges for brand commitment involves commitment loyalty, which is beneficial for both parties.
The achievement of consumer loyalty depends on the ability of a company to provide the expected quality of service and meet customers’ needs. Consequently, customer satisfaction is the ultimate goal of the hospitality industry because it predetermines the profitability of a company (Hallowell, 1996). To achieve this, hospitality brands invest in their brand recognition and the creation of a culture that prioritizes quality and customization of service. According to Kandampully, Zhang, and Jaakkola (2018), many large hospitality corporations”find that it is important to balance service quality and price to enhance joyful experiences” (p. 27). An important aspect of such marketing efforts is generating favorable perception stimuli to trigger purchasing behavior. The type of stimuli and the various ways of consumers’ reactions to them are analyzed in the next section.
Detailed Application of Consumer Behavior Theories and Concepts
Consumer behavior contains knowledge from various fields, including psychology, sociology, economics, and others. Thus, it is theorized from various angles and allows for applying the theories and concepts most effectively. Perception is a key aspect of consumer behavior because it determines what, how, and when a consumer perceives and which steps of the perception process he or she passes to decide on a service or good (‘MKT 60012 consumer behavior’, 2020). From the moment of initial exposure, consumers pay attention to the stimuli, interpret them according to their experiences and values, and memorize them for future use. Visual perception incorporates the responses to various stimuli that a person can see. However, in marketing, it is important to understand that visual perception is “not only the rich experience that is a vision but also how specific aspects of visual stimuli affect consumers’ cognition and behavior” (Sample, Hagtvedt, and Brasel, 2020, p. 405). From a psychological point of view, the objects people see trigger particular emotions. Therefore, when choosing what to expose to the consumers’ eyes, companies can stimulate a particular reaction or response.
Indeed, visual perception plays a significant role in a hospitality context. It applies in two ways, the visual appeal of the brand logo or advertising and the decorative elements of exterior and interior that influence the consumer experience. For that purpose, big hotel chains and upscale restaurants use such service facility factors as “aesthetics, ambiance, lighting, service product, layout and social that have a positive influence on customers’ perception of upscale restaurant experiences” (Kandampully, Zhang and Jaakkola, 2018, p. 27). In such a manner, several perception types combine to stimulate favorable consumer behavior and satisfaction.
Since the concept of perception is closely linked to sensory perception, it is relevant to analyze how sensory stimuli affect consumer decision-making. To trigger an impulse purchase, a marketer might stimulate a sensation rather than perception. This implies that sensation is an irrational initial response to a stimulus, while perception is a rational understanding of what the stimulus is (Krishna, 2012). From this perspective, sensory marketing operates a variety of techniques, depending on the promoted product. They might include taste, sound, smell, and other senses that provoke consumers’ desire to purchase. For example, the fast-food restaurant chain McDonald’s uses appealing advertising that pertains to clients’ taste sensors. The visual presentation of a juicy burger generates appetite and stimulates one to buy.
The consumerist societies, in which people now live, are characterized by psychological and social features. Often, they subconsciously lead consumers’ decision-making depending on their values, beliefs, environment, and socioeconomic status. The unconscious triggers of decision-making are explained by Freudian theory. It implies that unconscious human needs for food and comfort determine their behavior as consumers. On the other hand, the Neo-Freudian personality theory justifies that social relationships are the most important issue in consumer behavior (‘MKT 60012 consumer behavior’, 2020). Therefore, the environment and the opinion of society form how a person will respond to the marketing stimuli. Market segmentation is one of the ways of the Neo-Freudian personality theory application. In the hospitality industry, market segmentation involves dividing the consumers into distinctive groups depending on their common features. Such large brands as Hilton and Hyatt, extensively use segmentation to satisfy all kinds of consumers. Similarly, the trait theory explains the process of segmentation as a tool that allows for pursuing specific consumer needs depending on their character traits. For example, following marketing research, marketers might develop a segmented service strategy developed for consumers with the need for either calm or active leisure. In such a manner, it will be easier to achieve customer satisfaction and retain current customers of a company.
Conclusion and Recommendations
In summation, the application of consumer behavior to the hospitality industry involves extensive knowledge of behavioral patterns. They depend on the psychological aspects of the human perception of the information. From a marketing point of view, consumer behavior is the most effective tool for achieving customer satisfaction and generating a firm’s sustainable profit. Providing a positive consumer experience is the key to success for a hospitality company in the modern world. The high level of interaction by the internet means allowing people to exchange feedback and create a social image of brands. Thus, it is important to apply consumer behavior concepts and theories, such as sensation, perception, the Freudian and Neo-Freudian, and trait theories, to ensure company success.
As for recommendations to marketers working in the hospitality business, it is essential to investigate the behavioral patterns of the segment an industry serves. The knowledge and the ability to apply it define the consecutive performance of the company in the competitive market. Firstly, marketers should utilize various sensory triggers to induce sensation and perception. Secondly, customization of services and the improvement of their quality will provide a better consumer experience. Thirdly, the triggering of sensation in advertising and brand image will lead to impulse purchasing according to the satisfaction of the unconscious needs introduce in the Freudian theory. Fourthly, marketers might apply market segmentation in the context of the Neo-Freudian theory to provide customized services for particular client groups. Fifthly, creating a positive image in consumers should be achieved via quality assurance for better word-of-mouth advertising. Finally, it is effective to research the market and the consumers’ traits to meet the specific needs of separate consumer groups. Overall, the application of these theories allows for stimulating the desired behavior and ensuring business prosperity and growth.
Reference List
Hallowell, R. (1996) ‘The relationships of customer satisfaction, customer loyalty, and profitability: an empirical study’, International Journal of Service Industry Management, 7(4), pp. 27-42.
Hill, N. and Alexander, J. (2006) Handbook of customer satisfaction and loyalty measurement. Taylor & Francis Group.
Kandampully, J., Zhang, T.C. and Jaakkola, E. (2018) ‘Customer experience management in hospitality’, International Journal of Contemporary Hospitality Management, 30(1), pp. 21-56.
Krishna, A. (2012) ‘An integrative review of sensory marketing: Engaging the senses to affect perception, judgment and behavior’, Journal of Consumer Psychology, 22(3), pp. 332-351.
‘MKT 60012 consumer behavior’ (2020). [PowerPoint presentation].
Sample, K. L., Hagtvedt, H. and Brasel, S.A. (2019) ‘Components of visual perception in marketing contexts: A conceptual framework and review’, Journal of the Academy of Marketing Science, 48, pp. 405-421.
Sbakhi, B., Esa, M. and Mohd, W.M.S. (2018) ‘Investigation study towards consumer behavior and purchasing decisions’, International Journal of Supply Chain Management, 7(5), p. 559.