Abstract
Consumer behavior is a subject of interest in the global marketplace, including the hospitality industry. The consumer decision-making process has been studied for many years and several models developed to try and explain how the consumers arrive at their purchase decisions (Barsky and Labagh, 1992).
The marketers are required to understand their consumers and this shows why their interest in the models is in the increase (Abelson and Levi, 1985).
The main aim of the research paper is to provide an analysis of the consumer decision-making process basing on two models; the Consumer information Processing Model and the Model of the Hierarchy of Effects. These models will be analyzed basing on the postmodern hospitality industry and they will be critically analyzed to determine the extent they are vague and encompassing.
The results indicate that the traditional nature of the models that assume that consumer decision-making is in the form of distinct stages has been criticized. However, the Model of the Hierarchy of Effects has been seen to be encompassing when it comes to complex decision-making situations (LaTour and Peat, 1979).
Introduction
For marketers to be successful, given the postmodern and fragmented nature of consumer behavior and new developments in the global provision of products and services, they have been required to focus on understanding the consumer’s wants in the best way possible.
This has led the marketers to engage in marketing research in order to understand the consumers of their products. Marketers have also come to get an understanding of the issue of consumer behavior when it comes to their consumption of the company’s services (Baker and Crompton, 2000).
This understanding gives managers the opportunity to provide complex marketing programs that are meant to target the particular segment of the market.
One of the greatest challenges facing the hospitality industry is the understanding of why the customers of the hospitality industry behave in the way they do. Some of the important aspects to explore in terms of consumer behavior are the external and internal factors that affect their behavior.
These aspects include the way the consumers make their purchasing decisions. The level of satisfaction of the hospitality consumers is also an important aspect to consider. The hospitality industry consumers also need to understand how the constant improvement of the quality of goods and services can be utilized as a marketing tool.
Getting an understanding of the consumer behavior in the hospitality and tourism industry is one of the greatest challenges that face the hospitality management. Managers require maintaining constant communication with the consumers of their goods and services.
They also need to pay attention to their needs in order to be ready to provide the proper environment and conditions to satisfy their customers. This includes changing the elements of the market mix. This is usually the case when the customers’ needs and preferences change with time.
The behavior of consumers and the process in which they make decisions have become the main research areas for many researchers from many fields, especially in consumer science. In consumer science, consumer behavior mainly looks at consumption behavior. This is the domain in which marketers and business people wish to have an understanding of the consumer behavior.
Several models have been developed to explain the consumer decision-making process. Du Plessis and Blem (1991) have described such consumer decision-making models as flow charts of the behavioral processes of the consumers. Others have argued that models are nothing more than repetitions of the features they are designed to represent. It provides a number of variables which are interrelated.
Such consumer decision-making models have several advantages. Models are important for research purposes in that they aid in providing conceptual frameworks that show the relationships between variables (Correia, 2002).
They provide a visual representation of what happens in the event that variables or characteristics change. They are also important in the development of theory (Walters, 1978). They are also important in that they show the specific cause and effect relating to the consumer behavior.
Aim and objectives
- The main aim of this paper is to provide an analysis of two consumer decision-making process models based on the hospitality industry.
- The paper aims at providing a critique of the consumer decision-making process, paying particular attention to the areas of consumption within hospitality industry.
- The paper seeks to determine the extent to which the models in consumer decision-making process are vague or encompassing when they are applied to the postmodern hospitality industry.
Literature review
Before the 1960s, few theories on consumer behavior existed. This meant that theories from different disciplines were used. During this time, marketers undertook the research. Afterwards, up to the early 70s, several consumer decision-making models were formulated by academicians and led to the development of the field of consumer behavior (Dick and Basu, 1994).
The first consumer decision-making behavior model was developed by Howard (Kassarjian, 1982). Other models include the Howard-Sheth model, Engel-Kolat-Blackwell model and Markin model. The primary concern was that research on the consumer behavior was not based purely on theory and this is the reason why several other models were developed.
The models mentioned are among the theories dubbed the ‘grand models’. They all tend to show the models of consumer decision-making to be stages in a major procedure in the purchasing process. They all take a problem solving approach to decision making.
The process of decision-making by the consumer has also been portrayed as a complex process containing several stages. There are various factors that are involved to trigger the consumer to recognize a problem before he or she could be involved in several activities before attaining a certain outcome.
This result may be of dissatisfaction or satisfaction. The models differ mainly in the way emphasize on various variables. Another difference is seen in the way they are presented. After 1978, the building of models in consumer behavior seemed to reduce significantly.
The consumer decision-making theories that are still in use currently emphasize on the process being an interaction of concepts, which demonstrate the flow the activities described by the stages involved. Most of the literature available on consumer behavior is based on the more traditional models involving the five stages (Harrel, 1990). The first stage is the recognition of the problem.
The second involves information search then there is the alternative evaluation. The forth step involves making the purchase decision which is involved with the post-purchase behavior or outcome evaluation (Schiffman and Kanuk, 1994). Others have managed to include several other stages into the model.
These extra stages have been added in order to show emphasis on other factors that may influence the process. They include the activities that may be involved such as the disposal of the goods not consumed.
A rational approach is taken while classifying the process of making decisions by the consumers (Punj and Srinivasan, 1992). This means that there is the proper weighing and an evaluation of the form of use or the functions attributed to a product in order to come up with a proper decision (Solomon, 1996). The goal behind this rationalization is to base it on certain criteria that include those of capacity, size or price.
Engel, Blackwell and Miniard (1995) had a similar discussion about what encompassed consumer behavior. They suggested that logical positivism constituted the major research aspect in customer behavior. This means that research was performed using empirical techniques in order to provide a general explanation and laws. This type of technique was used to develop the grand models described above.
Several models touching on the decision making process of the consumers apply to the hospitality industry. This consumer decision-making process models should be understood by the managers in the hospitality industry as well as in other industries (Bojanic, 1996). Hospitality industry managers face a great challenge in understanding why their consumers behave in the way they do.
The management needs to maintain constant communication with the consumers of the goods and services in the hospitality industry in order to provide solutions when they are required. It has been realized that the preferences, needs and wants of the consumers may change (Correia, 2002).
This usually requires the intervention of the managers in terms of changing some of the elements of the market mix in order to meet the requirements of the consumers of the hospitality industry.
With the postmodern hospitality industry, several changes have occurred in the way in which products and services are rendered (Baloglu and McCleary, 1999). Recently, consumers have shown an increasing desire to have healthier foods. This has led some of them to request for or even demand healthier foods to be included in the menus of the hotels and restaurants.
The managers of the hospitality industry have responded positively to this request in order to maintain their customers (Baloglu, 1997). This includes the provision of foods that have low salt and fat content. They have also ensured that there are more food choices including vegetables, fruits and cereals.
The changes of the target market segments must be provided for by the corresponding change in the goods and services provided to the consumers of the hospitality industry (Bultena and Klessig, 1969).
Consumer behavior entails the understanding of the consumers as they proceed in purchasing the goods and services. This behavior occurs in an environmental context that every individual operates. Consumer behavior is therefore seen to be the study of the roles that other individuals have on others in the industry.
Two main ideas are behind the aspect of consumer behavior. One of them is that the behavior of the consumers is predictable and rational. The other is that marketers have the power to influence the behavior of the consumers.
Some have tended to assume that consumers behave in an irrational an unpredictable way but this is not the case. That decision that looks random and unplanned to an outside observer is usually very rational to that person making the decision concerning the purchase (Cohen et al., 1972).
Sometimes, consumers tend to exhibit conflicting or irrational behavior but in the real sense, it is not irrational. For example, restaurants have been seen to increase and diversify their menu choices by adding healthier foods in the menu.
This was as a result of the suggestions made by the consumers as the need to consume healthy foods has increased. At the same time, the sale of desserts and other ‘unhealthy’ and sugary foods is on the increase. These two purchasing decisions seem conflicting to the outside observer.
However, when you critically examine this behavior from different perspectives, it would appear rational. From the perspective of the consumer, it could be very rational. Let’s say that the particular consumer had been consuming healthy foods through out the week and, as a treat, decides to consume some high-calorie food. To the consumer, this would be very rational (Barsky, 1992).
However, this provides a challenge to the marketers at the hospitality industry. This is because it may be difficult to understand the trends in consumer behavior. Without this understanding, they would not be in a position to provide goods and services demanded or required by the consumers.
Methodology
Consumer decision-making models
The traditional models of consumer decision-making process are mainly cognitive. This means that they are of the problem-solving perspective. They may also be based on emotions. One of such a model is the Consumer Information Processing Model, which shows the stages in a typical buying process.
Other models used in the postmodern hospitality industry to examine consumer behavior include the Price ending and Consumer Behavior Model. Both of these models shall be analyzed critically and to determine the extent they are vague or encompassing when they are applied to the postmodern hospitality industry.
Consumer Information Processing Model
This model displays the five stages that the consumer passes through in the decision-making process. The first stage is problem recognition. The second one involves information search. The third stage involves the consumer evaluating and selecting alternatives (Dube et al., 1994). The fourth stage involves the implementation of the decision by the consumer. The last stage in this model is the post-purchase evaluation.
Problem recognition
The first stage in the Consumer Information Processing Model is problem recognition and this is the first process involved when the consumer is considering purchasing a product or service. This occurs when the consumer recognizes a need or a particular problem.
For example, a person may realize that the food he or she has been consuming has been the cause of the increase in weight. This is just an example of a problem that is encountered by many consumers in the hospitality industry. A problem normally occurs when consumers spot a difference between the actual state and the state that is preferred.
Consumers in the hospitality industry have spotted several problems when it comes to making purchasing decisions. These problems may be in the quality of the products or services rendered.
These include the quality of foods provided, customer service provided, recreational facilities offered or other services. The natural instinct of a consumer who has encountered such a problem is the need to look for a solution and this leads to the second stage.
Information search
This is the second stage in the Consumer Information Processing Model. When a particular problem is encountered by the consumer, the likely reaction is to look for more information. For example, the consumer of the hospitality industry – who has realized that the food he or she has been consuming is the cause of the increase in weight – will be more attentive to advertisements concerning healthy eating.
The consumer might also seek medical information from several sources such as the internet. The consumer may also visit the doctor for more information. Getting information from friends who have successfully managed to maintain their weight may also be a good source of information.
Through these avenues of acquiring information, the consumer learns more about other healthier foods (in the case of the example provided) or may get informed of other better hotels and restaurants that provide better services to the customers. There are different sets of information that will be available to the consumer seeking information. The first set is the awareness set.
This is the total information that is available to the consumer. The other set is the consideration set and this includes that information which the consumer thinks would satisfy the initial purchasing criteria. These are the options that the consumer is considering. The last set is the choice set and this is the information that the consumer believes is the most appropriate.
Evaluation and selection of alternatives
The question comes on to how the consumer processes competitive brand information or how he or she evaluates its value. There is no fixed process of evaluation that could be applied in all purchase decisions. Furthermore, no single process could be applicable for all consumers in the market.
However, others have viewed the evaluation process at a particular point of view. This is in that it could be derived cognitively or through rationalization. This way, the consumer attempts to find a solution to the problem at hand and find ultimate satisfaction. The consumer is simply trying to find the benefits within the product that would aid in solving the problem.
This would lead the consumer to look for certain attributed from the product that would meet the requirements of the product of choice. To the consumer, every product possesses certain attributes that have different capacities of solving the problem. Therefore, it is of uttermost importance for the consumer to know the difference between an attribute, a benefit or need associated with a product.
The three (attribute, need and benefit) may be organized in a hierarchical manner. They are all related in that the bundle of attributes possesses certain benefits that the consumer might derive benefits from.
The benefits that are associated with the attributes of the products have the capacity of meeting the specific needs of the consumer. In the hospitality industry for example and basing on the example provided previously, the attributes that may be associated with healthy food choices such as vegetables are the low fat content, low sugar and salt content.
The benefits that may be derived from these attributes include maintaining low fat content in the body or consuming food with low calories and maintaining these contents at low levels within the body. This would ultimately relate to the underlying need of the consumer to maintain a healthy body weight.
It can be realized however that attributes of the products may only be relevant or of assistance only if they produce some certain benefits. In the same way, the benefits may be of importance or be relevant only if they address the issue and be in a position to satisfy the need of the consumer.
Decision implementation
The process of decision implementation involves the selection of a specific product and a specific location in order to solve the problem at hand. This requires the consumer to make decisions based on three ways. The first way is simultaneously and this does not require much consideration.
The second way of making a decision is by considering the product first and the location second. The third way is by considering the location first and the product next. However, the consumer may select both the location and the product simultaneously.
Post-purchase evaluation
This is the last process in the Consumer Information Processing Model. This stage is influenced by the decisions made in the previous stages in the process. The level of purchase involvement of the customer is of relevance in this case. Purchase involvement describes how much a consumer is determined to make the purchase.
This would in tern determine how much the consumer would be involved in the process of searching for the information before making the decision to make the purchase.
Product involvement, on the other hand, is the value that the consumer places the product. This is different from purchase involvement. The level of product involvement increases the amount of time the consumer spends in searching for information, evaluation and post-purchase evaluation.
The Hierarchy of Effects Model
This model is widely used in marketing, including the hospitality industry. It is especially predominant in the advertising theories. Marketers in the hospitality industry often advertise their commodities or services to the potential consumers in order to make them aware of what the company is offering and to give them a reason to prefer one area over the other.
This model shows clear steps of the process of advertising. The idea behind the model is that individuals go through different psychological stages before making a purchase decision. Some models provide a hierarchical representation of the stages while others explain it using the help of a pyramid.
The levels move from unawareness, awareness, knowledge, liking, preference, conviction to purchase. The model shows the learning process that the consumer goes through as he or she acquires information from the outside world.
The first stage in the model shows a position where the consumer is not aware about the brand. The consumer remains at this state until an external stimulus triggers his conscience. A diagrammatic representation of the model is shown below.
Fig. 1: Model of the Hierarchy of Effects
Awareness
The marketers in the hospitality industry have managed to create awareness in different ways. For example, among the target audiences who have no idea about the commodity or services within the industry, the marketers have managed to create awareness through providing as simple as the name of the product. They do this repeatedly in order to make it stick into the heads of consumers (Bentler and Speckart, 1979).
Knowledge
Product awareness does not imply that people would have sufficient knowledge about the product or service in the hospitality industry. Creation of brand knowledge is therefore the main objective in this stage. This is where marketers try to instill knowledge of what the brand represents. It also provides information about its benefits and the target market.
Liking
This stage shows the reaction of the consumers to a particular product after getting informed about it (Bettman and Park, 1980). The marketers need to understand people’s reactions especially if they react negatively. They need to understand the root of the problem and fix it.
Preference
Consumers have preferences and may like different products but prefer others. This calls for the marketers to build consumer preference. This is done through promotion of quality, value and other attributes.
Conviction
When a consumer prefers a particular product, he or she might be convicted to purchase it. The marketers’ role here is to build conviction among the consumers.
Purchase
This is the stage where the consumer decides to purchase the product or service. However, even after being convicted to purchase a certain product, some consumers might end up not purchasing it. The marketers might come in and try to convince them to purchase by offering low prices or other offers.
Results
Criticism of the consumer decision-making model
Criticisms of the traditional consumer decision-making models such as the Consumer Information Processing Model have existed for a long time. One of the reasons behind this criticism is the fact that the models are based on limited theoretical background. This is seen in the way they were developed and revised.
The criticism comes in different forms. One may be in the way the consumer decision-making models is rational. The other criticism comes in the way the process has been generalized. There are also concerns about the details included in the models (Fishbein, 1967). There are limitations associated with the models due to the positivistic approach employed in its making.
For a long time, theorists have criticized the rational consumer model by arguing that the model showed that while purchasing any product, the consumers spent very limited time or even did not engage in some of the activities that are presented in the stages of the decision-making process (Schiffman and Kanuk, 2000).
Lofman (1982) also argued that the consumers are not usually conscious in their behavior while making purchase decisions.
The generalization of the consumer decision-making process can be seen in the way they are organized in to broad structures that provide a basic process at certain perspectives. In reality, consumers are usually faced with insufficient information and in most cases, well-defined probabilities hardly ever exist. This makes it almost impossible to make rational decisions.
Support or criticism of the Model of the Hierarchy of Effects
This model assumes that consumers are cognitively driven. It has been supported since it applies especially in the more complex decision-making situations.
However, several criticisms exist to question the truthfulness of the model. Some argue that consumers usually develop some preference or liking towards a commodity before getting knowledge about it. Others argue that the stages of knowledge and preference should be put together since consumers develop them simultaneously (Bentler, 1990).
Conclusion
The process of decision-making by the consumers before purchasing a product or service is an area that has been subject to research for many years dating back to the 1960s (Schiffman and Kanuk, 2000).
The understanding of the consumer purchasing behavior has remained elusive to the marketers in the hospitality industry. They have appeared to less certain about how the consumers make their decisions and this has made them less confident about how they could influence the process.
Several models have been developed to try to explain the consumer decision-making process but none of them is without criticism due to the failures associated with it. However, some models – such as the Model of the Hierarchy of Effects – have helped explain some of the behavior of the consumers and helped marketers influence their purchasing decisions.
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