Consumer Behaviour – Holiday Decision Making Process

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CONSUMER BEHAVIOUR: HOLIDAY DECISION MAKING PROCESS

SUMMARY: Decisions are omnipresent in the daily lives of human beings. Being tireless decision makers, it stands to reason then that we understand the forces that drive decision making. The following report seeks to critically evaluate the long-held traditional ‘rational problem- solving and cognitive model’ of the consumer decision making process against the background of the holiday decision making patterns of the modern consumer.

The one striking aspect of all the theories thus far was the portrayal of the consumer as a logical, rational decision maker who made complex choices based on reason, rational thinking and minimal risk-taking. The five cognitive stages that a consumer goes through to arrive at decisions have been analysed against patterns of Holiday decision making. It was observed that although certain patterns did follow the cognitive paradigm, overwhelmingly holiday decision taking is one involving emotions and is adaptable. There is no one fixed process but a blend of several influential factors.

Read this – Rational People Make Decisions At The Margin

Tourism is essentially a people-related business and many variables shape its future. Actual decisions are seen to be more spontaneous and less deliberate than the cognitive theory suggests.

INTRODUCTION

Now more than ever, people are looking to fulfill their main satisfaction in their consumptive role. But how do consumers make their decisions? This question has been at the centre of much scrutiny and several marketing theories. If marketers are conjuring up new ways to capitalise on trends, then so are the very people they aim to lure.

This report will aim to focus on the traditional ‘rational problem solving, cognitive model’ of the consumer decision making process and evaluate it in light of the behaviour patterns involved in the process of ‘holiday decision making’ by the modern consumer. The interest in the area of consumer decision-making process evolved as early as 300 years ago with early economists, led by Nicholas Bernoulli and later by John von Neumann and Oskar Morgenstern proposing that consumers were influenced by the expected outcomes of their decisions (Richarme, 2005).

This early model, the Utility Theory, viewed consumers as rational beings who made decisions leading to optimum satisfaction from uncertain scenarios. In the modern world of countless choices, consumers are faced with evermore complex decisions. Consumers are more aware, information is found in abundance and therefore, the scope of decision making is far wider than ever before. Decisions fall into three levels based on the effort involved: extensive problem-solving, limited problem-solving and routinised response behaviour (Decrop, 2006, p. 71).

This throws open the door to debates on the relevance of existing consumer decision making theories. The main focus here will be particularly in the area of ‘holiday decision-making’. Over the years, the vacation decision making process is garnering interest and various theories have been put forward. However, there has been a lack of adequate empirical applications of these theories. Existing models and authors kept reflecting on the same five stages in the decision making process and thereby implying a rational approach. However, further analysis shows a viewpoint that differs from these traditional tenets. . Consumer decision making – A Cognitive approach and understanding holiday decision making behaviour The general perspective on the rationale behind consumer behaviour is approached from economic, passive, emotional and cognitive angles. Whilst the first three have their own significance, the cognitive view presents the consumer as inherently rational and a ‘thinking problem solver’. Therefore, this person seeks to fulfil needs and desires by actively searching for information about products and services and thereby minimizing future risks.

This processing of information creates preferences in the mind and ultimately to intentions of purchase. The consumer may not possess total knowledge about the various products and alternatives but aims to work with the information at hand and come to a rational decision. The model places due importance on the notion of goal-attainment as a vital component of consumer behaviour (Schiffman, Kanuk and Hansen, 2007). The cognitive paradigm represents the ‘problem-solving, rational consumer’ and, to a lesser degree, the emotional consumer. It describes the process of various steps leading to the culmination, i. e, making a purchase.

Most consumer behaviour models are based around this premise (Nicosia, 1966; Engel et al, 1973). However, several fundamental flaws were discovered in this theory. The most glaring one was the assumption that choices were knowledge-based and therefore the environment around the chooser was not taken into consideration. Behaviors, whether pertaining to work, pleasure or those of a discretionary nature tend to reflect causal historical explanations rather than rational ones. (Decrop, 2006) Moreover, on further observation, actual decisions are seen to be more spontaneous and less deliberate than the cognitive theory suggests.

The spotlight shifted from the idea of pre-eminent rationality to the usage of subconscious ‘heuristics’ or short-cut decision rules. It is interesting to note that the process of holiday decision making is predominantly dynamic in nature. It is not marked by fixed sequential stages or an abrupt end once decisions are taken. Decisions are based on several attributes (landscape, climate, amenities etc. ). However, consumers do not carry out a wide range of consequences of the decision to travel or not travel and do not evaluate multiple alternatives. (Decorp, 2006).

It is observed to be an ongoing process, sometimes involving several tentative plans at one time. Impulsiveness or nostalgia act as strong triggers. Economic, environmental and social factors are very influential as well. Often, decisions pertaining to holidays are made quite late and subject to frequent alterations. The traditional consumer decision process describes the buyer going through five main stages whilst making choices regarding products and services. There are three main components;

1. INPUT

The input addresses all the external factors that serve as sources of information and influence the customers’ values and behaviour.

These would comprise the organization’s marketing mix activities as well the non commercial socio-cultural influences (family, informal sources, social class, etc. ) that also affect the decision making process when internalized by the consumer. The various facets of the consumer and the psychological processes are influenced by the social and cultural setting as well. Culture reflects the set of values, ideas and symbols that enable individuals to communicate and interpret and evaluate (Blackwell et al. , 2001, p. 14). Sport is an example of how popular culture affects travel behaviour and is embedded in the ‘holiday experience’ with certain sets of consumers. A sizeable number of Europeans and Americans specifically plan holidays around sports such as golf, skiing and tennis. It can be seen that decision making is not just about rationality but emotions as well. A holiday being more of an experiential product, the affective choice mode (Mittal 1988) becomes more pertinent than the traditional information processing mode (Bettman 1979).

The focus here is on the hedonic and symbolic dimensions of the product and what it means to the consumer on an emotional level.

2. PROCESS

The cognitive theory proposes that the consumer is closer to making a decision after progressing through three stages that are all affected in one way or another by certain internal psychological influences 1. Problem/ Need Recognition This entails perceiving a need, whether in an actual situation (when a product fails to perform in a satisfactory manner) or desired situation (urge for something new) that is strong enough to trigger the decision process.

It is a starting point of sorts in the cognitive paradigm. It is quite logical to assume that a defective mobile phone would trigger the need for a replacement (actual state) or the sight of a limited edition watch may lead to immediate purchase despite the lack of urgency (desired state). The need or problem is still believed to be perceived with rationalism. In many instances, the generic decision to go on a holiday was not the starting point and many a times, it did not even matter. The decision to travel is often unconscious and automatic. Several factors blend together to act as triggers.

Some consumers will travel if the behaviour matches their lifestyle and offers facilities suited for their needs. A family with young children would seek locations that are easily accessible and child-friendly. On the other hand, an elderly traveler might be enticed by the promise of peaceful surroundings or events appealing to his taste and age.

1. Various factors such as administrative (job) related, time and financial constraints affect the outcome, thereby making irrelevant the presence or absence of a generic decision. There is no linear pattern to the plans. Changes in situations and levels of involvement also affect alterations in decisions.

2. Pre-purchase Search This stage of cognitive thinking opens up all the information channels to the consumer and clarifies his doubts and questions with regard to the product.

This could be aided by:

  • Internal sources such as past experience and hence familiarity with the brand, as well as product recall from own memory.

This, in turn, is influenced by various psychological factors such as motivation, personality, attitudes and perception. For e. g. , those with low dogmatic, low risk perceiver personalities ould be more open to pre-purchase search (Schiffman, Kanuk and Hansen, 2007) Motivation does play a very important role in holiday decision making process. Crompton (1979) identified seven push and two pull motives to travel. The push motives were: a change from perceived mundane environment, exploration and evaluation of self, relaxation, prestige, regression, enhancement of kinship relationships and facilitation of social interaction, while the pull motives were novelty and education.

  • External sources such as marketing and non-commercial information.
  • The degree of perceived risk also acts as a strong influence.

Complex and in depth information search and evaluation would be sought in high-risk situations whereas simple tactics would be sufficient in low-risk scenarios. Some people are content to go along with others’ suggestions and this might be the extent of their information search. Word of mouth and recommendations from family or friends also are effective triggers. In general, information search veers towards being more memory based( internal) rather than stimulus-based( external) and many holidaymakers look forward to the unexpected thrills of their travel (Decrop, 2006).

This may again vary depending on the age group, single/ family status and levels of personal involvement and risk-aversion. The possibility of duality in holiday decision making There may very well exist slight variances in the pattern of decision making, both prior to and during the vacation period. The pre-trip exercise is more ‘deliberate, purposeful and reasoned’ (Crouch et al. , 1999). The holiday makers are highly involved in choosing destinations, planning the itinerary, perusing through travel books and brochures, seeking external information through industry personnel and the internet.

Primary, sometimes even secondary destinations are chosen along with routes, attractions and various activities. Negotiations and compromises are conducted within individuals in the travel group. It can be observed that the consumer fits into the mould of a problem solver within the context of pre-trip holiday decision making. The behaviour may undergo a change during the period of vacation where it could be described as free-spirited and hedonistic. The consumer is ‘at play’ and the choices are based on simple choice heuristics (Crouch et al. , 1999).

The consumer as a pleasure seeker is an apt framework for understanding on vacation behaviour.

3. Evaluation of Alternatives

Recognising the importance of evaluating potential alternatives, the astute consumer avails of two kinds of information:

1. The Evoked Set This refers to the list of specific brands ( or models) that the consumer keeps in mind while considering purchases within that category. Even amongst the countless choices at hand, the consumer’s evoked set tends to be small ranging between three to five brands. This is however, subject to further increase with expansion of knowledge.

The evoked set consists of brands the customer is familiar with. Within the context of holiday decision making, the selection of options and how they are considered is very critical. The concept of evoked sets and how they arise, how they are considered (or not) resulting in a particular purchase is critical. The urge to travel gives rise to a sequence of evoked sets (early, late and action) and a decision is reached at which need not be compensatory to the decisions related to change in evoked sets (Crompton and Ankomah, 1993). A substantial number of holidaymakers lacked any well-defined strategies for decision making. Needs and desires were attuned to choice solutions simply because they were evoked at the same instance (Decrop, 2006)

2. The criteria upon which brands are evaluated: The criteria used for evaluation are usually those that meet or exceed the desired product attributes. The role of brand credibility is an important one that gives the product leverage. Three factors affect brand credibility: the perceived quality, the perceived risk and the information costs saved as a result of association with the brand.

Consumers also place more importance on trustworthiness over expertise (Schiffman, Kanuk and Hansen, 2007). Decision strategies adopted by the holidaymakers veer toward adaptability and opportunism. They also depend on the type of decision –making unit. Heuristics tend to be more spontaneous rather than pre-planned. A substantial number of the holidaymakers lacked any sort of well-defined strategies. Simple decision rules were preferred over complex ones even if accuracy was sacrificed in the process.

The strategies indicate limited amount of processing, are more qualitative in nature than quantitative, attribute-based and non-compensatory rules along with a lack of overall evaluation for each individual attribute. Emotional factors also help shape the choices. Even after all the attributes are weighed and considered, the decision need not be made solely on those grounds. Emotional and impulsive moods can change the course of the final choice. Seeking emotional arousal plays a particularly powerful role in the consumption of certain products among which is travel.

A model of vacation decision making should consider several factors such as the traveler’s choice of accommodation and transport, routes, amenities, choice of dining and shopping options (Woodside and MacDonald, 1994) The return to reality It is observed that once the initial euphoria of holiday planning settles down, there is a gradual shift to more realistic expectations and choices. Sometimes, the preferred (ideal) aspects of the holiday are traded for alternative solutions. This is aided by a shift from contextual facilitators ( eg. ostalgia, effective advertising, family situation) at the start of planning stage to contextual inhibitors( money or time constraints) that show themselves at the later stage. The FCB grid may also reveal a shift from dream to reality (Decrop, A. 2006)

3. OUTPUT

This aspect of the decision making process concerns itself with two important stages of the post-decision scenario:

1. Purchase Behaviour Purchase patterns typically follow three kinds: trial purchases, repeat purchases and long tem commitment purchases. The trial is categorized as the exploratory phase of purchase.

Repeat purchases fall in line with the concept of brand loyalty as it signifies the satisfaction of the customer with the usage of the product (Schiffman, Kanuk and Hansen, 2007). However, a trial phase is not always feasible when it comes to certain product categories where the leap would be from the evaluation to the long term commitment phase. The holidaymaker is in this position because there are very few concrete elements on which evaluation can be made on quality and so the focus shifts to the brand image, the price and other tangible elements. A study was conducted on first-time versus repeat visitors to New Zealand (Opperman, 1997).

The data revealed that first-time visitors preferred secondary destinations, activities and attractions over repeat visitors. This would be explained by the observation that first-time visitors displayed more of exploratory and variety-seeking behaviour, within the limits of time, expense and effort. They were interested in familiarising themselves with the place. Repeat visitors, on the other hand, may be preferential towards the more enjoyable aspects of their first vacation. Hence, there is some suggestion that travelers to an unfamiliar place may be more prone to seek variety.

2. Post-purchase Evaluation Upon passing the trial phase, the consumer can arrive at three possible conclusions after evaluating the product: – the performance equals the expectations, leading to neutral feelings – the performance exceeds expectations leading to positive disconfirmation and satisfaction – the performance falls below expectations, leading to negative disconfirmation and dissatisfaction The post-purchase evaluation stage is when the customer seeks to sort out any uncertainty over the selection process. This is generally the time when post-purchase cognitive dissonance sets in.

They try to overcome this by: rationalizing their decision as wise; seeking approval from advertisements that support their belief whilst ignoring the competitive brands; convince others to buy the same product or turn to other satisfied buyers for some sense of reassurance (Schiffman, Kanuk and Hansen, 2007). Substantial amounts of information may be collected just after the holiday in order to feed either the cognitive dissonance or prolonged involvement (hedonic consumption). Some consumers may even begin planning their next vacation riding on the nostalgia of the earlier one.

Therefore we see that in many aspects holiday decision making process doesn’t conform to the rational style of approach and has emotional, adaptability and opportunistic connotations.

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