HTM3103 CB for Tourism & Hospitality

1. HTM3103 CB for Tourism & Hospitality Week 1 2012/2

2. Consumer Behavior • ‘The study of why people buy the products/services they do and how they make their decisions (Horner & Swarbrooke, 1996)

3. CUSTOMER vs. CONSUMERHow differences between these 2 terms? • Customer vs. Consumer • Customer = someone who make a purchase( ‘monetary exchange’ takes place) • Consumer = someone who consume the products or services • In Tourism and Hospitality , Customer and Consumer may not be the same person e.g. when having a restaurants meals with family OR when travelling for a trip with family….one person make a payment but the rest are just eat or travel with the one who make a payment….. In this case, the person who pay = ? and other people whom not make a payment = ?

4. The role of CB in marketing process • An ideal goals for any companies should be to survive and making enough profit • Attracting or finding new customers may be an essential… • however, it is more desirable and much less expensive to retain current customers. Therefore, loyal customers who will always come back are the necessity. • HOW? the first stage is to make them feel satisfied! • If we can meet or exceed what they expect , they will feel satisfied.

5. WHAT make consumer to feel satisfied?

6. WHAT make consumer to feel satisfied? • to meet or exceed the expectations of our consumers , - it is needed to understand the consumer’s needs, motives, and preferences that generate those expectations • Organizations often consider their consumer’s wants & needs , however, they rely more on persuading them to buy products and services rather than putting the consumer at the core • Without knowing real wants and needs , how can the right marketing mixes can be designed and offered? • For this reason, Understanding CB is crucial for marketing strategies and 4Ps which is carried out by organizations to be effective

7. How? (continued..) Understanding CB enabling companies to: • Forecast behaviors in the future ( not to be over optimistic or underestimate the situations) • Correctly Persuade consumers • Developing new products/ services

8. Overview of Tourism & Hospitality • Tourism : A short term movement of people to places distancing from their normal place of residence to indulge in pleasurable activities, so as travelling for business purposes ( adapted from Horner & Swarbrooke, 1996) • Hospitality: ‘The provision of food, drink, and accommodation away from home’ • includes all organizations which provide guests with food, drink, and leisure purpose, as it is defined as ‘ looking after guests well’ • Without Hospitality Industry, Tourism industry cannot be survived

10. Hospitality : A definition Hospitality Definitions: ‘The provision of food, drink, and accommodation away from home’ Hospitality Industry : comprised of commercial organizations Offering food, beverage and lodging, or, in other words, of offering the basic needs for the person away from home. e.g. hotels, restaurants , bars, clubs, entertainment venues, fast-food outlets, leisure venues, cafés, events, food-services, resorts, cruise ships Almost anywhere you can have a good time and is related to food, drink, and facilities

11. Therefore, Hospitality Industry and Tourism industry are interrelated • Without one of each, another cannot be survived

12. What is Tourist? • Tourist can be defined as ‘A person whom travel out of his/her usual environments and stay there at least 24 hours but not more than 1 consecutive year for leisure, business, and other purposes’ ( adapted from WTO) • 2 types of tourists • Domestic • International

13. Majority of tourists are domestic tourist (8 to 10 times greater than international tourists) • However, In terms of spending, International tourists usually spend much higher and stay longer • E.g. In Thailand, domestic tourists (mostly Thais) do spend much less per day and their trips are shorter • In 2007, • Length of stay : domestic travellers stayed on average 2.5 days, while International tourists spent 9 days • Average daily spending is 1,770 baht per day for domestic travellers while International tourists spent 4,120 baht per day 4187 in 2011

14. Top 10 destinations of the world, 2010 ( source : WTO)

15. Top 10 most visited cities of the world ( by selected year) Source : WTO

16. Top 10 biggest spenders in 2010 (Source: WTO)

17. In 1997 – 7.2 million visitors • In 2011- 19.1 million visitors • In 2008, Bangkok ranked 3rd behind London and New York in Euromonitor International's list of "Top City Destinations" with 10,209,900 visitors, Pattaya 23rd with 4,406,300 visitors, Phuket 31st with 3,344,700 visitors, and Chiang Mai ranked 78th place with 1,604,600 visitors.[6]

18. Overview of Tourism in Thailand • Thailand's tourism industry makes up about 6.5 percent of the country's GDP • Nevertheless, international visitors spent more than 547 billion baht (something like 16 billion U.S. Dollars) in 2008. The average length of stay per tourist in 2007 was 9 days. • In 1997 – 7.2 million visitors • In 2011- 19.1 million visitors • In 2008, Bangkok ranked 3rd behind London and New York in Euromonitor International's list of "Top City Destinations" with 10,209,900 visitors,

19. Interestingly, the tourism sector does not only depend on foreign visitors. The number of domestic tourists actually dwarfs the number of foreign tourists. But domestic tourists (mostly Thais) do spend much less per day and their trips are shorter, on average two days and a half. In 2007 there were reportedly more than 83 million in-country travel trips. This created 380 billion baht in revenue. • Average daily expenditure was around 1770 baht per person in 2007 (as compared to 4120 baht per person for international tourism). • In 2008, 52.37 % of international tourists were East Asian, with Malaysia and Japan providing the most visitors. Close to two million Malaysians visited Thailand • Europeans provided close to 4 million visitors in 2008, about 27.22 % of the total, however, creating more than 40% of the Tourism revenue

21. Forces driving growth in Tourism & Hospitality The growth in consumption 1) The economy : Economic growth during 80s – 90s  rise in stock market + very low unemployment rate) Higher disposable income  more leisure time Early retirement = People want and can afford more goods & services

22. Why now and what about Hospitality? 2) The growth of the youth market Increase Children’s roles in family decision-making unit Companies market directly to them! E.g. fast-food restaurants  Children meals = promotional gifts or premium is the key ‘Pester –Power’ 3) Technological change : the most important factor Development in transportation e.g. cars, motorways, jet travel Computer : the most important factor e.g. hotel reservation via internet<< websites are more attractive and user-friendly, e-payment, e-banking, kiosk-self check in at the airport

23. Why now and what about Hospitality? 4) Social change : shifting from ‘production oriented ‘ to ‘consumerism’ Mass media Facilitating means - e.g. credit cards, store cards Globalization – ‘All the world are interconnected’ McDonald’s : open up their first store in 1955 By 2000, over 30,000 stores in more than 100 countries , including China, Russia, India, Israel etc.,

24. The value of theory in researching consumer behavior in hospitality As people are continually in relationships with others, particularly in our own field of hospitality, the act of consuming is more complex than simply one of buying and selling at a rational level.

25. Contemporary reviews of literature would indicate three broad approaches to consumption: • the positivist(economics) or cognitive consumer • the intepretivist (behavioural) consumer • the experiential consumer • ( postmodern )

26. The Positivist/economic consumer • Consumers are logical, expected to make rational decisions, based on an analysis of potential benefits and losses. • Marketers view consumers as robot/automatons • Always use rationale or reasons before decision ; includes consuming or buying products/services • Thereby, marketers assumed that ;if best deals are offered--> consumers will buy.

27. Interpretivist/ Behavioral consumer • Consumption is a learned response to stimuli, punishment or reward • - People are not simply rational information processors or decision makers • - Each consumers' experience is unique • - 'experience' (past experience or experiences of others around them) lead to buying/consumption decision • No emotions are involved in buying decision, what involves is ‘past experience’

28. Experiential Consumer • Rejects a structural response to experience • Consumption is beyond explanation or prediction • Decision and learning are seen as modern constructs and are replaced by fantasy, hedonism, or symbolism