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Internal and External Factors Influencing the Consumer Decision-Making Process Essay Example

  • Category:
    Business
  • Document type:
    Assignment
  • Level:
    Undergraduate
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    3
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    2067

Introduction

Hospitality and tourism industry is one of the fastest changing sectors which have kept managers on the lookout (McCabe 2009, p.34). For modern hotels, restaurants and resorts to realize business success in the 21st century, it is crucial that their executives have the knowledge about consumer behavior. Alden, Steenkamp and Batra (2006, p.227) has indicated that the connection between marketing strategy and consumer behavior is emphasized owing to the fact that the success or effectiveness of firms’ marketing strategies are reliant on the executive’s knowledge of the consumer behavior. However, since customer behavior is complex to predict because they are so close to the mind of a consumer, hospitality and tourism company managers are now forced to spend most of their time studying factors which impacts the consumer decision-making process (Veal, Darcy and Lynch 2013, p.227). Therefore, this report analyzes the internal and external factors influencing the consumer decision-making process for a major purchase of holiday.

Internal factors influencing the consumer decision-making process

Hawkins, Mothersbaugh and Best (2007, p.63) argued that consumer behavior in purchase decision-making of a product is quite often subjective since it is affected by two major factors. One of the major categories is the internal factors. Also called psychological influences, internal factors are those that come from one’s personality, lifestyle and way of life. Internal factors comprise of Perception, Learning, Motivation, Personality and Attitude (Blackwell et al 2006, p.49). Internal stimuli normally drive consumer intrinsically to choose a hotel for holiday over others.

Perception

In standard terms, perception implies to awareness. To get customers’ attention is not enough to get success in the market. Consumer often purchase hotel services only if they perceive the service will incite them. Thus, Blackwell et al. (2006, p.56) argued that it is the perception of the consumer which will lead them to research a room for holiday. Perception strongly also enables the consumer to validate personality choice in terms of perceived results. InterContinental Hotels & Resorts normally create ads that attract attention, entice and create perception of quality service and satisfaction. Quester et al (2014, p.27) claimed that the company creates ads which satisfy four processes under perception including exposure, attention, interpretation and memory. The exposure to ad advert could be random or deliberate. When InterContinental Hotels & Resorts creates ads and place them on platforms like billboards or pop ups on other websites, more exposure is created (Sirakaya & Woodside 2005, p, 817). The situation is different to when a consumer gets information from someone about the Hotel and takes it upon him or herself to find out more about Intercontinental. Research however, shows that deliberate exposure has won the Hotel more customers compared to random exposure. The research is justified by the fact that consumers favor known brands over less known brands. A hotel like InterContinental Hotels & Resorts has a great brand association hence a positive perception is created among new consumers who want to make a purchase decision (InterContinental Hotels & Resorts 2016).

Learning

In marketing, the term “learning” is a defined as a process of getting new, or adjusting to new behaviors, preference, knowledge and values about the product or service (Santosh & Pandey 2011, p.23). The process of learning involves synthesizing various loads of information. Learning has many forms, including conditioning and cognitive (Poupineau & Claire 2013). Learning then reinforces a consumer’s behavior and creates a positive or negative experience. In Hotel perspective, learning takes place with how the InterContinental Hotels & Resorts staffs answers questions asked by the consumer. Paasovaara et al (2012, p.12) argued that positive response and description of the facility will automatically influence the consumer to book a room at the hotel. In getting the response from InterContinental Hotels & Resorts staff, the consumer can compare it with other Hotel and Resorts such as Hilton and Four Season and make a purchase decision. As stated earlier, learning also means adjusting to the changes made to products or services. The customers might have a long experience of the brand. Pickett-Baker & Ozaki (2008) opined that based on the past experience, the consumer might or not might reserve a room at InterContinental Hotels & Resorts for the second time depending on the first experience. It proves that learning is a feeling or emotion rather than information.

Motivation

A research done by Hawkins, Mothersbaugh and Best (2007, p.34) claimed that consumer decisions on purchasing a product or service is influenced by their motivation rate. Motivation is described as the energizing force or drive which activates customer behavior to purchase. Maslow’s Hierarchy of Needs model held that consumers derive their motive from social interaction and genetic endowment. Motivation of consumers from the lowest level (Physiological needs) on Maslow’s Hierarchy of Needs model to fifth and the highest level called (Self-actualization). Blackwell et al., (2006, p.78) indicated that once the first level is fulfilled, a consumer is motivated and feels the need for the next level. The level at which people feel the need to book a hotel is when they are motivated to fulfill self esteem and self actualization needs. In these two stages, consumer often feel secure in terms of job and are also motivated by stable income (Tay & Diener 2011, p.356). The majority of this group belongs to middle and upper class in the society and is the mostly targeted consumers by InterContinental Hotels & Resorts. The marketing department of InterContinental Hotels & Resorts understands the needs of such consumers and design ads which motivate them to pay for the services. According to McGuire’s Psychological Motives, some consumers are also motivated by egos or self expression particular the rich who feel they need the best of service or products in the market (Quester et al., 2014, p.107).

Attitude

Attitude has also been found to play a crucial role in shaping up consumer buying behavior. According to Quester et al (2014, p.111), attitude is defined as the emotional feelings of “mental positions”, tendencies, and positive or bad assessments which consumers hold towards a firm, products and services, and the institution. Attitude is a learned predisposition which makes people to either react to an object or event in a negative or positive way. Attitude has the tendency to last for a very long time as they are built on value, beliefs and lifestyle hence is not easy to change. For instance, there are customers who have formed positive attitude towards
InterContinental Hotels & Resorts and have become loyal over the year. Therefore, it is difficult for other hotels to convince them otherwise. Pickett-Baker and Ozaki (2008, p.285) posited that attitudes toward purchasing a product or service can be influenced by personal experiences and public reviews. Public reviews have boosted InterContinental image in the recent years. InterContinental Hotels & Resorts (2016) claimed that in 2014, the Hotel was ranked as Leading Hotel Brand in the world for 6th consecutive year during World Travel Awards. The same year, the company was rated as the “Best Hotel Brand Globally” during Business Traveler Awards in the Middle East (InterContinental Hotels & Resorts 2016.

Personality

Poupineau and Claire (2013) contended that personality is an internal preposition which shapes one way of doing things including what to purchase and at how much. Five 5 Factor Personality Theory has been developed to explain various traits which forms a results of different personalities and such traits comprise of extraversion, instability, agreeableness, openness to experience and conscientiousness (Tay & Diener 2011, p.357). The management of InterContinental understands the model and has created products and services which target extraverts and people who are openness to experience. InterContinental often targets outgoing consumers and who likes to spend their time on holidays socializing with new people and environment. However, InterContinental must always bear in mind when they are designing adverts not to conflict the attitude of the consumer. In a nutshell, Paasovaara et al (2012, p.16) stated that the company must always maintain brand personality which attracted the consumers in the first place. This means that the adverts must have characteristic such honesty and excitement among others.

External factors

Human beings are social being and in their interaction, various factors sway and influence their mind on what to purchase.
Blackwell (2006, p.69) asserted that these factors within the social settings are called external factors and they include group influence and culture.

Reference group

Reference group is defined as one whose presumed values or perspectives are used by members as the basis for their behavior (Blackwell 2006, p.72). Consumers always seek advice from knowledgeable people who are close with them such as acquaintances or friends and schoolmates. Therefore, managers need to know that individual’s consumer decision-making is greatly impacted by the reference group (Sirakaya & Woodside 2005, p.821). Members buy products or service so as to satisfy their needs or belongingness. Some of the current customers of InterContinental might have learnt about the hotel through their reference group. Paasovaara et al., (2012, p.13) claimed that some consumers use celebrities as their reference group and would buy a product or service because they believe such people favours quality and excellence. Today, most companies including InterContinental use celebrities to market their products.

Culture is described as a way of life. It is how particular people behave in their daily life. Even though culture changes, it takes a lot of time. Quester et al., (2014, p.85) affirmed that as people’s way of life, culture influence purchase decision such as what people buys. Santosh and Pandey (2011, p.25) stated that Culture is also used to determine success in terms of what people should own and what people can consume. Veal, Darcy and Lynch (2013, p.51) stated that hospitality business is a big business in western countries because success based on their culture is normally determined by what hotels one spend their holiday. Wealthy people do not just book any hotel, but look at the image and brand strength (Poupineau & Claire 2013). Culture also determines what people eat in different parts of the world. InterContinental New Delhi cannot just sell beef due to the fact cow is regarded as holy creature. Therefore, most Indians are vegetarians.

Conclusion

From the research, this report has established that there several factors both internal and external which hospitality managers needs to understand so as to design various strategies to meet the needs of consumers. Internal category, the research has discussed factors such as Perception, Learning, Motivation, Personality and Attitude while at external platform, the Group Influence and Culture has been identified. As the business environment of hospitality industry changes, some of these factors might also change hence the need for InterContinental Hotel & Resort to always create a learning organization which can tailor marketing strategies to meet consumer needs. In this way, the company will remain one of the most recognize hotel brand globally.

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