MODULE 1

THE TOURISM MARKETING AND MARKET

SEGMENTATION

LESSON 1: Tourism Marketing

At the end of this lesson, the students should be able to:

1. Define tourism marketing and its functions;
2. Differentiate tourism products from consumer products;
3. Explain marketing as a management process; and
4. Discuss the evolution of marketing and the integrated marketing approach.

Week 1-2

Marketing has evolved from simple trade to a production orientation, and to a sales
orientation. When businesses realized that production was increasing, they began competing for
recognition within the market. The customer has become king, and building relationships with
them has been at the heart of any successful business enterprise. With the rise of relationship
marketing and social media marketing, the rules of the game have changed. Tourism has become
one of the world’s largest and fastest growing industries. Much attention has been given to how
tourism can continually grow. Just like any other business, marketing plays and integral role in its
continuing growth.

Now, I want you to grab anything you see near you. May it be a pen, a book, a glass, etc. On the
blank spaces that follow, write as much as you want promoting the thing/material that you just
grabbed. And you should write something that would convince me to buy it.
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Do you think you had given me enough knowledge about the product that you were selling? Did
you consider the price of the product to its quality? Perishability? Appearance? After the
distribution of the next module, I will let you know if I would buy your product or NOT (bought
products will earn 50pts, and rejected products will only earn 10pts.) Let’s see how well you did!
😊
 Tourism has become one of the world’s largest and fastest growing industries. Many new
destinations are emerging apart from traditional favorites – Europe and North America. These
new destinations are hopeful of the economic gains that tourism can bring, which include increase
in trade, infrastructure, and job generation.
Marketing for tourism covers several levels, from the tourism destination as the product
itself, down to the specific tourism products and services that a tourist should avail to complete
the tourism experience. These products include transportation (airline, cruise ship, bus, etc.),
accommodation (hotels, inns, apartelles, bed and breakfast), food and beverage (restaurants,
catering, bars), attractions (amusement parks, museums, zoos, marine sanctuaries, etc.),
amenities, and souvenir shops, among others.
What is tourism actually selling then? Tourism is not a single product. It is a combination
of products and services which results in a holistic experience for the traveler.

UNIQUE CHARACTERISTICS OF
THE TOURISM INDUSTRY
Unlike consumer products which can be availed off the shelf, tourism products have unique
characteristics that make their marketing and promotions quite challenging. The tourism product
is intangible, inseparable, seasonal, and substitutable. Additionally, tourism is a high involvement
product.
Now, let’s discuss each of the characteristic of tourism product!

Intangible

Tourism products cannot be touched, smelled, tasted, felt nor heard prior to purchase. They
cannot be subjected to prior scrutiny. One cannot examine nor test them before purchase, unlike
consumer products which can be sampled.

A destination that promises fresh air from its beach or a scenic view of the mountains cannot send
a sample. Consumers rely on photographs of place, comments or reviews from those who have
visited the place or availed of the services, and promises from the company itself.
 This is a photograph of Boracay. The beauty of this scene can only
be appreciated when one is actually in the destination. Looking at the photograph will never
equate to the experience of having one’s hair blown by the wind, feeling the sun’s penetrating
heat while basking on it, and hearing the roar of the motorboat. This is why the word of mouth of
a highly effective means of promoting tourist destinations.

Inseparable
The tourism product cannot be separated from the consumer. When tourists avail of products and
services, they have to personally go to where the products are. Since what is being sold is the
experience, the product and the consumer cannot be in two different places; they have to be in
the same place.

A tourist who avails of airline ticket need to be physical present inside

the airplane to avail of the product. Products cannot be delivered to where the consumer is. Most
of the time it is the consumer who goes to where the product is to avail the product.

You are Part of the Product

Activities within the destination can only be enjoyed when one is a part of it. Spectators have a
different experience compared to actual participants in the tourist activity.

Variable

The tourism experience is likely to be different depending on when the product is availed, who
one is with, and how the service providers deliver the service at the time of the consumption.

One may have gone to the same restaurant several times and have a
different ding experience each time. While the first time at the restaurant may have been quiet,
the second time, one finds it to be noisy. Simply because there may have been few customers
the first time and a rowdy group of teenagers the second time. Hence, the variability of the tourism
product.

This is the primary reason why

standardization of operation is crucial in
the tourism industry. Chain and
franchise establishments make it a point
to standardize the way they provide
products and services to address the
variability component of the industry.

Perishable

The tourism product is one of the most highly perishable of products. Perishability, as used in this
context, refers to not being able to forward inventory to the next day. It does not refer to food
being spoiled and thrown away. Products become perishable when it can no longer be consumed
today even when no one consumed it the day before. Unlike consumer products such as a pen;
if the pen was not sold today, it can still be stored in a warehouse to available for the sale the next
day.
 Airline and restaurant seats, hotel rooms, and function rooms are perishable products. A seat or
a room that is not sold today cannot be sold some other day.

For instance, a hotel with 100 rooms that

was half full yesterday will only again have
100 rooms today. The 50 rooms that were
unoccupied the day before cannot be sold
the following day; the hotel fails to earn
from the unsold rooms. A hotel will always
have the same number of rooms for sale
at any given day.

Seasonal

Seasonality does not only refer to seasons of the year or the whether conditions. It also refers to
behavioral patterns of the travel market. The seasonality of the tourism product hinders it from
maximizing its profits all year round. Hence, intensified marketing during the lean season will help
increase demand for the product. This is also the reason most tourism products, such as airlines
and resorts, have different rates throughout the year. Such differences in rates help manage
capacity and yield to maximize profitability.

Take note!

Revenue management addresses the perishability factor of the tourism product. With the
proper tools for forecasting price and occupancy, yield can be maximized.
Substitutable

Competition in the tourism industry is intensifying. With new destinations emerging and competing
in the global marketplace, one destination can easily be substituted for another destination.

With a new restaurant opens, the old favorites are relegated to second choice.

It is quite a challenge to establish loyalty among clients since there is a wide range of product
offerings to choose from. With many choices available, the tourism product is highly substitutable.
However, identifying one’s competitive advantage and a unique selling proposition may help make
a tourism product less substitutable.
Tourism as a High Involvement Product
Decision making in the purchase of tourism products is considered to be of high involvement.
Tourism products of high involvement mean that there is a greater degree of thought or study
involved prior to purchase. EXPENSIVE, COMPLEX and UNREPEATABLE are characteristics of
high involvement products.

Purchase of expensive products is likely to go through a long and detailed process of

canvassing and comparing of brands, suppliers, and product features.
If the product commands a high price worth more than one’s monthly salary, one would surely
make detailed comparisons before finalizing any purchase. Travel products, home appliances,
and real estate properties fall under this attribute.

Consumers may find complex products difficult to purchase.

The difficulty may arise from the need to understand the features or details of the products. Travel
packages can be considered as complex mainly due to the variety of products and services
available, and the “jargons” (technical words) used in explaining some of these products. The
same holds true for highly technical products such as electronic gadgets and computers.

The unrepeatable nature of travel makes it a “once-in-a-lifetime” purchase.

With the novelty-seeking behavior of most tourists and the high cost of travel, travel purchases
may not be repeated or may be infrequent. Hence, more careful scrutiny is exercised prior to
purchase. Aside from travel products, special events such as weddings and debuts fall under this
characteristic.

Take note!

Marketing necessarily plays and important role in the purchase of tourism products. Because
of the aforementioned characteristics of the tourism product, a marketing strategy needs to
be developed to make the product competitive in a highly commercialized market place.
 Table 1.1 High Involvement vs. Low Involvement Products
High Involvement Low Involvement
Expensive Inexpensive
Complex Simple
Unrepeatable Familiar

TOURISM MARKETING
DEFINED
In the past, marketing was associated with only advertising and selling. However, these
two activities are now part of a more complex set of strategic activities that comprise marketing.
There has been a misconception that marketing is a task that is performed solely by account
managers and marketing officers. A highly successful establishment makes marketing a concern
not only of guest contact positions but of each and every employee of the establishment.
Costumer satisfaction is at the center of marketing. It is easy to persuade a customer to make the
initial purchase, but making the customers return for more is dependent on his satisfaction from
his initial experience.
 The American
Marketing
Association (2013)
approved a new
Kotler, Bowens, and definition: marketing
Makens (2010) define is the activity, set of
marketing as the art institutions, and
and science of finding, process for creating,
retaining, and growing communicating,
profitable customers. delivering, and
Philip Kotler (2002) defines exchanging offerings
marketing as a social process that have value for
by which individuals and customers, clients,
groups obtain what they need partners, and society
and want through creating at large.
and exchanging products and
values

Figure 1.1 The Evolution of Marketing Definition

MARKETING AS A
MANAGEMENT PROCESS
Since the provision and consumption of the tourism products and services usually occur
simultaneously, the marketing orientation should involve the entire organization. The marketing
management process involves the following key processes (Lumsdon 1997):
Table 1.2 The Marketing Management Process
1. Marketing Information System
2. Marketing Planning
3. Planning Tactical Campaigns
4. Marketing Operations
5. Monitoring and Control
With the advent of technology, the provision
for a marketing information system enables
the organization to compile an updated set of
information about its customers, competitors,
and the organization’s capability and
effectiveness.
This involves an analysis of the marketing
environment in relation to the potentials of
one’s business. It also involves the setting up
of objectives and an evaluation of the
milestones that the company has reached.
The creation of marketing strategies will help
increase the business by obtaining the best fit
between the company’s resources and its
target market position.
This step ensures that practical and realistic
tactical campaigns are conducted in support of
the comprehensive marketing strategy.
This process involves the challenging part of
implementing the planned strategic and
tactical campaigns by coordinating with all
stakeholders, fine tuning the marketing mix as
they unfold, and ensuring the activities are
conducted as planned.
This involves the ongoing process of
evaluating sales data and financial
performance versus marketing activities
conducted. It also includes the handling of
customer feedback and complains (if any) and
coordination with what the staff has to say
about the marketing campaigns. Finally, it
includes being aware of what the competitors
are doing.
 CORE MARKETING FUNCTIONS
Marketing’s key functions include marketing information management, financing, pricing,
promotion, product/service management, distribution, and selling, briefly discussed as
follows:

1. Marketing Information Management – entails gathering information about customers

to better serve their needs and improve decision making.
2. Financing – involves planning to ensure that resources are available to maintain and
improve the business.
3. Pricing – ensures that the value and cost of goods and services offered to customers
will be at the level that customers are willing to pay.
4. Promotion – prepares the various promotional strategies that will enable the products
to be introduced and sold to the customers.
5. Product/Service Management – involves designing, developing, maintaining,
improving, and acquiring products and services to meet the needs of the customers.
6. Distribution – involves bringing the products and services to the customers in the best
way possible.
7. Selling – is the ultimate measure of marketing success. Strategies on following up the
sale, closing the sale, and making a repeat sale are crucial tasks of marketing.

THE MARKETING MIX

Kotler (2010) says that marketing facilitates the exchange process and the development
of relationships by carefully examining the needs and wants of consumers, developing a
product/service that satisfies these needs, offering it at a certain price, making it available through
a particular place or channel of distribution, and developing a program of promotion to create
awareness and interest.
 Product

Marketing
Place Price
Mix

Promotion

Figure 1.3 The Tourism Marketing Mix (4 P’s)

1. Product/Service – is what the company is offering to satisfy a consumer’s want or need.

2. Price – is the value that the seller puts on the product or service. This includes the cost of
the product and the profit the seller wishes to make, this is also the amount a customer
has to pay in exchange of the product or service.
3. Place – is the means by which the product or service reaches the consumer.

4. Promotion – is the strategic plan by which customers are informed about the product or
service and its value, it also encourages customers to purchase the product or service.
 INTEGRATED MARKETING
COMMUNICATIONS
APPROACH
Promoting and selling products have become heavily reliant on traditional advertising
techniques which have become more expensive but less effective. The Integrated marketing
Communications (IMC) approach was born out of a need to enhance the demands of businesses
to promote their products. What is IMC then? It is the process of using all forms of promotion to
achieve maximum communications impact while maintaining a consistent image for the products
or services.
Let us walk through the factors that contribute to the growth of IMC in order to have an
appreciation of the shift from traditional marketing to the growing paradigm of relationship
marketing.

Factors that Contributed to the Growth of IMC

1. Growth of Technology
2. Incentive-based Compensation
3. Consolidation of the Retail Industry
4. Database Marketing

Research the difference of each factor and give examples.

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 To reach target market

To achieve company
objectives

Within the available

budget

Figure 1.4 Use of Integrated Marketing Approach

Various studies have shown that the integrated marketing communications approach has
been an effective way for companies to reach its target market and to achieve company objectives
within the available budget. Given creativity and strategic thinking, IMC can maximize a
company’s limited resources; thus, allowing small players in tourism industry to compete with
established brands.

When you used to travel to school or anywhere, try to recall how tourism establishments and
destinations are marketing their products and services. When you looked at billboards, transit ads
(posters inside and outside buses and other public transportations), and other ways by which
tourism products and services are promoted. Express your thoughts about those marketing ads
on the space provided.
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Give five examples of tourism products that you are familiar with, and explain how the
characteristics of the tourism product are evident in each. And in box provided, choose from your
list a tourism product that you would want to promote and create poster for it.
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😊
 MODULE 1
THE TOURISM MARKETING AND MARKET
SEGMENTATION

LESSON 2: The Tourist Market and

Segmentation

At the end of this lesson, the students should be able to:

1. Define what a market is;
2. State the three steps to target marketing;
3. Identify the characteristics of a good market segment;
4. Discuss market coverage strategies and positioning; and
5. Distinguish the new and emerging markets in the Philippines.

Week 3

Market segmentation, targeting, and positioning are key terms useful in any marketing process.
Identifying one’s market segments will help in identifying the market’s needs and wants. How their
needs should be met and how to communicate such to benefit them is covered in this lesson.
Market coverage strategies and identifying one’s unique selling proposition and competitive
advantage will greatly contribute to a successful marketing plan.
The Korean market is the Philippine’s top market, representing more than 25% of foreign visitors.
Have you ever wondered why they choose the Philippines? Let’s say you were a foreigner from
North America visiting the Philippines for the first time. List down at least 10 things you like about
the country.

1.
2.
3.
4.
5.
6.
7.
8.
9.
10.

Read and Analyze the following short case study!

Marketing Nuggets: Why Koreans Tour and Stay in the

Philippines

In an interview made by the Philippine Star with Philippine Ambassador to Korea Luis T.
Cruz, he cited reasons why Koreans remain as the top source of foreign tourists in the country.
Koreans love our holiday and leisure attractions which complement their main reason for travel,
that is, to learn English. Korean males come to the Philippines over the weekend to play golf,
women come for shopping, spa, and entertainment activities. In a Gallup Poll targeting the Korean
market, interestingly, Koreans enjoy our seafood as well.
Philippines and Korea have very strong bilateral relations. The Philippines supported
Korea during World War II and in their post-war restoration. Hence, government relations between
the two countries have been strong since the 1950’s.
On the space provided, what activities should the Philippines develop in order to keep on
attracting this markets segment?

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DEFINITION OF A MARKET
A market is a set of actual and potential buyers of a product. These buyers
share a particular need or want that can be satisfied through exchange
relationships (Kotler et al. 2010)
The tourism product is NOT for all.
The tourism industry aims to target a specific set of individuals.
It is for a particular set of buyers, a niche market.

3 Steps to target marketing:

(1.) Market segmentation
(2.) Market targeting
(3.) Market positioning
 MARKET SEGMENTATION
Market segmentation is dividing the market into district groups who might require separate
products and/or marketing mixes (Kotler et al. 2010)
A market segment is a subgroup of the total consumer market who share similar characteristics
and needs relevant to the purchase of a product, service, or experience (Hsu 2008).
Each segment is profiled based on its characteristics.

Characteristic of a Market Segment

Lumsdon (1997) identified six characteristics of a segment, as follows:

1. Identifiable. The people who comprise the segment can be located and identified such
that targeting them would be easy.
2. Cohesive. The consumers should be part of a whole whose specific qualities are common
to all.
3. Measurable. The marketer should be able to estimate the size and potential spending of
the members of the market segment.
4. Accessible. The members of the segment should be accessed by marketing efforts and
promotional activities to be conducted. If they are difficult to reach, efforts to reach out to
the specific segment might be futile.
5. Substantial. Segments should be large in order to be substantial. If the segment is small,
it should have a high spending capability to make a significant impact on the business’
bottom line.
6. Actionable. The company has enough resources and commitment to enable effective
penetration of the identified segment to ensure effective positioning.
 Table 2.1 Variables to Segment Consumer Markets
Geographic Demographic
nations age
states life cycle
regions gender
countries income
cities occupation
neighborhoods education
barangays religion
towns race

Psychographic Behavioral
social class special occasions
lifestyle benefits sought
personality usage rate
user status
loyalty status
buyer readiness

Geographic Segmentation – divides the market into different geographic units such as nations,
states, regions, countries, cities, neighborhoods, barangays, towns, etc.

In the 2nd Philippine Travel Exchange, the Department of Tourism

conducted workshops on how the travel trade sector can tap the emerging source markets for
Philippine Tourism. Countries such as Korea, USA, and Japan remain strong markets while
showing the potential of new markets such as Russia, India, and Australia.

Demographic Segmentation – refers to segmenting the market based on variables such as age,
life cycle, gender, income occupation, education, religion, and race.

The major developed markets of Europe, America, Japan, and

Australia are experiencing an ageing population while India and China are comparatively you
markets (Cooper 2006). These regions would want to avail of significantly different products. The
former would possibly like more leisure and shopping while the latter would prefer more
adventurous destinations with nightlife.
Psychographic Segmentation – divides consumers based on different psychographic profiles
such as social class, lifestyle, and personality characteristics.

In the Philippines, we categorize socio-economic classes through the

ABCDE categories, with Class A being the most affluent.
New forms of tourism such as adventure tourism, cultural tourism, and ecotourism are types of
tourism which the market has created. These are types of tourism which match the likes of the
younger generations.

Behavioral Segmentation – refers to dividing groups based on their knowledge, attitude, use of or
response to a product or service.

Special occasions – Mother’s Day, Valentine’s Day, honeymoon, anniversary, or birthday.

Benefits the buyers seek – quality, ambiance, menu variety, and price
User status – refers to markets segmented based on usage of product such as first-time users,
regular users, non-users, potential users, etc.
Usage status – on the other hand, refers to frequency of use categorized as light, medium, and
heavy users.
Loyalty status – refers to the degree by which customers are loyal to the brand
Buyer readiness – pertains to the different stage buyers become ready to purchase the product.

Technographic – Cooper 92006) suggest that there is a fifth variable for market segmentation
which he calls technographic segment. With the prevalence of the Internet and the World Wide
Web, there is an increasing divide between the users and non-users of technology in searching
for travel information.
 MARKET TARGETING
Market Targeting – is evaluating each segment’s attractiveness and selecting one or more of
these market segments in which to operate one’s business.

Kotler suggests three factors o consider in evaluating which segments should be targeted. These
factors are:
1. Segment size – refers to the current sales volume, growth rate, and high profit margin.
2. Attractiveness – refers to the potential impact of the segment to the company. One that
is not saturated and has few aggressive competitors would be structurally attractive.
3. Company objectives and availability of resources – refers to the main reasons for it
decision making and the available resources the company will use to make its objectives
a reality.

MARKET COVERAGE
STRATEGIES
Undifferentiated Marketing

• a company ignores market segmentation and goes after the entire market with only one
market offer
• this looks into what the market has in common and is designed to reach a huge number
of buyers
• this market coverage strategy can be used effectively for consumer products mainly
because a lot of buyers would need the same product

Using economies of scale, consumer goods such as shampoo and

soap could ignore differentiation and go for the market with a single product offer. This strategy
may not be effective for tourism products.

Differentiated Marketing

• approach the market by targeting several market segments using separate offers per
segment
• companies may offer several products for different market segments to capture a bigger
chunk of the market

Holiday Inn Galleria Suites and Crowne Plaza share a common

management group but Crowne Plaza is more upscale than Holiday Inn Galleria Suites; thus,
giving clients an option of where to stay depending on what their budget could afford.

Concentrated Marketing

• practiced by companies with limited resources

• it pursues getting a big share of a small market rather than a small share of a large market
• companies are able to allot its resources in making its presence felt in a specific market
with greater impact
• if the segment is well chosen, it may yield high returns for a company
 MARKET POSITIONING
Market positioning – is developing competitive positioning for the product and an appropriate
marketing mix. (Kotler et al. 2010)

3 positioning concepts will help reinforce the idea of market position:

1. Unique selling proposition (USP) – is a term used to identify what makes the product or
service different from other. This USP may occur due to the product’s physical attributes,
added services, personnel, location, or image (Kotler et al. 2010)
2. Competitive advantage – is the product’s advantage over competitors, which is gained
by offering greater value either by offering lower prices or providing more benefits to justify
higher prices.
3. Top of mind – is the highest level of recall that a brand receives. It means that the brand
occupies the top spot in a consumer’s mind. The ultimate top of mind level a brand can
reach is when it becomes synonymous to the generic.
For example:
Xerox is actually a brand of photocopying machine but the way Filipinos use the word is
as if it were the act of photocopying. We would use the term, “pa-xerox” when we actually
mean “pa-photocopy”. Market positioning is a deliberate way of making sure that the
product has a high recall in the consumer’s minds relative to its competitors.

NEW AND EMERGING

MARKETS
Cooper et al. (2006), in their article on new and emerging markets, identified the growth of tourism
markets fueled by these factors on the demand side:
1. Economic growth in major source markets
2. Increase in disposable leisure time and a longer life expectancy with a sound health to
travel
3. Changes in living conditions especially city dwellers becoming more inclined to engage in
tourism
4. Rising educational levels and increased access to information, stimulating curiosity
5. Increasing international integration of life
Further, Cooper et al see tourism’s supply side growing through:
1. The development of and investment in infrastructure
2. Continuous tourism product development
3. The elimination of legal limitations on and practical obstacles to travel

TYPES OF MARKET
The Family Market

3 types of decision makers within the family market:

Joint decision-making families – plan trips with
the longest period of time and make use of the
widest range of information sources

Families where the husband makes the decision for the

vacation destination is characterized by spouses with
greater age differences. Promotional activities are
directed to the male spouse; hence, it should
emphasize outdoor recreation.

Wife-dominant
families form the smallest segment of the family
market. Id the wife makes the decision on
vacations, it is characterized by short planning
duration and uses the fewest information sources
for planning.
The Senior Market
- Also known as the silver market or third-age tourism
- There was even a campaign known as SKI which encourages the elderly to go on
vacations to Spend Kid’s Inheritance
- The senior market also has limitations and constraints to engage in travel: safety, security,
health issues, availability, costs, family responsibilities, poor information about suitable
options (Moscardo 2006), and previous experience (Lohmann & Danielsson 2001).
- The senior market in the Philippines can be characterized by two: those with retirement
benefits, and those who rely on their children for sustenance.

The Youth Market

There is a growth of travel participation among the youth market that is fueled by several factors,
enumerated by Richards et al. (2006) as follows:
1. Increased participation in higher education
2. Increased travel budgets (parental contribution, savings, and work)
3. Work and travel combinations
4. The rise of low-cost/budget airlines
5. Shorter employment contracts leading to significant gaps in employment
6. The global rise of the internet culture
7. Growth of independent travel guidebooks
The MICE Market and Business Tourism

- The meetings, Incentives, Conferences (Conventions), and Exhibitions (MICE) industry is

extensively and rapidly growing (Ladkin 2006).
- Collectively known as the events industry
- Conference tourism refers to all activities associated with planning, travel to and
participation in conferences and meetings, both domestic and international
- Incentive travel is the most lucrative of the MICE market, it comes in the form of a reward
for employees or business partners; hence, luxury is a natural consequence.

When you eat in a fast food chain restaurant, observe the kinds of people who patronize the
products in the menu. What products do children eat? How about their parents and their
grandparents? What segment of the market do these fast food chains cater to?
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Discuss the strengths of the emerging markets for Philippine Tourism covered on this lesson.
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😊
 MODULE 1
THE TOURISM MARKETING AND MARKET
SEGMENTATION

LESSON 3: Tourism and Consumer Behavior

At the end of this lesson, the students should be able to:

1. Identify the factors that influence consumer behavior;
2. Discuss the stages of the buyer decision-making process;
3. Explain the role of service quality in customer satisfaction;
4. Differentiate individual versus organizational buyer behavior; and
5. Enumerate the different models of consumer behavior.

Week 4-5

Consumer behavior is the process and activities people engage in when searching for,
selecting, purchasing, using, evaluating, and disposing products and services to satisfy that needs
and desires (belch & Belch 2008). Purchase decisions, especially for tourism products are usually
arrived at after a long and detailed process of information search, brand comparisons, and
evaluation. Tourism products are too expensive to be bought on impulse. Thus, a careful
examination of choices is made before an actual purchase happens. You, my dear student, will
learn from this lesson that there are many factors that influence consumer behavior, and purchase
is often not just attributed to the prices of the product.

FACTORS THAT INFLUENCE

CONSUMER BEHAVIOR
Figure 3.1 Factors Influencing Tourist Consumer Behavior

Motivations
▪ Motivations – are inner drives that make people take a specific plan of action to satisfy
their needs.
▪ Hudson (2008) defines needs as the gap between what customers have and what they
would like to have; seen as the force that arouses motivation.
▪ Kotler et al. (2010) state that a need becomes a motive when it is aroused to a sufficient
level intensity that prompts a person to take action.
▪ A person who has the ability to understand how motivation works will have the ability to
gain competitive advantage. If one is able to identify what triggers purchase, he can
actually create the scenario to influence the purchase.
 ▪ Maslow’s hierarchy of Needs – the most popular theory of motivation as it is able to outline
the different needs of man, and rank them based on degree of importance in a simple and
easy to understand manner.
▪ Maslow ranked them based on their level of importance
▪ The more resources one has, the higher the likelihood that the higher order needs will be
met.
▪ Travel and tourism, for a great part, belong to the higher order needs

Figure 3.2 Hierarchy of Needs (Maslow 1943)

Physiological Needs – refer to basic needs for survival such as need for food and water.
Safety – refers to personal and perceived degree of safety and security
Belongingness – refers to acceptance in social groups
Esteem/status – refers to desire for prestige and status
Self-Actualization – refers to the goal of self-fulfillment

Dann (1977) describes travel motivators as linked with Maslow’s hierarchy of needs.
2 factors than make you want to travel Dann, 1997):

1. Push factors – are those that make you want to travel; sociopsychological factors.
2. Pull factors – are those that affect where you would want to go; cultural motives
Table 3.1 Push and Pull Factors (Dann 1977 & Crompton 1979)

Push Factors Pull Factors

(Sociopsychological Factors) (Cultural Motives)
escape from the mundane environment novelty
exploration and evaluation of self education
relaxation
prestige
regression
enhancement of kinships/relationships
facilitation of social interaction

Culture

Define as the collective mental programming of the human mind which distinguishes one group
of people from another.
5 Dimensions of Culture
1. Power distance
2. Individualism/collectivism
3. Masculinity and femininity
4. Uncertainty avoidance
5. Long-term and short-term orientation
6. Indulgence versus restraint (recently added)

Age and Gender

Age – pertains to the number of years a person has been living. Age is a traditional way of
segmenting the market and also greatly influences consumer behavior.
Gender – also influences consumer behavior. The female market steadily increasing and has
been observed to be more discriminating than its male counterparts.
Social Class
Social class – is one’s position within the society and is determined by factors such as income,
wealth, education, occupation, family prestige, and value of home or neighborhood.
Lifestyle
A lifestyle is a person’s pattern of living as expressed in one’s activities, interests, and opinions
It portrays the whole person interacting with external forces.

Starbucks in the Philippines became a huge success because there

was a good fit between the product and the Filipino lifestyle – the Filipinos love to talk over a cup
of coffee.

Life Cycle
Life Cycle refers to the stages an individual goes through in their lifetime.

Single people choose destinations that have fun and adventure more
than those who are married and have young children.

Reference Groups
Reference groups are known to be a set of people who have a direct or indirect influence on other
people’s attitudes or behavior.
Reference groups are extremely important in selling tourism products because the product is
intangible; hence, word of mouth plays an important trigger for purchase decisions.

Personality and Self-concept

Personality refers to distinguishing psychological characteristics that lead to relatively consistent
and enduring responses to the environment.
A consumer’s self-concept refers to his personal mental picture

People who are friendly and outgoing would likely be found in

restaurants that project a friendly and outgoing image
Introvert people would likely meet up with a friend in quaint restaurant, and not in bars and clubs
THE BUYER DECISION-MAKING
PROCESS

•promotional strategies are

Need/Problem creatively developed to
Recognition make people think that they
need the product

Information •once a consumer recognizes a specific

need, he may or may not be prompted
Search to search for more information

•this stage allows prospective customers to make

Alternative detailed comparisons of different product or
Evaluation service providers since they already have
sufficient information

•this is the stage most awaited by

Purchase tourism marketers. This is when
consumers actually make the
Decision purchase decision

•it is extremely
important for
product or service
Post-purchase providers to
ensure that
Evaluation customers have a
good experience
with the product.

Figure 3.4 Stages of Buyer Decision-Making Process

CUSTOMER SATISFACTION
THROUGH SERVICE QUALITY

Service Quality – as defined in businessdisctionary.com is an assessment of how well a

delivered service conforms to the client’s expectations.

Benefits of Service Quality

Elucidated benefits of service quality (Kotler et al. 2010):
1. Customer Retention. Service quality helps build loyalty among customers and makes
these customers speak positively about the service provider.
2. Avoidance of Price Competition. Providing high quality service helps in maximizing
potential revenue and veers the company away from a price war.
3. Retention of Good Employees. When an operation is well run and produces high quality
products, recruitment, training, and retention of employees are easy.
4. Reduction of Costs. Costs are minimized if there are repeat customers, absence of a
price war, and low turnover rate of employees.

Repeat
Service Satisfaction Purchase
Quality
Referrals
to friends

Figure 3.5 Relationship of Service Quality, Customer Satisfaction and Word of Mouth
 ORGANIZATIONAL BUYER
BEHAVIOR
▪ The organizational buying process is a more formal version of the consumer buying
process discussed earlier in this lesson.
▪ Organizational buyers commonly respond to both economic and personal factors
▪ Major influencers of purchase would include cost and economic outlook, organization’s
objectives and personal agenda, interpersonal factors at play between buyers and sellers,
and personal motivations, perceptions, and preferences.
The purchase decision process in organizations is more complex than that of individual purchase.
Kotler et al. (2010) describe the process as follows:
1. problem recognition
2. general need specification
3. product specification
4. supplier search
5. proposal solicitation
6. supplier selection
7. order routine specification
8. performance view

TYPOLOGY OF TOURISTS
Plog’s Tourist Motivation Model (1974) – classifies travelers as allocentrics and psychocentrics,
adds “energy” as a determinant of (high or low) levels of activity

Allocentrics – prefer what is new, unstructured, exotic or unusual in terms of trips or destination
choice
Psychocentrics – are those who prefer the structured and familiar
Midcentrics/midcentrism – wherein a tourist could portray characteristics of both allocentrics
and psychocentrics depending on the situation or season
Cohen’s Model (1972) – proposed four classifications of tourists: the organized mass tourists, the
individual mass tourist, the explorer, and the drifter.

The organized mass tourist – is the type of tourist who buys all-inclusive tour packages and
ensures that everything goes as planned.
The individual mass tourist – is more autonomous that the organized mass tourist preferring to
travel independently, but still chooses popular destinations and activities.
The explorer – seeks new areas but would sometimes opt for the comfort of familiar
accommodation
The drifter – is the free spirit who avoids any kind of traditional tourist establishments

Stewart’s Model of Holidaytaking

This model was based on a study of United Kingdom holiday makers conducted by Henley Centre
by Stewart in 1993
The model is built on the concepts that as people become more affluent, they tend to travel more
and the travel experience is cumulative
They also tend to be more adventurous and confident as their level of affluence and travel
experience increases. Stewart distinguishes the following four phases of holidaytaking:

1. Bubble travelers – have low affluence, low travel experience, and observe foreign culture
from a bubble. This gives them basic confidence to travel.
2. Idealized-experience seekers – have more affluence and a base of overseas travel
experience, which gives them more confidence.
3. Wide-horizon travelers – have more affluence, greater confidence, and more travel
experience; now ready for more individually oriented travel to a wider range of
destinations.
4. Total immersers – do not seek to merely observe but to be exposed fully to another
culture’s language, food, heritage, and lifestyle.

The Non-Users
Successful marketing efforts should cover the different segments of the market. While relationship
marketing. Which focuses on customer retention, has become a popular marketing alternative,
marketers should continue to make efforts to acquire new customers. The best way to do this
would be to target the non-users.
Non-users can be classified as:
(1) Ex-users who stopped using the products/services for various reasons
(2) Customers who are aware of the product or service but need to be persuaded to purchase,
and
(3) Those who are not aware of the product or service’s existence
Though research shows that it is more expensive to acquire new customers, a company needs
to have a steady flow of new customers for it to survive and eventually flourish.

Application

What are the factors that influence consumer behavior? Give examples of how they are in the
Philippine setting.
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 Assessment

Interview a friend or relative who frequently travels out of town or out or the country. Ask about
the factors that influence his/her destination choices. Write a 500-word essay about his/her
consumer behavior.

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If you put off everything till you're sure of it, you'll never get anything
done."