It is a common phenomenon for all the organisations that in order to be more profitable, in order to actually survive within the market organisations therefore must recognise and at all times stay close to the consumers to offer products as well as services which can then be bought by the consumers. In today’s changing world it can be seen that organisations are therefore using a systematic approach to comprehend the behaviour of the consumers constantly on the basis of different marketing strategies. For all organisation it is very critical to understand the consumer behaviour as it is considered an important element in the business industry. It then demonstrates a clear understanding on the consumer behaviour purchasing model, analyses the importance of consumer behaviour for organisations.
The report focuses on the detailed description as to why understanding consumer behaviour is very critical for all the organisations, primary target, and secondary target and how an issue within an organisation could be resolved using consumer insight. It analyses the importance as in why consumers buy the product as there are different types of emotions associated with the consumers while buying a product or a service as all the buyers are different.
The term Consumer Behaviour can be explained as the study of how different consumers generate ideas/ thoughts on several factors such as what the consumers buy which can be a product or a service, why they buy which includes specific reasoning for the purchase, when the consumers buy the service or the product, from where the consumers buy it, how often the consumers buy the service or a product and also how often the consumers use the service or a product. It is also known as a product person situation. (Quester, P., Pettigrew, S., Kopanidis, F., Rao Hill, S. and Hawkins, D, 2014, pg. 53) Consumer Behaviour is basically a discipline trading with how and why consumers purchase or do not purchase goods and services. (Quester, P., Pettigrew, S., Kopanidis, F., Rao Hill, S. and Hawkins, D, 2014, pg. 52). It is ‘concerned with all activities directly involved in obtaining, consuming and disposing of products and services, including the decision processes that precede and follow these actions’ (Engel, J. F., Blackwell, R. D., ; Miniard, R. W., 1995).
An influential cooperation of affect, behaviour and also environmental events in which society or human beings administer the exchange aspects of their lives is defined as consumer behaviour. (Bennett, While, 1995, p. 59). The term consumer behaviour comprises of thoughts as well as emotions the consumers experience in the process of consumption. Consumer Behaviour is the study of processes that basically satisfy their needs, wants and desires when an individual or a group purchase, use, dispose the product. (Solomon, 2009, pg. 33).
Consumer Behaviour model starts with problem recognition where a consumer sees a need or recognises a problem. An example can be where a phone or a laptop doesn’t seem to perform well. Moving on to the next step which is information search where after a problem has been identified where a consumer looks for different options to meet their needs, wants. If a problem is with a phone the consumer becomes more attentive to different mobile brands, keeps on browsing the net or advertisements, could be recommendations from friends, families. The next stage involved the consumer buying model is Evaluation and Selection of Alternatives. In this stage the consumer is basically after the benefits that are provided by the product, whether the product has certain set of attributes such as design, portability, warranty, brand reputation, price and other attributes. The next stage is the buying or could be described as a process that is involved in purchasing. This basically talks about which particular brand or from which particular store the consumer should be looking to buy the product. For example the consumer can first decide the product and then decide from which store or outlet they are going to buy the product from or could be vice-versa which means they first decide from which outlet or store they want to go to and then buy the product. After finalising the brand/ product and the store then comes the post purchase evaluation which includes whether the consumers are satisfied or not with a purchase. It is all based on how customers feel when purchasing a product as whether they will buy the product again or not depends on this factor. Examples can be where a consumer doesn’t feel a need for that particular product, some think have they made the right choice or not, some could be happy.
When discussing about consumer behaviour the word consumer has two different meanings. One is an individual consumer or an individual buyer that purchases goods or services for their personal use which can be used in a day to day life, and the latter one is a consumer that originally exists in the market. Profit as well as non-profit organisations, government agencies are some examples of the latter type of consumers.
Why understanding consumer behaviour is important for organisations
It is considered very critical from an organisation’s perspective to understand the consumer behaviour. Consumer behaviour is very complex because each consumer has different mind and attitude towards purchase, consumption and disposal of product (Solomon, 2009). As consumers are the most important person for marketer or sales person, therefore it is important for them to consider the likes and dislikes the consumers so that they can provide them with the goods and services accordingly (Solomon, 2009). Understanding a consumer behaviour has become a necessity these days if any organisation wants to avoid losses, business collapse and also bad reputation in the market especially before the launch of a product or a service. It is considered that the behaviour of each consumer varies as each of the consumer comprises of different attitudes while purchasing, using as well as disposing the product. Consumers purchase products based on different aspects such as values, situations, for some consumers it is a personal emotion and for some it could mean a particular motive behind it.
Understanding consumer behaviour is very useful and very beneficial for organisations in several ways such as:
• Designing the most effective doable product or service that satisfies the needs, wants and demands of the consumers,
• In terms of deciding the worth of the product or a service consumers are willing to pay, and
• Also looking for the most effective methodology of promotion through which consumers can be persuaded to purchase a product.
The needs and wants of the consumers are different. For example for some consumers that need is a necessity, for some consumers the need is based on love, affection. Therefore understanding consumer behaviours help organisations to understand whether the consumers will purchase the product just on the basis that it is new in the market as well as more popular or the consumers will purchase the product because the product is something that the consumers are genuinely after. (Shethna, Jesal, 2017).
According to Parkinson (1982) consumer behaviour determines the organisation’s success as well as an organisation’s failure/collapse. Organisations such as Apple, Samsung, and YouTube have all understood the needs and wants of the consumers. Such organisations have created the needs and wants that consumers will purchase such as smartphones, laptops, tablets, portable music devices. Another example can be seen where a consumer purchases a product or downloads ITunes Apple has an access to knowledge the company leverages. Apple then uses such data to realise vital insight into the buyer and what drives purchase behaviour. (Zoller, Stephen, 2018).
Understanding ideas of client behaviour at a high-level involves a framework to realise unjust insight from market research. The wheel of client analysis provides a framework to check client behaviour that comprises of affect and knowledge, consumer behaviour and setting. Therefore, consumer behaviour is very important from an organisation’s perspective as products and services are made to meet the needs as well as wants of the consumers. The understanding of consumer behaviour helps organisation in analysing several factors that has an influence on the purchasing decision of the customers.
Organisation’s Name – The Westin, Sydney
Primary Target Audience – Business/ Corporate Clients,
Secondary Target Market – Couples, Families, primary buyers of The Westin’s main competitors.
In this particular hotel/ organisation the primary target is business or corporate clients as they are always on the move. They are considered to be the primary target because of their eagerness to or their company’s willingness to pay higher room tariffs. Corporate Clients travel for a number of reasons such as to attend meetings, to give presentations, to attend conferences, primary targets are always looking for fast internet speed (complimentary wireless, wired), they get an access to all electronic devices such as printers, fax machines, scanners and they also get an access to the club lounge or to the hotel lounge. Such clients are entitled for an express check-in, express check-out, airport transfers and video review billing which means all the arrival and departure formalities take place through hotel’s mobile application.
48% of the guests in the hotel industry are considered to be business or corporate travellers. (Powers, Tom, 2012). Such type of clients get high class service such as quality bed, desk with internet access, access to the business centre, even their arrival and departure formalities are done through the hotel’s mobile application just to save time as these clients expect high quality service. Often during their stay in the hotel they are asked for whether they need their suits dry-cleaned or not and are also offered dry-cleaning services. It is followed by an email sent by the hotel to these clients regarding the list of highest rated restaurants or cafes within the area where the business travellers can take their clients. Such clients are often classified as VIP or VVIP’s and they receive unforgettable welcome as they arrive by helicopter (luxury arrival), they are entitled for services such as private butler
Couples are that kind of travellers who seek different places, restaurants as well as high quality bedding. Couples are seen going to markets, nearby attractions. As they go to a place to enjoy, a weekend getaway just to relax where they can spend some good time, enjoy the moment.
On the other hand when it comes to families they have specific needs as well as wants from the hotel as they are mostly after kid-friendly places, and inexpensive restaurants. Most of the families stay in the hotel but when it comes to dining options, majority of the families dine outside the hotel just in order to avoid inexpensive restaurant costs within the hotel. The families stay in a hotel for entertainment purposes where there kids can have an additional room, they have needs for example they are after nearby rooms or sometimes rooms that are next to each other, interconnecting rooms. Hotels are seen offering discounts to families with kids as promotional basis by offering them packages at a reduced price, sometimes the packages include tickets to an amusement park or to a kid-friendly attraction.
Another segment includes where The Westin can win the primary buyers of their competitors such as Accor, Hyatt, Hilton, InterContinental, Marriott etc by offering them different types of accommodation packages at a lower price, creating touch points with them by providing a valued loyalty program for them, where they can come back again and again as it will develop loyalty among the guests.
Issue that could be addressed by using consumer insights
Talking about issues that The Westin can use customer analytics to improve the guest experience. Therefore, the capability of consumer analytics is a very critical understanding for the hotels as there are considered to be many other ways where a hotel can collect a consumer’s data to build brand loyalty as well as improve their experience in the hotel. In order to improve the guest experience in The Westin they can come up with a mobile application which will offer the guests different types of amenities, that application will even allow the guests to pay for food, they can even choose a particular pillow from the pillow menu, with that app they can unlock their room doors, adjust the air-con temperature in the room. With the help of such application The Westin can use Radio Frequency to commerce the data with the Radio Frequency identification scanners placed around the hotel. This will eventually end up in making a guests experience a memorable one. Using the data provided by the guests and also by looking at previously noted preferences of the guest will allow The Westin to offer an unforgettable experience to the guests. Based on that mobile application the guests will receive a welcome message on arrival.
Another example can be seen where The Westin can play a very significant role in making the guests stay more enjoyable in such a way where guests preferences can be more visible to employees with the help of property management system (Opera) which will automatically show the employees what are the guest’s preferences, what the guests don’t like, for example a room on a higher floor or on a lower floor, a room near the elevators, a room away from the elevators, guest preferences in terms of rooms. Understanding customer analytics can help The Westin in order to deliver a better as well as an improved guest experience, which will ultimately lead to guest’s loyalty.
In order to understand the response from the consumer organisations not only need to look into the factors that are within their control but also need to consider external factors that are beyond their control which play a major role in customer mind set. The consumer behaviour process starts with when a consumer identifies a need and ends with the evaluation of the product where the consumer could be satisfied or not.
From organisation as well as marketers perspective if a consumer is happy with the product or service then the chances of buying the product or using the service increases and thereafter they become a loyal customers and then it can be said that the marketers/organisation’s aim has been met.