 Submitted by: Mustafa Arshad

 Submitted to: Miss Nirmal Saqib

Introduction to Consumer Behavior:
The study of consumers helps firms and organizations improve their marketing
strategies by understanding issues such as how

 The psychology of how consumers think, feel, reason, and select between
different alternatives (e.g., brands, products);
 The psychology of how the consumer is influenced by his or her
environment (e.g., culture, family, signs, media);
 The behavior of consumers while shopping or making other marketing
decisions;
 Limitations in consumer knowledge or information processing abilities
influence decisions and marketing outcome;
 How consumer motivation and decision strategies differ between products
that differ in their level of importance or interest that they entail for the
consumer; and
 How marketers can adapt and improve their marketing campaigns and
marketing strategies to more effectively reach the consumer.

Definition:

The term consumer behavior is defined as the behavior that consumer display in
searching for purchasing, using, evaluating and disposing of product and services
that they expect will satisfy their needs. Consumer behavior focuses on how
individuals make decisions to spend their available resources (time, money, effort)
on consumption related items. This includes what they buy, why they buy it, when
they buy it, where they buy it, how often they buy it, how often they use it, how
they evaluate it after the purchase and the impact of such evaluation on future, and
how they dispose of it.

Factors that influence Consumer Behavior:

There are various other factors influencing the purchases of consumer such as
social, cultural, personal and psychological. The explanation of these factors is
given below.

1. Cultural Factors:

 Culture
Basically, culture is the part of every society and is the important cause of
person wants and behavior.
 Subculture
Each culture contains different subcultures such as religions, nationalities,
geographic regions, racial groups etc. Marketers can use these groups by
segmenting the market into various small portions.
 Social Class
 Every society possesses some form of social class which is important to the
marketers because the buying behavior of people in a given social class is
similar.

2. Social Factors:

 Reference Groups

Reference groups have potential in forming a person attitude or behavior. The

impact of reference groups varies across products and brands. For example if the
product is visible such as dress, shoes, car etc.

 Family

Buyer behavior is strongly influenced by the member of a family. Therefore

marketers are trying to find the roles and influence of the husband, wife and
children.

 Roles and Status

Each person possesses different roles and status in the society depending upon the
groups, clubs, family, organization etc. to which he belongs.

3. Personal Factors:

 Age
Age and life-cycle have potential impact on the consumer buying behavior.
It is obvious that the consumers change the purchase of goods and services
with the passage of time.
 Occupation
The occupation of a person has significant impact on his buying behavior.
  Economic Situation
Consumer economic situation has great influence on his buying behavior. If
the income and savings of a customer is high then he will purchase more
expensive products.
 Lifestyle
Lifestyle of customers is another import factor affecting the consumer
buying behavior. Lifestyle refers to the way a person lives in a society and is
expressed by the things in his/her surroundings.
 Personality
Personality changes from person to person, time to time and place to place.
Therefore it can greatly influence the buying behavior of customers.

4. Psychological Factors

 Motivation
The level of motivation also affects the buying behavior of customers. Every
person has different needs such as physiological needs, biological needs,
social needs etc.
 Perception
Selecting, organizing and interpreting information in a way to produce a
meaningful experience of the world is called perception. There are three
different perceptual processes which are selective attention, selective
distortion and selective retention
 Beliefs and Attitudes
Customer possesses specific belief and attitude towards various products.
Since such beliefs and attitudes make up brand image and affect consumer
buying behavior therefore marketers are interested in them.
Challenges of Quality Services:

1) Understanding customer expectations

Customer satisfaction reflects the expectations and experiences that the customer
has with a product or service. This information influences our expectations and
gives us the ability to evaluate quality, value, and the ability of the product or
service to meet our needs and expectations.

2) Reaching out to customer

Modern customers are becoming more and more demanding to brands. We cannot
ignore the fact that 84% of millennials don’t trust traditional advertising. Old
methods to reach customers no longer work as they had worked before. Together
with personal selling, advertising, and sales promotion marketers need to offer
creative content.

3) Exceeding customer expectations

Essentially, exceeding the expectations of your customers means that your business
is continuously growing and improving, and people would always want to be
associated with the most innovative, well-developed brand out there.

4) Consistency

Whenever possible, only take a course of action if you can honestly answer that
you would make the same decision for any other employee presenting the same set
of circumstances. Consistency means you are not playing favorites.

5) Employing skilled customer service professional

Customer service is both a type of job and a set of job skills. As a job, customer
service professionals are responsible for addressing customer needs and ensuring
they have a good experience. As a skill set, customer service entails several
qualities like active listening, empathy, problem-solving and communication.

6) Creating a customer first culture

Creating a customer-first culture means teaching your staff how to put the
customer first at all times. Whether it's a new hire or an old pro, take time to train
them on how to offer customer-first service.

Impact of digital technology on changing consumer behavior:

1. Decreased customer attention

With millions of blog posts and videos posted online every day, there is way too
much content for people to consume.

Put simply; all these content is causing content overload in the lives of billions of
people around the world. There is too much content to consume, too many emails
to reply to and too much to do by the end of the day.

2. The need for personalization

According to Hub Spot, people crave interaction with a person, pieces of content or
software that leave them with the feeling that their preferences and interests were
being taken into account.

It used to take lots of resources to create and sell a course, but that has now
changed. Technology has made it so easy to create digital courses, such that
anyone with a computer and access to the internet can set up a website, create a
course and then start selling it.
3. The ease of access to info

A few years ago, customers made buying decisions based on news, advertisements,
past experience or referrals from other people.

However, technology has changed this. A report by Econsultancy found out that 61
% of customers use search engines to aid them in product research before they can
make a buying decision.

4. Brand trust and likability

Gone are the days when customers bought from a business just because there were
no alternatives. Technological advances have made it easier for more people to
launch online businesses for just a few dollars.

5. Customer expectations have gone up

Technology has made it very easy and cheap to create businesses. This has resulted
in very many businesses offering related products; products that fill similar needs
in the lives of their customers.

6. The increasing need for ’good’ customer experience

A few years ago, customers could make a purchase regardless of how the
experience made them feel. Most buying decisions were made out of a product
fulfilling their needs and not the customer’s experiences with the business.

Emerging consumer trends affecting hospitality industry:

1. Catering to millennials

Millennials (those ages 18-34) are expected to represent 50% of all travelers to the
USA by 2025, according to the Cornell Center for Hospitality Research.
Companies need to define their strategies based on this demographic group’s
personality traits and habits—they travel a lot; are early adopters of technology.

2. Tech explosion

The majority of guests today are self-sufficient, tech-savvy travelers who are
comfortable using apps or mobile websites. Hotels need to make sure their
offerings are up-to-date and user-friendly.

3. Influx of international visitors

International leisure travel is on the rise—Dubai International Airport has become

the busiest airport in the world. Hotels must be able to provide services in a
multitude of languages, and tailored experiences properly suited to the culture and
unique needs of their international visitors.

4. Increased emphasis on health and well-being

Guests today are taking charge of their health; hotels are responding with well-
equipped fitness centers, pools and spas. Increasingly, travelers are expecting
innovative wellness options.

5. Need for seamless technology

Seamless connectivity across platforms and devices is growing more important.

Many hotel groups are offering mobile check-in and digital concierge services.

6. Sustainability rules

Eco-friendly practices are becoming the norm, as properties focus on renewable

energy resources and water scarcity. Many hotels are installing solar panels and
updating systems so that air conditioners and lights automatically switch off when
guests leave their rooms.

7. New roles for staff

Many travelers seem to prefer technology to human beings—they want to check-in

digitally and don’t mind if a robot delivers room service. This will give staff the
opportunity to focus on more personalized service, as opposed to rote tasks.

8. Destination promotion

The explosion of social media is causing hotels to become more involved in

destination and self-promotion. Many are featuring guests’ images and tweets on
their websites; some are even using the material in their advertising campaigns.

9. Real-time damage control

If a hotel guest is dissatisfied, he or she can easily complain on Facebook, Twitter,

Yelp or TripAdvisior. Hoteliers must be able to quickly respond.

10. Unique perks

With so many brands to choose from, properties need to find a way to stand out.
Some are offering free daily wine tastings in their lobbies or bars; some are
incorporating sophisticated informational screens in bathroom mirrors; and others
are giving away curated set lists of downloadable music.