In the recent past, the world has been through a fast paced transformation of lifestyle and preferences. This has been marked by tremendous changes in the way people spend on leisure and recreation especially on tourism. Likewise, many economies have been facing hard economic times forcing creativity and cost saving strategies to take toll in the delivery of goods and services. Specifically, tourism is a very ancient activity which ranges from field executions, adventure tours, special-interest tours, regional or city tours, fully escorted tours and group tours (Fay, 2002). Despite all these forms of tourism, harsh economic times have led to emergence of package tours which are holidays where a variety of services are paid for once and for all. Basically the costs are inclusive of all necessities that a person on voyage may find essential. Such tour packages come with services such as accommodation, transport, tour guides, insurance, transfer costs between sites, entrance fees paid to warders at scenic attraction sites, tickets to events and meals. The costs also vary depending on time schedules or number of days to be spends on tour sites, ability and willingness to pay for the goods and services. To this end we discover that tourism is a recreation activity which is conducted at a person’s convenience therefore it is a leisure activity. Tourism being a leisure activity, it is worth noting that over a short time frame the consumer behavior is bound to be irregular pegging on the fact that expenditure on recreation is seasonal if not cyclic. In this paper, there is need to establish fundamental differences between group packaged and individual tours, their merits and demerits, and finally try to integrate the two forms of tourism for the sake of saving costs.
Consumer behavior entails the study of processes used by individuals, organizations and groups of buyers to acquire and dispose services, products, goods, ideas or experiences in order to satisfy human wants. Human wants are psychological therefore buyers are guided by social anthropology as well as economics. Through the study of consumer behavior, marketing managers are better placed to make subtle decisions regarding market segments they wish to exploit. In addition, comprehending the behavior pattern of customers will fashion strategic managers with essential data necessary to facilitate decision making. This research is double faced since it provides comparisons between group tours and individual tours while at the same time exploring strengths and possible bottlenecks associated with both forms of tourism. In a nutshell fundamental elements of individual consumers are brought to light since they are dictated by behavior variables and demographics. In the end, the research will establish if the psychology of a consumers is dependent on friends, family, society, class or reference groups.
The behavior of customers is so dynamic since buyers patterns are literally unpredictable, it therefore requires a distinction in the roles played by consumers ranging from being a payer, a user or a buyer of a product. By so doing a researcher will have an easy time predicting consumer patterns of clients and establishing relationship marketing techniques; this is a very powerful asset used in the analysis of consumer behavior because it establishes a keen interest in redefining the meaning of marketing. On the other hand relationship marketing emphasizes on the need for rediscovering customers while placing a greater importance on the need to retain current customers, manage customer relationships, customize and personalize a one to one marketing approach.
Tour Packages and their Applicability to Consumer Behavior
Today there are many types of tourism packages basing on the suitability, convenience, cost and affordability. Researchers have established that these many packages have emanated from the need for service providers to meet the varied desires and needs of customers. Tour agents and brokers find it prudent to design various packages and assign them with respective cost element which makes these packages affordable depending on the willingness of the customers to spend. While other customers will want a customized and economic tour package, extravagant or fun loving customers will prefer a prestigious treatment during their voyage. The packages can be broken down further into; first, special interest tours which are excursion focused on a specific area of interest for instance sports, arts, agriculture, and culture (Wang & Hsieh & Huan, 2000).
Secondly, adventure tours which are sight sees designed to encourage customer participation for a period of time that has been agreed upon by the tour agents. It is based on the customers gaining firsthand experience of the trip depending on their physical capabilities. This package is more enjoyable if practiced in groups since it entails physical activities thus encouraging bonding and socialization. Examples are mountain climbing, diving, skiing, diving and cycling (Solomon, 2004). Thirdly, there are regional or city tours. They last for a span of one day within which the tour participants have to visit areas of interest within specific places in the city. The places visited could be religious, cultural, and historical and the tour agents have to provide the tourists with meals and refreshments as stated in the package agreement.
Down the list is group tours which follow a pre-arranged or fixed schedule. This type of a tour is specific on the number of participants required making it very tricky for the organizers to establish the needs of each and every customer in the group. On the other hand, tour agents would want to capitalize on the large numbers in order to increase their profit margins or else they might go at a loss for entangling themselves in unprofitable group tour arrangements. The number of people in a group will definitely be limited to the mode of transport being used and availability of accommodation facilities. It also entails accompaniment by tour guides who may divide the groups into sub groups to ease movement and save on time which is a cost determinant.
Finally is the fully escorted tour where a traveler is offered security by a specialized security firm. It is an expensive type of tour since it entails offering of personalized services for instance security against hostility since most of these tour packages are educational in nature, the tour guides or escorts are more often than not authentic inhabitants of a place (Shell, 2009). They are therefore equipped with knowledge on history and cultures making them expensive. On the other hand they are very resourceful making them a preferred choice for the lovers of fully escorted tours. The consumer behavior under each of this classification is very unpredictable because most of the customer’s decisions is influenced by affordability, family, culture and above all, by the spirit of adventure.
According to secondary data collected by a group of consumer behavior analysts; eight people were sampled basing on the social welfare function and assumptions of anonymity, decisiveness, anonymity, neutrality, monotonicity, homogeneity, unanimity and Pareto optimality (Schwartz, 2004). The results collected by this group of researchers will be helpful in elucidating the main points on consumer behavior analysis. With the understanding that marketing is a special program designed by an organization to satisfying customer’s needs, the productive system employed by tourist firms is regulated beginning from production levels in such a way that it will market services offered by the firm and increase profitability. The marketing managers often design strategies that maximize on revenues while cutting down on costs and expenditures. In the research it was discovered that tour agents dealing in group package tour enjoy economies of scale because they pay for services in bulk.
Likewise a strategic manager could conduct a parallel research similar to that undertaken by consumer analysts in Hong Kong. The research could emphasize on the comparison of the stimulus listed in the consumer behavior black box model shown below (Schiffman & Kanuk, 2007). In considering the stimulus listed in the black box model, it will act as a research tool or a guided questionnaire which limits the researcher on the scale of coverage in terms of establishing consumer behavior in relation to tourism and the motive behind how consumers spend their incomes leisure and recreation.
BUYER’S BLACK BOX
A diagrammatic representation of the black box model (Foxall, 2005)
The model shown above identifies the interaction between stimuli, decision processes, consumer characteristics and responses as portrayed by consumers during the research. Using the model, consumer behaviors can be noted depending on the stimuli for instance interpersonal and intrapersonal stimuli. The model is a reflection of the black box theory which attempts to explain behavior of consumers in service related industries such that marketing managers use these stimuli to draw relationships between them and consumer response (Kuester, 2012). In addition the black box model encloses buyer’s psychology and characteristics which are the main determinants of consumer responsiveness. Under this section, the researcher established that tourists are driven by conscious judgment of the both group package and individual tours hence establishing a fair ground for rational decision making.
As it was reported by Heung & Chu (2000) in a Chinese Journal; “Important factors affecting Hong Kong consumer’s choice of a travel agency for all-inclusive package tour”, a sample research was conducted in Hong Kong which is a very big city boasting of being among the best metropolitan cities in the world. Although the sample population of one city cannot be a representative of the consumer patterns portrayed by tourism industries around the world, it would be wise to use the report on Hong Kong since the city is fast paced and employees get exhausted due to long working hours with little time to rest. Given such working environments, employees get some times-off to relax (LeBlanc, 2002). It was established that most people prefer all inclusive group package tours to individual tours. The services are provided by tourism agencies that can be found through online platforms such as company websites. According to the findings collected using an open ended questionnaire it was discovered that tourists have different needs and expectations. The needs could be ranked in a descending chronology starting with price, itinerary, accommodations, meals, transportation, departure date and time, hotel facilities, reputation and last on the list is brand of travel agency. The needs portrayed by the consumers influence how customers purchase packages for their tours.
The group of consumer behavior analysts observed that out of the eight customers that were sampled from Hong Kong city to fill in the questionnaires, six of them identified price to be the number one determinant of consumer behavior. It therefore becomes evident that customer needs are limited by the size of their wallets hence some customers may prefer going for a group package tour rather than individual tour not because they desire to but because they are limited by their income or budget. This is where the need for integrating group package tours with individual tours so as to satisfy customers who have a desire of individual tour but want to also look for the benefit of lower price and lower hassle which group packaged tour could offer. It is after prices have been considered that other factors in the needs bracket are made too surface which means that they are not as essential as price factors. Only four correspondents stated to care about the itinerary drafted by the travel agents. On the same note four other customers supported accommodation mattered while touring because they could opt for adventure group package tours so that they can pitch tents in the wild and spend the night in company of other tourists (Heung & Chu, 2000).
Only three people considered modes of transportation as a determinant in deciding between group package and individual tour. They stated reasons such as maintaining their reputation and class which makes it evident enough that in our situation, transportation is but a secondary determinant in determining customer behaviors. Moving down with our analysis on the needs of customers and how it determines their selection of a suitable tour package, it becomes imminent that only one person would have issues with hotel facilities. The customer in question is after luxurious offers which can be best offered by under the fully escorted individual tour package since they can proffer spa and hot spring services which is a luxury. The main factor behind these findings is that customers have varied attitudes, motivations and perceptions and this influences their tour consumption behavior.
Pros of Group Package Tours
Group package tours are cost saving because they travel agencies buy the packages in bulk therefore they can compete for services in the tourism industry for instance hotels and scenic site. In addition, the agencies enjoy economies of large scale or impulsive buying of packages thus their rates can be discounted or subsidized (Dellaert & Ettema & Lindh, 1998). The benefits can trickle down to customers through subsidized prices. The same effect is spread to meals making them affordable. Secondly, the operators take the bigger part of responsibility that could otherwise have been passed on to the tourist in the case of individual tour. In the event that something goes amiss then the operators or agencies involved will be charged with the responsibility of solving problems on behalf of the tourists.
Group package tours are time saving and convenient since the agents deal with making travel and accommodation arrangements. This saves on time an individual tourist could spend putting in place orders and booking appointments with several services providers. From the outward aspect people traveling in groups will socialize along the way. Besides, people traveling in groups are assured of quality since tour operators have specialized in analyzing customer behavior hence they are away of tour companies offering best services and they are able to establish areas that would be fascinating to the tourists. Some advantages will also be accrued by the travel agents who take the initiative of organizing group package tours at affordable rates. Agents get paid 10% commissions for their job.
Cons of Group Package Tours
To some extent, group package tours are inflexible because tourists have to follow a given schedule and wait for schedules regarding travel, because it entails a collection of many people. Also, travel agents find it tricky to organize and control groups especially during off peak seasons when the number of people willing to go on tours is below breakeven point. The operators may also be faced with challenges beyond their control but they will have to bear the brunt of angry group tourists who might not be willing to understand.
Pros of Individual Tours
Some countries attach a more personal touch to tourists using individual tour option. China is an example of a country where individual tours are cheaper and a ticket to receiving special treatment such as personal care, sense of control, handy services and time flexibility (Engel & Blackwell, 2006). Moreover, a tourist opting for private tours is bound to enjoy flexibility of schedules since he or she could have the opportunity of doing exactly what they want to do unlike in a group tour where everything is fixed and hard to negotiate. In addition, a family with children should think of using private or individual tour since the parents can plan events that will be perceived relevant to both age groups involved.
Cons of Individual Tours
Private tours are expensive in relation to group packaged tours because of the bulk involved. Whereas the latter enjoys economies of large scale buying of goods and services, the former has to go through the hustle of paying for each and every individual services hence it is expensive.
From the above comparisons the research established that consumer behavior is key in weighing the best option between group packaged tours and individual tours (Kotler & Bowen & Makens, 2003). To find the best alternative to integrate individual and group package tours, then agents will have to work out a strategy that will work to the advantage of both groups. This means that an agent may have to prepare new rates and schedules which allow tourists interested in having a taste of both travel and tour arrangements gain maximum benefits from both arrangements. It would be prudent for the costs to be the average of individual tour costs and that of group packaged tours. Therefore a person undertaking the third option should be ready to incur costs at a personal level.
The agents will also be responsible for providing only the services agreed upon while neglecting the other services at the expense of the tourist. For instance, assuming someone was interested in the integrated option, he or she will be free from the scheduled group tours thus this will be the perfect opportunity to visit places of one’s choice. Under the integrated option, the tourist will have to be pay consult with the travel agent for transport, insurance and accommodation services so that they enjoy subsidized group rates whereas they can determine places to visit on their own while paying for entry fees. The integrated option would be the best option for customers who want to satisfy the desire for individual tour but want to also look for the benefit of lower price and lower hassle which group packaged tour could offer.
Practical Application of the Research
Much weight of this paper is laid on the aspect of analyzing consumer behavior in relation to tourism and recreation industry. It is based on updated and current information relating the current state to tourism statistics. It lays out a learning outcome fashioned with knowledge on factors influencing buyer behavior. This information is essential to a marketing manager who may be interested in studying the consumer behavior in the tourism and recreation industry for the sake of control management of future forecasting.
The study emphasizes that theories of motivation are very applicable in influencing customer behavior towards liking for any of the two forms of tours; group package tour and individual tours (Deaton & Muellbauer, 2008). Most customers are guided by motivation which inevitably implies that tourists have a liking for fascination and nature. A strategic manager in conjunction with the marketing manager should strive at using advertisements to create psychographics in the minds of the consumers. All this can be done in a bid to influence or motivate customers into anticipating for such a tour. Travel agents would major their advertisements towards making people to appreciate group packaged tours so as to win a certain segment of the consumer market. In short a manager who approaches the market with caution and intensive analysis of consumer needs will understand the psychology that guide decision making in tourists and capitalize on it during peak seasons. A manager may therefore make use of Maslow’s hierarchy of needs to deterring the social class and consequently the motivation behind customer’s selection among the two classes of tourism.
Looking at this report from the customer’s point of view, a customer who reads this report is bound to justify why he or she tends to behave in a certain way. Mostly, a travel agent will want to create advertisements that motivate customers by driving their instincts into wanting to visit a place, regretting a certain events, nostalgia or fantasies. All this are suitable strategies that can be molded into an individual’s perception of holidays. On the other hand, this report may consumer educate consumers on the decision buying process applicable in the tourism industry. According to Burke & Resnuk (2001), the stages start with arousal or recognition of need, it then develops into a nagging interest or want, the customer then identifies an alternative assessment of substitute decision choices. These stages finally induce a customer into either group packaged or individual tours.