Abstract - This report will be developed to discuss how consumer behavior has changed among customers purchasing package holidays from the past to the modern day. There will be a host of theory to discuss the evolution of the industry and examples to critically evaluate the discussed question. The development in technology has changed the booking process of holidays. This change has dramatically impacted consumer behavior within towards high street travel agent purchases. The report has been developed using adobe spark, this will add engagement and visuals for the reader.
High Street Travel Agents - Thomas Cook Plc
• Consumer Behaviour
• Learning types
o Observational Learning
o Cognitive Learning
• Generational Behaviours
o Pre-Internet Generation
o Post-Internet Generation
Introduction - This report is designed to look at the consumer behaviour towards the purchasing of holidays in the UK. The way in which consumers now purchase has changed from previous generations, this report will discuss why. There are theories behind the decision-making process, these will enable the reader to understand behaviour trends. The report will refer to the past generations spending through the traditional high street and how the trend has changed once the internet was introduced in the 1990s, this has ultimately affected the industry and the decision-making process. The report will be presented on adobe spark as visuals will help the reader engage further with the topic.
Background - This section will allow for a brief overview of the history of the industry. The industry dates back over 250 years, the first established travel agent was Cox and Kings, they helped develop the tourism industry throughout the world and are still in existence today (Cox & Kings Travel, 2017). One of the UK’s largest travel agent is Thomas Cook Plc which was founded in 1841, the organisations evolution has arranged for their customers to travel all over the world. Thomas Cook now have over twenty million customers with sales of over £9 Billion annual revenue, the organisation boasts over twenty-seven thousand employees over seventeen different countries (Thomas Cook History, 2017). The industry has seen a shift from the traditional high street shops to the internet since it was introduced in the 1990s, this has seen the liquidation of many travel agencies.
Consumer Behaviour - This is a brief overview of what Consumer behaviour is. This is the “study of the processes involved when individuals or groups select, purchase, use or dispose of products, services, ideas or experiences to satisfy needs and desires” (Solomon, Bamossy et al. 2006, p6). A further explanation regarding consumer behaviour is displayed with the use of a theory model (see Figure 1). This model developed by Mothersbaugh and Hawkins (2016) shows the process a customer will go through in order to make a purchase of a tangible or intangible product. It is important to remember that there are two main types of learning these are Behavioural and Cognitive. For the purposes of this report the focus will be on the Cognitive learning and the decision making process.
Figure 1) Consumer Behaviour model (Mothersbaugh and Hawkins, 2016)
Learning Types -There are four main learning types that will be considered during this work, these consist of Observational, Cognitive, Consumer and Instrumental. The theories that will discussed in the report are Cognitive and Observational as they link to the generations in the next sections. The consumer and instrumental theories are not of high relevance due to the level of involvement wouldn’t allow for a trial and error process (Instrumental) or a paired stimulus reward process (Consumer Learner). The consumer would describe an average holiday as having various levels of involvement in the purchase. The decision-making strategy will change with the level of involvement the consumers feels, this could vary on financial aspects, length of visit, destination etc.
• Cognitive Learning - The first decision making process to be discussed further is Cognitive learning (see Figure 2), this theory is a search and process model where the individual develops their knowledge in order to make an informed decision. This process has many different factors these include perception, retention. Problem solving etc (Oxford Learning, 2017).
Figure 2) Cognitive Theory (Kille, 2010)
• Observational Learning -Observational learning is argues by Bandura (1977) that this process learning is a fundamental part of cognitive theories. The learning occurs through observation and experiences. Learning often derives from imitation from external influences. A brief example is shown in figure three where the child is imitating the grown up, this is observational theory in the simplest form. Alternatively observational learning can be described as ‘shaping modelling and vicarious reinforcements’ this often takes place during younger life through maturity as often the learning comes from authority figures (Schiffman, Kanuk and Hansen, 2008).
Figure 3) Observational Learning (Risetoshinetoday.org, 2015)
Generational Behaviours -This report will consider two different generations the first being pre-internet which should allow for greater comparisons to post internet holiday purchase. These two generations will explain what has happened to the industry during the technology boom and show how the consumer decision making has evolved. These are shown in the two bullet points below:
• Pre-Internet Generations - The pre-internet generation had specific impacts on consumer behaviour, this will be discussed in this section. Diment, (2015) discusses that pre-internet purchases were made from high street outlets, they explained that ‘conventional ways to plan and book a holiday have been thrown out of the window.’ Buying your holiday on the high street was a typical consumer decision due to convenience. The high-street sales would be limited often to Spain, as other destinations did not have the same advertising coverage. This links to consumer behaviours decision making models relatively well as the consumer had limited choices of shops to make the purchase.
The main decision making process the pre-internet generations used is observational learning. The reason this decision-making process has been linked as most decisions will be made through observations of peers, relatives and through word of mouth (a copying process). These holiday purchasing decisions are made from the learning experiences learned through a trusted individual, this could be how your parents booked holidays in the past. Also, pre-internet era did not have the same amount of advertising about the holiday industry, this was limited to TV, Radio, Newspaper etc. There is an underpinning with cognitive learning as the individual would still process all the information, then recall from previous stored knowledge to make an informed decision (Meichenbaum, 1977).
Going Places- Out of Business(Business2community, 2013)
• Post-Internet Generation - The post-internet generation has many more options to purchase holidays, therefore it has needed a more cognitive learning approach from the consumers. Firstly, to explain how the internet has evolved the industry, a survey in 2013 explained that 49% of holidays are now booked online, a 1%-year increase from 2012 (ABTA, 2015). A report by a Travelmail Reporter (2014) adds more reasoning behind the choice to shop on the internet rather than the high-street. In the modern generation consumers have more choice and options while booking such as self-build breaks, add-on and various other options, this lead to 45% rise of high-street travel agents going bust, 77 companies closed in 12 months leading till March 2014. These figures show that the post-internet generations have a more cognitive based decision making model when booking holidays. The Internet has essentially changed the way we examine and book our holidays, consumers research the most intimate details without visiting a high-street store, this is due to various reasons i.e. price¸ convenience or meticulous customer needs. The internet has also opened pathways in advertising that was not available in pre-internet days such as Social Media, Blogs plus many more. This advertising offers further knowledge from academic sources, industry specialists etc. (Trend, 2014).
This consumer behaviour trend is directly linked to cognitive learning, this is due to the complex nature of learning the customer goes through to book their summer holiday. The procedure of gaining information is learned and stored for future recall when the customer decides to book, this learning can be obtained through Social Media, Advertising, Word of Mouth etc. The cognitive process will enable the consumer to evaluate all of the potential options to make the most informed decision through psychological and educational thinking (Shuell, 1986).
This report has shown that consumer behaviour can evolve over time, the complexity of the product can alter the decision-making process. The report has highlighted that pre-internet generations lacked the options of the modern day, therefore their decision process was made much simpler due to a lack of consumer knowledge. Observational learning was the main option as a lot of pre-internet generations learned from their parents and peers, they developed their thinking through childhood based on copying and listening to individuals they trusted and respected.
As the internet revolution hit the world, consumer behaviour changed as the options for the customer expanded such as availability, price, convenience etc. Therefore, the decision was made more complex for the customer, this meant more information was learned, stored and recalled during the buying process. The internet has been detrimental to the post-internet generation as they no longer have the same amount of high-street options, the internet helped diminish the number of travel agent business through competition levels, price and options. The question is will the internet one day destroy the high-street travel agents experience? Only time will tell how this complex industry will evolve.
The final thoughts to this report is that although consumer experience and behaviour may develop over time. The more options available to the customer will only enhance their cognitive learning. The various decision making processes will always improve to the depth of the decision and level of involvement, therefore they are vital to the consumer. What is the next development that will enhance the cognitive learning process?
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