Consumer Behaviour

TITLE

Select ONE mass media advertisement of your choice which clearly illustrates how EACH of the following variables;

a) Any TWO external environmental variables influencing customer behaviour, and b) Any TWO internal determinants of consumer behaviour

typically influence customer purchasing decision process for the product or service in question and explain also how the company is addressing these environmental variables and individual determinants of customer behaviour in the advertisement.

SUMMARY

Travel has become a social value in Germany, as much as patriotism or religion, are in other European countries. Influences on German travel consumer behaviour include increasing importance of the 45 + age group, the interest in fitness and wellness, the economic downturn, the fall of the stock markets, the price increase for aviation fuel. More people want relaxation when on vacation. Cruise holidays are becoming more in vogue because of this. With a cruise you can dine, dream and dance as you sail from one foreign destination to the other. Cruises are popular with first time cruisers, young singles, old and young loving the party atmosphere. If one is travelling with kids, you can be sure to give your kids a fun holiday with all kind of games, talent shows parties, movies, crafts, arts and a world of fun under the sun. Enjoyment and well-being are among the most important holiday expectations for Germans.

TERMS OF REFERENCE

This report highlights how environmental variables and individual determinants of consumer behaviour influence the consumer purchasing behaviour in Germany. According to the United Nations Commission on Sustainable Development (CSD), the tourism industry is one of the fastest growing sectors in the global economy with important impacts on the economic, social, cultural and environmental development of many countries and therefore plays a significant role for sustainable development. For the purpose of this report, we will analyse lifestyles and social class as the external variables influencing customer behaviour, while, motivation and age groups as internal determinants.

INTRODUCTION

[pic]

Air Maritime is a company based in Germany, which specialises in the selling of holiday cruises. Air Maritime has been established for more than twenty-five years and organises both river and sea cruises. As part of the FTI GmbH International group, Air Maritime is mostly renowned in offering luxurious cruises in the Mediterranean and Caribbean Sea as well as in the Atlantic Ocean. Reference is made to the company brochure (appendix one). This brochure is published once a year and is distributed throughout different travel agencies in Germany.

[pic]

FINDINGS

Holiday cruises are a key market segment. With cruises, travel agents get commissions on the entire cruise. What is interesting for travel agents is the rapid growth and expansion of this sector. The growth of the cruise industry has been of titanic proportions.

Sales in Germany for ocean-going cruises reached 1.14 billion Euros in 2004. According to “The German Cruise Market 2004”, the annual study of the German Travel Agencies and Tour Operators Association (DRV), increased by 6.3% compared to 2003. The total number of passengers was 583,043, plus 8.5%. The average voyage lasted 9.8 days, the average price per cruise dropped by 2.1% to 1,955 Euro. The market share of German cruise companies was 66.4%. 32% of all voyages took place overseas (mostly Caribbean and South America), the share of European routes dropped from 75.7% in 2003 to 68% in 2004. 59% of cruise retailers reported more customers than 2003, 28% less, 13% no change in numbers. For the running year a plus in passenger numbers is expected by three quarters of those surveyed, while 86% foresee a plus in sales.

Table 1 – Comparison of statistics 2003 and 2004 for Ocean-going cruises.

|Ocean-going cruises |
| |2003 |2004 |
|Turnover in Euros |1,072,436.50 |1,140,000.00 |
|Passengers |537,367 |583,043 |
|Average Price in Euros |1,996.94 |1,955.00 |
|Market Share European Routes |75.7% |68.0% |

Sales in Germany for river cruises reached 355.6 million Euros in 2004. According to the same source used for the ocean-going cruises, sales increased by 13.3% compared to 2003. The total number of passengers was 306,516, plus 11.5%. The average price per river cruise climbed from 1,142 Euro in 2003 to 1,160 Euro in 2004. Growth destinations were the Danube, the Nile and the Jangtsekiang (in China), while France, Russia and the Ukraine lost German passengers. 74% of river cruise retailers reported more sales than 2003, 17% less, 9% no change in sales. For the running year most of them expect growth in passenger numbers and sales.

Table 2 – Comparison of statistics 2003 and 2004 for River cruises.

|River cruises |
| |2003 |2004 |
|Turnover in Euros |308,090.00 |355,600.00 |
|Passengers |271,083 |306,516 |
|Average Price in Euros |1,142.00 |1,160.00 |

The two internal determinants of consumer behaviour being discussed are Age and Motivation.

Age

One of the trends that will not escape the travel and tourism industry in Germany is the demographic trend that points to an ageing population in most industrial societies. This means that our travellers will be older and, although healthier and fitter, will require special attention by travel suppliers to woo, win and keep the mature traveller. There is a continuing rapid increase in the number of outbound travellers aged 45 years old and over. It can be seen that the 60 + population has nearly doubled from 10m in 1950 to almost 18m in 1997. The age groups 0-15 and 15-21 have also declined. The age group 40-60 year olds have increased from 17m in 1950 to 23m in 1997. In summary, the 0-21 year olds are decreasing and the 21+ year olds are increasing. Travel and tourism suppliers will need to respond creatively to the needs of this market and provide the exact services required and exceed the clients’ expectations.

Graph 1 – Comparison of age groups over the years

Cruising was once regarded as a pastime for the elderly and wealthy, but this stuffy image has been swept away, along with complicated dress codes and regimented mealtimes. In fact cruising is developing a wider appeal all the time. It is appealing to younger and elderly people, to families and to adventurous individuals who may not have considered a cruise before. Air Maritime is making sure that its brochure is directed to all age groups by offering different activities and entertainment suitable for all. Even the ports that Air Maritime is visiting are spread worldwide which makes it attractive to both the elder and the younger generation. Air Maritime also offers full-service weddings and receptions, for an all-inclusive experience. Ceremonies are available on board ship and at many ports-of-call. Imagine exchanging vows atop a glacier in Alaska!

Motivation

Relaxation and the desire to get away from everyday life is the key motivating reasons to go on holiday. Nevertheless Germans are giving more importance to what they do while on holiday. Some will want pure relaxation which will lead to growth in wellness therefore they will choose cruise and all-inclusive holidays. Others will want active holidays, which will cover all kinds of activities. This means that a wider range of holiday products needs to be offered.

Air Maritime offers through its brochure holiday cruises as a perfect way to pamper oneself. One does not have to worry about paying extra for meals, entertainment and a range of activities. Everyone on board is in capable hands of fitness experts having massages, loofah treatments, hairstyles, saunas, pedicures, applying soothing masks and micro-facelifts. There is a complete relaxation schedule for you with nautical spas, and the exercise programs. Taking a cruise vacation frees you from some of the hassles of travelling. Also Air Maritime offers a variety of shore excursions at additional cost. These adventures are geared toward the unique features of the destination.

Graph 2 – Motivational reasons for spare time mobility

The two external environmental variables influencing customer behaviour being discussed are Lifestyles and Social Class.

Lifestyles

Germany is overwhelmingly urban, and most people lead a prosperous, comfortable lifestyle. High living standards, plentiful leisure time (three weeks or more of mandatory paid vacation), and comprehensive social welfare benefits distinguish German society. Germany has a highly urbanised society, with lifestyles that emphasise recreational, leisure, and physical fitness activities. Many Germans enjoy hiking, camping, skiing, and other outdoor pursuits. They are also known for their love for food, especially rich pastries, veal and pork dishes, and various types of sausages and cheeses. German-made wine and beer are famous all over the world. Also popular are lively social gatherings at outdoor beer or wine gardens or cellar restaurants where wine or beer is stored.

“All the world’s a stage”, the saying goes and on your cruise, your ship is the stage for a world of colourful entertainment and nighttime enjoyment. And best of all, there is no cover charge, no tickets to buy or reserve, no waiting in line. Dazzling musical revues salute the very best of Hollywood and Broadway, with advanced lighting and sound systems and spectacular special effect. As one leafs through the pages of the Air Maritime brochure, one notices that there are all kinds of activities being offered which are suitable for all kinds of lifestyles.

If the customers enjoy eating fine food, the kinds of cruises offered by Air Maritime are ideal. If you get up early enough, go to bed late enough and catch the elevators on your ship just right – you can eat up to 13 times a day on board of the cruise ship. Fine cuisine and five star dining has always been a part of the cruise experience.

Social Class

Rainer Geissler, a German sociologist, has examined his country's social structure in light of the economic changes that have taken place in the postwar era. Because of the growth of the services sector and the doubling of state employees since 1950, he has discarded earlier divisions of German society into an elite, middle and worker class, with a small services class consisting of employees of all levels. He has replaced this division with a more modern model that better reflects these postwar changes.
According to Geissler at the end of the 1980s West Germany's largest group (28% of the population) was an educated salaried middle class, employed either in the services sector or in the manufacturing sector as educated, white-collar employees. Some members of this group earned very high salaries; others earned skilled blue-collar wages. This professional class has expanded at the expense of the old middle class, which amounted to only 7% of the population at the end of the 1980s. A less educated segment of the services sector, or white-collar employee sector, amounted to 9% of the population. Geissler divided the working class into three groups: 1. Elite of the best-trained and best-paid workers; 2. Skilled workers, about 5% of who are foreigners; 3. Unskilled workers, about 25% of who are foreigners.
A portion of this last group lives below the poverty line. Farmers and their families make up 6% of the population. At the top of his model of the social structure, Geissler posits elite of less than 1%.
Even though 25 years have passed, the social stratification has remained unchanged. Nowadays whether one is travelling with children, seeking romance in the Caribbean, a cultural cruise in the Mediterranean or checking out Europe’s coolest cities, the customer will find a cruise to suit his/her budget. With the wide selection of cruises available in this brochure, one can be sure that there is a cruise for just about everyone. Air Maritime cruises can be luxurious but still affordable. The prices offered are very competitive compared to other prices offered by different German tour operators. The package price is built up in a way to provide the customer with a good value for money spent.

CONCLUSION

How does this brochure influence the consumer’s purchasing decision process:

Need Recognition

There are different factors, which influence motivation of consumers. In our opinion, taking into consideration the fact that we live a hectic life, people need to relax and disentangle themselves from everyday lives. Germans prefer to travel while taking time off their daily routines.

Information Search
Cruise holidays offer an ideal way to escape from reality. Information about Air Maritime can be obtained by visiting:

• Travel agents all over Germany • Air Maritime official website – on line brochure • Annual tourism fair in Germany - ITB (International Travel Berlin)

Evaluation of Alternatives
The customer needs to evaluate the different alternatives available in relation to prices and quality. When you compare the package being offered by Air Maritime to the ones being offered by its competitors, you will come to the conclusion that this product is one of the best on the market.

Purchasing Decision
Once the relevant options are taken into consideration, a choice must be made. Integrating information from sources such as prior experience with product or a similar one, information present at the time of purchase, and beliefs about the brands that have been created by advertising can influence the choice. The company’s brand name, i.e. FTI / Air Maritime is very well known in Germany and is placed 5th in its category. This can influence the customer’s final purchasing decision. The actual purchase of the product can be made by visiting one of the various travel agents or directly one line through the company’s website.

Post Purchase Behaviour
It is common for customers to experience concerns after making a purchasing decision. This arises from a concept that is known as “cognitive dissonance”. The customer, having bought a product, may feel that an alternative would have been preferable. In these circumstances that customer will not repurchase immediately, but is likely to switch brands next time. To manage the post-purchase stage, it is the job of the marketing team of Air Maritime to persuade the potential customer that the product will satisfy his or her needs. Then after having made a purchase, the customer should be encouraged that he or she has made the right decision.

APPENDICES

Appendix 1 Brochure Air Maritime

Graph 1 Comparison of age groups over the years

Graph 2 Motivational reasons for spare time mobility

Table 1 Comparison of statistics 2003 and 2004 for Ocean-going cruises table 2 Comparison of statistics 2003 and 2004 for River cruises