Marketing report help : Consumer behavior

1.      EXECUTIVE SUMMARY

Consumer behaviour in tourism industry has been significantly changed by globalization, the economy’s digitization and the hyper-competition. It has become a multidimensional concept, viewed as a specific result of a dynamic system of relations between processes of perception, information, attitude and motivation.

In this context, researching certain dimensions that are at the core of consumer behaviour, and consequently, determine the purchasing and consumption pattern, it is essential to know your customers, in order to tailor and cater to their needs and wants, in a way that translates into repeat business.

This paper focuses on Australian Capital Tourism and proposes a study based on scientific and statistical models to come up with strategies and business development plan to increase the tourism in Canberra, the capital city of Australia. It uses the background of consumer motivation in the marketing paradigm to create a basis for understanding tourist needs and proposes a model to address those needs.

2.      INTRODUCTION

Tourism is a dynamic international industry that attracts customers from all walks of life to locations all around the globe. It is also an industry that has the potential to provide a large source of revenue for many groups of stakeholders, including governments and for-profit organizations Tourism is a vital industry for Australia generating $94 billion in spending. As a sector, tourism contributes $34 billion in GDP– that’s 2.6% of Australia’s total GDP. Tourism is Australia’s largest services export earner and provides around half a million jobs. As per the 2020 Tourism Industry report it is expected that over the next decade the number of international visitors to Australia will increase. China is emerging as a strong contributor to the increase in international tourists to Australian shores. Considering the importance of tourism in the economy there is strong need to focus on the consumer needs in the competitive world. As the domestic tourism is projected to be shrinking it is imperative to understand the mindset of international travellers and device strategies around it. Canberra, the capital city of Australia is a destination that attracts both international and national visitors and tourism is a major contributor to the economy of this zone as well. Australian Capital Tourism (AUSTRALIAN CAPITAL TOURISM) intends to increase the awareness about the region and increase the number of visitors to this area. Canberra is an oft overlook beauty in midst of Australia’s midland hills where the country’s rich culture and history are on display in many museums, galleries and memorials such as Australian War Memorial, Questacon, Australian Parliament House etc. The lush green environment of the region gives the city vitality and a colourful flair. The natural beauty of the place can be seen in places like Australian National Botanical Gardens, Lake Burley Griffin, and Stromlo Forest park etc.

3.      BACKGROUND AND MANAGEMENT PROBLEM

The paper aims to investigate the reasons why tourists choose a particular destination for visiting and how the motivational factors influencing this decision making process and be measured. Also the paper aims to propose a methodology to analyze these motivational factors which can then be used by Australian Capital Tourism (AUSTRALIAN CAPITAL TOURISM) to devise promotional strategies around the areas which are found to be relatively weaker and further refine the offerings in the areas which are found to be stronger. The study will also give a better understanding of the reasons why international tourists choose Canberra and answer the following questions

• What is the tourists’ motivation for visiting Canberra?
• What are the most popular activities in and around Canberra?
• Which activities should be promoted?

The use of factor-cluster segmentation technique has been briefly discussed in the paper to provide further insights for the purpose of tourism development and how this technique can be leveraged to make recommendations once the data using various surveys has been completed. The paper also talks about usage of statistical analysis to extrapolate qualitative elements that do not have standard measures such as behaviour and opinions. However the mathematical and statistical details of this approach are not included in this paper as they require some primary data collection before these techniques can be meaningfully applied.

4.      RESEARCH PROBLEM AND KEY OBJECTIVES

Australian Capital Tourism is looking to increase international tourism in city of Canberra (Australian Capital Territory). To address this scenario, it is important to understand the needs of the tourists and what factors influence these needs.

4.1            KEY OBJECTIVES

The following are the key objectives for this research paper

• The basic reasons for decision making process of tourists (why they choose a particular destination)
• Assessing the subsequent satisfaction of tourists’ expectations it is important to understand the underlying motivations for these (Snepenger, King, Marshall, and Uysal, 2006).
• Suggesting a mathematical/statistical model to analyze the data collected using qualitative and quantitative research

5.      RESEARCH DESIGN

To develop understanding of the problem statement, it is important to understand the concept of motivation in marketing context, especially in the tourism paradigm.

5.1              MOTIVATION

Motivation can be defined as an inspiration to satisfy the innate and acquired needs, wants and goals of humans. These inner needs and the associated level of tension to fulfil these needs lead to actions.

Needs also change in response to individuals’ physical condition, environment, interaction with people and experiences. As needs become satisfied, new, higher order needs emerge that must be fulfilled. This view has been supported in the work of Abraham Maslow(1943).

As illustrated by the definitions and citations above, people do everything for a reason or need although the reason at times may not be explicitly stated or expressed. In the context of tourism, the choice of a destination depends on how the place satisfies the needs and wants of the tourist and hence the underlying reason. (Pearce, Morrison and Rutledge, 1998) defined tourist motivation “as the global integrating network of biological and cultural forces which gives value and direction to travel choices, behaviour and experience”. Why some tourists choose India as a tourist destination whilst some others chose Europe is for certain reasons and these reasons are derivative of their motivations.

People who travel can be classified into three major categories: pleasure, business or both. Besides this, six main factors influence or motivate people to travel to a particular destination. These are physical, intimate, cultural, personal, knowledge and social. This view is supported by John and Susan (1999). People who travel based on any of the above factors do that just to satisfy their needs. Hence influencing any of these factors has a major bearing on the outcome of choosing a destination for the tourists.

Canberra as a tourist destination has various facets that can simulate all of the above factors. Places such as Australian War Memorial, the Australian Parliament, and the Museum of Australian Democracy can stimulate cultural and knowledge factors for some tourists. Places like the National Botanical Gardens, the Stromlo Forest Park can provide a person a serene and relaxed environment which can be physically simulating for a visitor.People travel for all of the factors mentioned above just to satisfy their different needs, which in turn influences their choices of destination. Hence, motivations are the factors that affect people’s choices of destinations in different ways.

Motivation is an internal drive that prompts human beings to take action in order to obtain their goals. Needs and goals are interdependent and the goals will change after having been satisfied through actions as Maslow’s hierarchy of needs mentioned above. For example, people living in cold climates like Russia and Canada may want to visit warmer shores of South Africa or India to experience and enjoy different weather conditions, whereas people living in hot tropical countries like India or Middle East may want to travel to colder places like Europe or US to enjoy the snow. Thus, tourists may seek to satisfy not only one need but different needs simultaneously. To understand the tourists’ motivation various research and studies have been conducted but Leisure Motivation Scale of the Leisure Motivation Scale of Beard and Ragheb (Beard and Ragheb 1980; 1983) is considered the benchmark for the industry and has been validated at various points by different authors such as Ryan and Glendon (1998).The Motivational Scale argues that there are four motivational factors that determine the satisfaction level attained from the leisure pursuits. These four factors comprised of 14 distinct items are intellectual, social, competence and stimulus avoidance. The intellectual factor motivates the individuals to pursue activities that will lead to increase in their knowledge. People normally engage in mentally simulating tasks such as learning, exploring or discovering when they are motivated by the intellect factor. The social factor for motivation includes two basic needs for friendship and interpersonal relationships. The social motive stimulates the people to engage in activities that satisfy their ego, status and power, or uniqueness and these people usually want to separate themselves from others and possess their own needs, goals, and desires (Maslow, 1943).

The third motive, the competence motive simulates people to challenge, master and achieve. Such people normally engage in sports or adventure activities (the so called adrenalin rush activities) where they can achieve new highs. Finally the fourth motive is the need for some individuals to seek solitude and peace and away from the social connects. This motivation leads people to seek time away from their daily needs and allow themselves to rest.

Apart from the above, there is another important theory about motivation which is helpful in this context. The theory of “Push and Pull” motivations is highly applicable in the tourism paradigm. Generally the tourists’ motivation is explained through a factor or force that makes people travel. These forces can be classified in two distinct ways, the push factor and the pull factor. The push factor is the internal force from within that pushes a person into decision making for travelling. The pull factor is the external force which attracts a person to travel to a particular destination. The push motivation can be explained by desire to rest and relax, seek adventure, form new relationships or get together with friends & Family. However the pull motivation is external and is determined by destination’s attraction, for instance, beaches, national museums, or traditional culture. The pull motivation is the factor that AUSTRALIAN CAPITAL TOURISM or similar organization explore to understand the basis of tourists’ motivations that can help them to formulate strategies and business development plans to increase the inflow of tourists and in turn increase the tourism revenue for a place.

5.2              ACTIVITIES

Activity generally is defined as “the state or quality of being active”; “lively action or movement”; or “a specified pursuit in which a person partakes” according to TheFreeDictionary website (2010). The activities that tourist engage in are leisure activities (if we exclude the business travellers). Unlike the daily routine activities, these activities are not forced upon on individuals and are non-work pursuits which tourists willing engage into. Hence it is important to understand the activities offered at a tourist destination and correlation between these activities and motivational factors to establish the understanding of tourists’ decision making process.

5.3              CORRELATION BETWEEN MOTIVATION AND ACTIVITIES

Activities are seen as the critical link between tourist motivations and destination choice (Moscardo, Morrison, Pearce, Lang and O’Leary, 1995). Tourists who have heard that a certain place away from their current location has similar types of activities that they like may be stimulated to discover the place to enjoy the activities, and to see difference between those activities with the similar ones they have known or experienced before.

By understanding these, Australian Capital Tourism can determine how to apply the knowledge to understand what aspects of Canberra motivate tourists to come there and in turn how to develop it more to attract more tourists. Also this would provide a scientific basis about the needs and wants of the tourists in order to satisfy those needs. This will help ACT plan not only what tourists’ needs during their stay (the primary needs) but also the next stages of their needs and hence it can plan to exceed those expectations. This is better than just offering services and products without any order of priority. Secondly, the tourist motivations theories will help identify what kinds of tourists are in which stages of the needs theories so that focus can be on how to satisfy the needs as they develop and evolve.

5.4              TYPE OF RESEARCH

It is intended to use both quantitative and qualitative analysis to draw conclusions for this research. This study proposes to use the Segmentation approach to derive meaningful conclusions and results for Australian Capital Tourism. Tourism research normally uses the segmentation approach to classify tourists into various distinct groups. According to Schiffman and Kanuk (2004), “market segmentation can be defined as the process of dividing a market into distinct subsets of consumers with common needs or characteristics and selecting one or more segments to target with a distinct market mix” (Schiffman and Kanuk, 2004). In the context of tourism, tourists can be classified into relative groups that differ from each other in purchasing behaviour. This segmentation is based on various factors apart from motivation such as demographics, activities etc.

5.5              TYPE OF INFORMATION, DATA COLLECTION METHODOLOGY & SAMPLING TECHNIQUES

The study proposes to use survey of international visitors to Canberra as the means of data collection and further analysis using segmentation. A sample of 1000 international tourists is proposed by this study by using structured questionnaire (illustrated in Appendix 1) that measures tourists’ reason to visit Canberra, activities, demographics and intention to revisit the destination and recommend the journey to others. The collection of data will be through multiple channels which are expected to deliver accurate and timely results. The channels used will be the places frequented by international visitors like hotels in Canberra such as Hyatt Hotel, Novotel Canberra etc. These hotels are normally used by international travellers and about where about 20% of the questionnaires will be distributed in hotels. Secondly, the questionnaires will be distributed in famous restaurants & bars of Canberra where another 20% of the questionnaires will be handed over. To ensure timely response these questionnaires will be handed over during waiting time at these places to the customers. Apart from these, it is proposed that questionnaires are handed over at popular tourist destinations such as the Australian War Memorial, the National Zoo and Aquarium, Vietnam forces war memorial etc. The distribution of questionnaires at distinct places will ensure wide spread of target audience and hence better sampling of the data. Also a thorough thought will be given to the questions that are being asked in the survey. There will be no direct personal questions like name and address to ensure anonymity of the respondent and also any questions that can be considered religiously, sexually or culturally biased.

Measuring tourist motivation is not a straight forward task and hence requires a tested model to apply. Leisure satisfaction has been measured considering activity-specific characteristics and through a global approach of measuring general satisfaction with leisure choices.  A global approach allows for the use of a standardized instrument in understanding leisure satisfaction.  The most recognized and utilized instrument comprised of global factors was developed by Beard and Ragheb (1980) as illustrated in the above paragraphs. This paper recommends the adoption of the Beard and Ragheb’s motivational scale. The items adopted from Beard and Ragheb’s motivation scale adopted in the questionnaire are

Also activities offered in Canberra will be selected (sample in table below). These activities will also form the basis of the questionnaire.

Also the tourists satisfaction index will be measured on a 7-point scale where 1 is equal to I totally disagree and 7 equals I totally agree (7-point scale as opposed to a 5-point scale will ensure a better spread of responses).  The three questions measuring the satisfaction index are

1. I am totally satisfied with my trip to Canberra and have got all what I had planned
2. I will recommend my friends and relatives to visit Canberra
3. I will like to revisit Canberra in the near future

5.6              PLAN OF DATA ANALYSIS

To measure the success of surveying technique, the response rate will be measured. Response rate is the percentage of acceptable questionnaires returned to the total number of questionnaires delivered. It is imperative to have at least 80% response rate.

A thorough data analysis process is proposed to be used to draw statistical results from the primary data collected. A factor analysis of the motive variables will be calculated first. Then it is proposed that cluster analysis of the motivational factors is carried out to identify the various segments of the tourists. Finally it is proposed to use statistical analysis models like analysis of variance and multivariate analysis of variance, cross tab analysis etc to derive the significant differences between the various clusters/segments of the tourists.

6        CONCLUSION & RECOMMENDATIONS

This paper has attempted to investigate and provide an overview of tourists’ motivation and activities and using a segmentation approach. Segmentation in a tourism context, along with cluster analysis, is a methodological tool to classify the tourists into distinct groups in order to provide insight to AUSTRALIAN CAPITAL TOURISM to develop the strategy appropriately. The segmentation approach will lead to the finding out the demographic profile of the visitors, the country of origin and educational backgrounds of tourists. It also will help in understanding whether most tourists visit Canberra for Social motives, intellectual motives or for stimulus avoidance or competency. The actual motivation factor will determine the type of focus that Australian Capital Tourism needs for its future business strategy. For example if social motives turn out to be strongest motive for a large section of tourist population, Australian Capital Tourism can focus on developing e.g. develop tours with a diverse activities groups of individuals can participate, such as overnight camps for groups of two people to romantic destinations or music camps for groups, where tourists can participate in cultural activities with local people. Such activities will attract people interested in socializing as well as those who like to discover new places and cultures.

Also segmentation will help analyze the target audience for Australian Capital Tourism. If one cluster (cluster 1) shows significant level of satisfaction over another cluster (cluster 2), then cluster one can be the target audience for Australian Capital Tourism in the long run. The findings from such a study might give more effective solutions for the segments identified by such a study.

Overall, the paper recommends the usage of segmentation approach for data collected using the principles of consumer motivation to understand the needs and wants of tourists visiting Canberra and on basis of the final data collection make suitable recommendations for different clusters of tourists visiting the area.

INDIVIDUAL REFLECTIONS

The research done for this paper has enlightened me on how motivations play an important role in consumer decision making. The underlying principles of motivation can be applied not only to the tourism industry but can be generically applied to a wide spectrum of problems in hand. Also researching about Australian Capital Tourism and Canberra area has made me more cognizant about the local tourism industry in that part of the world and current scenario prevailing. Last but not the least the application of statistical analysis to the proposed data collected has enhanced my perspective on applied mathematics and statistics.

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