Factors Influencing Consumer Behaviour and Impact of Digital Technology

This report explores the factors influencing consumer behaviour, including cultural, psychological, social, and personal factors. It also discusses the impact of digital technology on consumer trends. The report further delves into the consumer decision-making process and highlights the importance for marketers to understand consumer buying behaviour. Additionally, it compares B2B and B2C decision-making and explores different approaches of market research.

UNIT 20

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
LO1..................................................................................................................................................3
P1 Cultural, psychological, social and personal factors influencing consumer behaviour.........3
P2 Impact of digital technology on consumer trends..................................................................5
LO2..................................................................................................................................................6
P3 Consumer decision making process.......................................................................................6
P4 Importance for marketers to understand consumer buying behaviour...................................7
LO3..................................................................................................................................................8
P5 Comparison of B2B and B2C in decision-making.................................................................8
P6 Approaches of market research..............................................................................................9
LO4................................................................................................................................................11
P7 Ways in which marketers can influence various decision-making stages............................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Consumer behavior is predominately the series of actions and activities which
organizations undertake in order to understand the behaviour, needs, wants and psychology of
customers. The main aim of this report is to understand the consumer behaviour and study the
various tactics through which TUI influences the decision making of consumers.
TUI is basically the multinational travel as well as tourism organization being established
in 1923 by Dieter Zetsche and headquartered in Germany.
This report gives a brief overview of cultural, psychological, social and personal factors
influencing consumer behaviour, impact of digital technology on consumer trends, consumer
decision making process, importance for marketers to understand consumer buying behaviour,
comparison of B2B and B2C in decision-making, approaches of market research and ways in
which marketers can influence various decision-making stages.
MAIN BODY
LO1
P1 Cultural, psychological, social and personal factors influencing consumer behaviour
Consumer behaviour is basically the well-through study of groups and individuals along
with their activities which is associated with purchase and usage of the products and services.
There are various factors which actually influences the behaviour of consumers as well as
attitudes.
Cultural factors
It consists of set of the values of particular group of community.
Status
This is one of the important cultural factor which influences buying decisions of
consumers. For example- people from the upper class generally have the tendency to spend their

money on travelling to different places. Thus, due to this they have the habit of spending money
in travelling to the world. While on the other hand, middle and lower class people due to lack of
money do not spend much in travelling instead try to fulfill their basic needs (Smith, 2019).
Social factors
Social factors play a great role in influencing the overall buying behaviour as well as
attitudes of the consumers. These consists of
Reference groups
These are basically people around which mainly influences the attitudes and behaviour of
customers. For example- when any friend or relative of the particular individual refer any
destination or embrace the destination and its environment where that relative have been then
that individual tend to picture that destination as attractive in their mid and thus this forces them
to travel.
Personal factors
These are some of the variables of the individual which directly influences as well as
impact the attitudes of consumers.
Lifestyle
This greatly influences the attitudes and travel decisions of the consumers. Lifestyle of
each and every individual is different. People leading the luxurious life tend to spend more
money on travelling and exploring the different places. Thus, their luxurious life and excitement
goes into their behavior for travelling (Helmefalk, 2019).
Psychological factors
There are various psychological factors which go into the decision of consumers for
travelling to different places.

Learning
A large number of people have the motivating factor of learning which leads into their
decision to travel. Generally the youngsters tend to travel to learn about the different culture,
historic places etc which motives them to explore different places.
P2 Impact of digital technology on consumer trends
Since the advent of digital technology, there has been a rapid change within buying
behaviour and attitudes of the consumers. This digital technology has largely transformed the
whole world with its great innovation and thus has influenced people to a large extent. As
technology is growing at a rapid pace and is expected to reach the paramount in near future,
consumer trends are also changing in the flow of this pace. These consumer trends are constantly
changing with the growth of digital technology (Pappas, 2017). One of the biggest change in the
attitude and behavior of consumers is the use of mobile technology. Nowadays, cell phone has
actually become the tour guide of people which helps them to locate the different places for
vacations or for other activities. Initially, consumers used to consult a large number of people
like trip advisors, family, friends for choosing the best location and they had to depend on them
for providing the right advice. But with the rise of digital technology, people now use their
Smartphone for gathering all the information. In fact, now people have become more dependent
on the Smartphone to personalize their vacations and experience by booking the tickets online,
check-ins through the apps etc. Thus, these Smartphone has bought a great change in the travel
experience of people.
Another change in trend which came due to the growth of digital technology is the virtual
assistant. Nowadays, people travelling to different location like to stay in the hotels which is
highly technology updated and thus provides them a great experience. For example- people want
a high tech facility in their hotel rooms which provides them all the information about the outside
environment.
M1
There are various cultural, psychological, personal and social factor which greatly
influences the decision making and attitudes of customers. For example- people leading
luxurious lifestyle tend to spend much on travelling to different places and exploring activities

which is totally different in middle and low class people. Thus these factors somehow affect the
motivation and behaviour of customers (Sugathan and Ranjan, 2019).
LO2
P3 Consumer decision making process
Consumer buying process is basically the steps which a consumer goes through in
making the purchase decisions. This process mainly consist of four steps namely
Problem recognition
This is the first stage in which an internal or external stimulus is triggered. In this stage,
consumers come across the problem which needs to be fulfilled and which forces them to buy a
service or product. For example- consumer travelling to a particular destination come across the
problem of choosing the best travel agency. In this stage, TUI can identify this problem of
customers by searching for the customers and contacting them.
Information search
This is the second stage of consumer buying process where after identifying the problem,
consumers gather all the information related to the product which will help to solve their
problem. For example- once the consumers have identified problem of booking hotel, they will
now collect all the information about various travel agencies like names of the agencies, reviews
etc. In this stage, TUI can lead by optimizing their search engine so that they appear on top of the
page when people search for best travel agencies (Tussyadiah and et.al.,2018).
Evaluating alternatives
In this stage, after gathering all the information about product customers evaluate the
various alternatives and thus compare the various options to make relevant decisions. For
example- after collecting information about the various hotels, customers will compare various
agencies in terms of the price, facilities service etc. In this stage, TUI can customize its website
where people looking for the information find it on their page. Lime TUI can share its success

stories, separate page of happy customers so that when customers compare the various
companies, it becomes easy for them.
Purchase
This is the last stage of the consumer buying process in which after evaluating all the
alternatives, consumers finally make the purchase decision whether they have to go with product
or not. For example- customer will finally choose the best travel company which is suitable for
them in terms of piece and which have the best reviews. In this stage, TUI can communicate with
the customers in order to persuade them as why their company is most trustable and good
(Dorcic, Komsic and Markovic, 2019.
P4 Importance for marketers to understand consumer buying behaviour
Consumer decision making process is one of the vital as well as important aspect within
tourism industry. This is the process which actually tells the marketer about the attitude and
beliefs of people and makes them aware about their spending patterns. The various stage of this
process basically helps the marketers to know what the lifestyle of consumers is and what their
purchasing behaviour is. It is highly important for marketers to understand the experience of
customers. Customer map is basically the visual representation of various experiences which
customers have with the marketers. It is highly essential for TUI to understand this mapping as it
helps them to step into the shoes of their customers and view their business for the customer’s
point of view. The first and most important reason that TUI needs to analyze this decision
making process of customers is that through this, they come to know about the four views of
customers while decision making which are economic, passive, cognitive and emotional.
Understanding these four views is extremely essential as this will help TUI to know about the
various variables like spending pattern, attitudes, beliefs etc (Hall and Williams, 2019). Apart
from this, the second reason is that by mapping the consumer decision-making process,
marketers basically come to know that what the preferences of customers are. For example- this
process tells that some of the customers want high end hotels and expensive travel experience
and are ready to spend high amount of money. Thus by mapping their purchasing path of
consumers, TUI will be able to satisfy the needs and wants of the customers according to their
preferences.

M2
Marketers of TUI are generally responding to the decision-making process of customers
by understanding each and every stage of this process. Marketers of TUI first identify the
problem of customers and then help in suggesting the most appropriate product and service like
hotel which will eventually solve their problems.
LO3
P5 Comparison of B2B and B2C in decision-making
The decision making process differs in both B2B as well as B2C and both goes through
different stages of decision making.
B2B B2C
Low spend and low importance
This is the stage in which offering is
generally of low importance to customers and price
is also low. This decision is generally made by the
single employee. For example- stationary, office
equipments of TUI comes under this stage.
Problem recognition
In this stage, customers come across the
problem which needs to be fulfilled and thus realize
that something is missing which needs to be
addressed. For example- deciding Travel Company
for vacations.
Low spend and high strategic importance
In this, product is of high importance but is
not generally expensive. For example- insurance &
safety certification given by TUI to its employees.
The decision of TUI in this includes providing
security of its employees and other business
customers (Sigala, 2018).
Information gathering
In this stage, after identifying problem
customers look for the products which will fulfill
their wants and will solve their problems. For
example- gathering information about different
travel agencies (Scuttari and Pechlaner, 2017).
High spend and low importance
The decision includes those products which
are not are of that importance but are expensive.
Decisions include the products which are not much
important for business operations. For example-
various utilities in TUI like electricity, water supply
etc.
Evaluation of alternatives
After gathering information, customers
then compare the various alternative and finds the
best one which will help to accomplish their goals
and fulfill their needs. For example- comparing
various travel agencies in terms of price, services
etc.

High spend and high importance
Products in this stage include expensive
ones and which are of high importance. For
example- plant and office of TUI. In this, decision
is being made by the employees of TUI that on
which location to spend for expanding their
business.
Purchase
This is the last stage in which customer
finally makes the purchase decision that whether to
buy or not after exploring various alternatives. For
example- choosing the travel agency on the basis of
information gathering and evaluation of
alternatives (Magno and Cassia, 2018).
P6 Approaches of market research
Market research
Market research is basically the process as well as organized effort for gathering the
information about the target market as well as customers. In short, market research is conducting
the thorough study of market and the competitors. There are generally two types of the market
research namely
Primary research
This is the method in which researcher collects forts hand information about any product
or service. In general sense, primary research s all about collecting the fresh and new information
Secondary research
This is the market research method in which marketers collect already available
information which has been collected by someone else in the past.
Methods
Tele-depth interviews
This is one of the most important method of market research in which organization make
use of telephones to undergo an interview of customers to know about their preferences, likes,
dislikes etc. For example- TUI can conduct the telephonic interviews of their customers to know
about their responses like whether they are aware about their company, how often they travel etc.
The main advantage of this method is that it helps the company to collect demographic

information and thud provides a great umbrella of information (Buzulukova and et.al.,2018).
Major disadvantage of this method is that no each and every customer is interested in providing
response neither they have much time to tale to the company employees thus information
remains limited.
Questionnaire
This is the another most important approach as well as primary research method which
mainly consist of series of questions for the major objective of gathering he information from
customers. The best sample size in this method is around 500 in 10% of population. For
example- TUI can design a questionnaire containing various questions like educational
qualification, places they had traveled in past few months etc. This will help the company to
gather precise and u[dated information about customers. Major advantage of this method is that
it is inexpensive and thus helps to collect qualitative data in an affordable manner. Major
disadvantage is that sometimes customers give dishonest answers and does not provide 100%
right answers.
Pareto principle
This is the another method of market research through which organizations basically
conducts the research on consumers. This principle states that around 80% of effects come from
the 20% of causes. This principle basically helps TUI to know that how much percentage of the
sales are being influences by how much percentage of customers. The main advantage of this
method is that it helps the organizations to focus on the major resources as well as efforts for
achieving greatest efficiency. Disadvantage is that it only shows the qualitative data and not the
quantitative data (Dale, 2019).
M3
There are various factors as well as methods through which organizations are able to
influence the decision-making of customers. For example- through questionnaire, telephonic
interview, TUI come to know about the preferences and needs of customers by interviewing
them. This at last helps them to tailor their products and services according to their wants and
help to influence their decisions.

LO4
P7 Ways in which marketers can influence various decision-making stages
There are generally various ways in which TUI can influence the decision making
process of consumers.
Role of opinion leaders
Opinion leaders are basically the people who influence choices of their followers towards
or against the specific brand. In short, opinion leaders are the influences which greatly influence
decision and attitudes of the followers. Marketers of TUI can greatly affect the decision making
of consumers by using various opinion leaders. For example- TUI can seek the support of some
celebrity or make any famous star as the part of their advertising strategy. As these celebrities are
highly followed by the people thus when these opinion leaders will market the brand message of
TUI to people then this will leave a positive impression within their minds and will also impact
their buying behaviour (So and et.al.,2016).
Market research
This is the another most important yet essential method which marketers of TUI can use
in order to influence the decisions and attitudes of customers. By conducting a thorough
research, marketers will come to know about the various needs and wants of customers and this
will help to deliver the marketing message which will appeal to them. Through market research,
TUI can also come to know about the various psychological and cultural factors of customers
which will eventually help them to meet their requirements and influence their overall decision
making.
M4
Marketers of TUI uses various tactics for influencing each and every stage of the buying
process of customers. For example- through the use of opinion leaders like famous celebrities,
company tries to leave a great impression of themselves within the minds of customers. Besides
this, through proper market research marketers endeavors to influence the behaviour of
customers by taking fulfilling their needs and wants.

CONCLUSION
It has been summarized that there are various cultural, social and psychological factors
which goes into the decision of customers to travel to different locations. With the advent of
digital technology, consumer trends are rapidly changing and now consumers have become
highly technology and innovation oriented. Besides this, there are various stages of the consumer
decision making process which is highly important for marketers to understand and mapping
each stage is necessary to meet the needs and influence their behaviour. Apart from this, there
are various approaches as well as methods in B2B and B2C through which organizations are able
to influence the decisions of customers like questionnaire etc. Along with this, there are various
ways through which marketers can influence the buying behavior of customers like opinion
leaders, market research etc.

REFERENCES
Books & Journals
Buzulukova, E and et.al.,2018, July. The Influence of Online Travel Communities on Tourism
Destinations Choice. In Global Fashion Management Conference.
Dale, N.F., 2019. Gender and other factors that influence tourism preferences. In Gender
Economics: Breakthroughs in Research and Practice (pp. 454-471). IGI global.
Dorcic, J., Komsic, J. and Markovic, S., 2019. Mobile technologies and applications towards
smart tourism–state of the art. Tourism Review.
Hall, C.M. and Williams, A.M., 2019. Tourism and innovation. Routledge.
Helmefalk, M., 2019. Browsing behaviour as a mediator: the impact of multi-sensory cues on
purchasing. Journal of Consumer Marketing.
Magno, F. and Cassia, F., 2018. The impact of social media influencers in
tourism. Anatolia.29(2).pp.288-290.
Pappas, N., 2017. Effect of marketing activities, benefits, risks, confusion due to over-choice,
price, quality and consumer trust on online tourism purchasing. Journal of Marketing
Communications.23(2). pp.195-218.
Scuttari, A. and Pechlaner, H., 2017. Emotions in tourism: from consumer behavior to
destination management. In Design science in tourism (pp. 41-53). Springer, Cham.
Sigala, M., 2018. New technologies in tourism: From multi-disciplinary to anti-disciplinary
advances and trajectories. Tourism management perspectives.25. pp.151-155.
Smith, A., 2019. Consumer Behaviour and Analytics: Data Driven Decision Making. Routledge.
So, K.K.F and et.al.,2016. The role of customer engagement in building consumer loyalty to
tourism brands. Journal of Travel Research.55(1). pp.64-78.
Sugathan, P. and Ranjan, K.R., 2019. Co-creating the tourism experience. Journal of Business
Research.100. pp.207-217.
Tussyadiah, I.P and et.al.,2018. Virtual reality, presence, and attitude change: Empirical
evidence from tourism. Tourism Management.66. pp.140-154.