Unit: Understanding Consumer Behaviour Assignment title: The Glendale Hotel June 1 Marking Scheme Markers are advised that, unless a task specifies that an answer be provided in a particular form, then an answer that is correct (factually or in practical terms) must be given the available marks. If there is doubt as to the correctness of an answer, the relevant NCC Education materials should be the first authority. This marking scheme has been prepared as a guide only to markers and there will frequently be many alternative responses which will provide a valid answer. Each candidate s script must be fully annotated with the marker s comments (where applicable) and the marks allocated for each part of the tasks. Throughout the marking, please credit any valid alternative point. Where markers award half marks in any part of a task, they should ensure that the total mark recorded for the task is rounded up to a whole mark. Marker's comments: Moderator's comments: Mark: Moderated mark: Final mark: Penalties applied for academic malpractice:
Task Guide Maximum Marks 1 It is imperative that any business understands the basics about their customers. We often refer to this as: What When Why How Where 1 mark for identifying each element, total of marks. If we can research and understand these five important pieces of information then we can, in effect, develop and initiate an effective marketing strategy. Up to marks for identifying how these affect marketing strategy We measure and monitor the marketing strategy to see if customers are behaving in the way we anticipated from our research and therefore responding to the applied marketing strategy. Up to marks for identifying the new marketing strategy being measured and monitored If this is not occurring then our action is to change and amend our marketing strategy as a result of additional research to ascertain how our customers are behaving. Up to marks for determining the resultant action of amending the Marketing Strategy 2 a) This task requires a discussion on the buying process of potential and existing customers following the change in ownership at the hotel. As potential and old customers progress through the decisionmaking process (DMP) so they face questions. If they have visited the hotel before will it be the same under the new owners? In alternative searches they might find negative reactions to the hotel s new owners or that it is not as good as it used to be. This will also affect potential new customers as well. This new buy situation might also affect the decision-making unit (DMU), making the purchase decision more difficult and potentially taking customers to competitors. Page 2 of 8 Understanding Consumer Behaviour NCC Education Limited 1
Candidates should also consider the diffusion-adoption process and apply and refer to Everett Rogers Theory of Diffusion and Adoption (published 196 1998) b) The second part of this task asks candidates to consider any theories of buying a new product/service that it might be appropriate to advise Jim and Fearne about. As the Glendale Hotel provides a service to its customers, consideration needs to be given to its intangibility. Candidates might consider the need to utilise the marketing communications/promotion mix to encourage guests to visit and book into the hotel. For example, use of pictures, via advertising and factorials often creates a tangible entity of the service and encourages guests and clients to visit the hotel. Creating service re-buy is also important to a business such as the Glendale Hotel. Returning clients/customers are important to their success and development as a business and are cost effective in terms of coming back to purchase services from the hotel again. Customer re-buy might be stimulated and encouraged by the development of a customer loyalty programme to encourage customers to rebook the hotel s services, be they meals, accommodation or conference bookings. Candidates research might also lead to quoting Reichheld (1996) that the longer a customer stays and returns to re-purchase the less price-sensitive a customer usually becomes. Candidates who read around this subject area might quote Keaveney (199). Keaveney s research from 800 service providers led to the development of eight categories of customer/client defection from a service: Core service failure customers leave and do not return due to defects in the service provision Service encounter failures customers defect due to poorly trained staff or rude and unresponsive staff Employee response to service failure the business owner failed to improve service levels or respond to clients/customers following service failures Pricing the service owner increased prices which do not equate to the level of service offered Inconvenience customers defect as the services provided meet the business owners requirements and not those of the client/customer Attracted by a competitor customers find a competitor s offer better Ethical issues customers defect as they find the business s Page of 8 Understanding Consumer Behaviour NCC Education Limited 1
ethics do not equate to theirs Involuntary switching when the customer cannot re-buy the service as, for example, they move abroad. Candidates might also consider the development in clients/customers from the perception of the new Glendale Hotel business and the progression to the formulation of an attitude towards the Glendale Hotel. This progression might be assisted or detracted by communications with friends/colleagues who have visited the hotel under its new owners who share their service experience or by actually visiting the hotel themselves and personally progressing their perception of the Glendale Hotel and how it is now run under the new owners. This perception might be affected by whether they used the hotel previously under the old owners or if they are new buyers. Candidates might also develop the area of opinion formers and opinion leaders. 21 marks available here. Candidates should receive up to marks. Organisational buyers are very different from consumer buyers. Whilst consumer buyers are very often emotive and emotion-driven, organisational buyers are the absolute reverse. The decision-making unit (DMU) is much more complicated and involved with more decision-makers in the business involved in the final buy decision (up to marks) Candidates might refer to Webster and Wind s (1972) model (up to marks) The complexities of the new buy against the ease of the straight re-buy and the added complexities of the modified re-buy (up to marks) Buying decisions are made when it is necessary to purchase, not simply because, for example, something is cheap (up to marks) Demand drives the requirement to purchase (up to marks) Organisations demand excellent service and strong relationships (up to marks) Maximum of marks. Page 4 of 8 Understanding Consumer Behaviour NCC Education Limited 1
4 As Jim and Fearne s advisor you might well advise: 10 Customer retention and customer loyalty are an essential element of the hotel business and today are relied upon to a much greater state. Returning customers are good for the business and also encourage other customers that the hotel is a good place to stay. Returning customers save a business money as you not have to directly sell or market to them. Returning customers build loyalty and loyalty improves and builds both the business and the brand of the business. You may also invite them to consider the following actions: Welcome the complaints you receive. Instigate loyalty programmes. Send out questionnaires and surveys to existing customers. Check for repeat sales often to instill your company s brand. Have you scheduled a frequent communications plan to your customer base? Do regular reviews. 2 marks for each point identified and placed in the context of the hotel to a total of 10 marks. 10 You can build loyalty in many ways as the advisor you might ask Jim and Fearne to consider some of the following: Keeping touch with customers using email marketing, thank you cards and more. Treating your team well so they treat your customers well. Showing that you care and remembering what they like and do not like. Build loyalty by rewarding them for choosing you over your competitors. Build loyalty by really caring about them more and making them happy to buy from you. 2 marks for each point identified and placed in the context of the hotel to a total of 10 marks. Page of 8 Understanding Consumer Behaviour NCC Education Limited 1
Candidates need to consider the use of market research in the context of the Glendale Hotel rather than just describe what it does. Candidates should outline what types of research might be necessary and how they would collect the necessary data required (up to marks) Discussion of how they might analyse the data and the available intelligence it might bring forth and the actions resulting from the active use of the intelligence (up to marks) Predominantly qualitative research will be required so that we can capture the respondent s feelings and opinions, etc. (up to marks) Candidates might also address the need to purchase and buy in available data and to analyse and assess the obtainable intelligence gained from it (up to marks) Page 6 of 8 Understanding Consumer Behaviour NCC Education Limited 1
Learning Outcomes matrix Task Learning Outcomes assessed 1 1, 6 Yes 2 2, Yes Yes 4 4, Yes 7 Yes Marker can differentiate between varying levels of achievement Page 7 of 8 Understanding Consumer Behaviour NCC Education Limited 1
Grade descriptors Learning Outcome Examine the importance of understanding consumer behaviour Examine the many influences that affect an individual s buying behaviour Analyse the theories of newproduct buying Analyse the theories of customer loyalty and retention Assess organisational buying behaviour Evaluate the response of consumers to marketing in the different stages of purchasing Evaluate the methods used to research consumer behaviour Pass Merit Distinction Provide an subject with some suitable examples and references Provide subject with some suitable examples and references Demonstrate adequate ability to analyse theories Demonstrate adequate ability to analyse theories Demonstrate an adequate awareness of issues associated with the subject and make some appropriate judgements Provide a reasonable assessment of the subject; Ideas are generally coherent Provide a reasonable assessment of the subject; Ideas are generally coherent Provide detailed subject with adequate use of appropriate references and examples Provide detailed subject with adequate use of appropriate references and examples Demonstrate ability to provide detailed and coherent analysis of theories Demonstrate ability to provide detailed and coherent analysis of theories Demonstrate a sound awareness of issues associated with the subject and make consistently appropriate judgements Provide a generally strong assessment with some wellreasoned assumptions; Ideas are consistently coherent Provide a generally strong assessment with some wellreasoned assumptions; Ideas are consistently coherent Provide consistently critical and detailed subject with innovative use of highly appropriate references Provide consistently critical and detailed subject with innovative use of highly appropriate references Demonstrate ability to provide comprehensive, lucid analysis of theories Demonstrate ability to provide comprehensive, lucid analysis of theories Demonstrate a detailed awareness of the complexity of issues associated with the subject and make highly appropriate judgements Provide a consistently strong assessment with well-reasoned and original assumptions; All ideas are highly coherent Provide a consistently strong assessment with well-reasoned and original assumptions; All ideas are highly coherent Page 8 of 8 Understanding Consumer Behaviour NCC Education Limited 1