Motivation within Marketing Process - Essay Example

Motivation within Marketing Process By Introduction Consumer behaviour and motivation are two interrelated concepts because a consumer’s degree of motivation significantly influences his purchasing behaviour. Marketers today give particular focus to consumer motivation in the course of marketing process so as to persuade prospective consumers to purchase a particular commodity or service. Mainly there are two types of motivation such as intrinsic motivation and extrinsic motivation that influence an individual’s behaviour. Empirical evidences suggest that consumer behaviour theories can be a potential tool to explore what motivates individual consumers. This report is divided into three sections, including literature review, reflection, and discussion/analysis. In the first section (literature review), a total of four consumer behaviour theories such as marginal utility theory, consumer choice theory, perceived risk theory, and diffusion of innovations theory are discussed to gain a deep theoretical understanding of various factors that would influence a consumer’s degree of motivation and thereby purchasing behaviour. In the second section (reflection), one of my recent personal consumption activities will be described in order to analyse the motivational factors that led to the specific consumption process. Here, the way the organisation interacted with me to motivate me to consume the product is emphasised. In the third section (discussion/analysis), the major finding of the study is brought together for providing an analysis of my own consumer behaviour in the light of the issues raised in the literature review. Finally, the conclusion part summarises the key findings of the report. Literature Review In order to critically evaluate the impact of consumer behaviour theories on motivation within the marketing process, it is vital to acquire a better understanding of the concepts of marketing and motivation. The process of marketing is directed at the identification, anticipation, and satisfaction of customer requirements with the ultimate objective of profit maximisation. According to Philip Kotler, “marketing is that social process by which individuals and groups obtain what they need and want through creating offerings and freely exchanging products and services of value with others” (as cited in Singla, 2011, p.101). The marketing concept is the philosophy that requires companies to focus on the needs of their customers so as to promote decision making and to meet customer satisfaction better than competitors. As Shimasaki (2009, pp. 98-99) describes from the time of industrial revolution until early 1920s, there was a concept prevailed called production concept. The basic idea behind this concept was a company should focus on those products that it could produce with maximum efficiency possible. According to the writer, this approach would facilitate enough supply of the product at cheaper costs and thus demand would be created itself. Since there was a relatively high level of unfulfilled demand, all the goods produced were sold easily by the sale team whose job was to simply execute transactions at the predetermined price. The author tells that the situation notably changed by the early 1930s because widespread mass production and stiff market competition led to little unfulfilled demand. As a result, firms began to adapt to the sales concept or selling concept. Under the sales concept, companies would not only produce the commodities but also take efforts to convince consumers to purchase them through advertising and personal selling (Ibid). The major demerit of the sales concept is that it paid little attention to the market need of the product and customer satisfaction. Under this approach, marketers simply tried to beat the competition and to enjoy market dominance. Shimasaki points that after the World War II, there was a wide variety of products available and this situation significantly reduced the scope of hard selling. In addition, consumers became increasingly selective and began to buy only those products that met their needs precisely. In response to this changing situation, companies began to adapt to the marketing concept that focused on the precise needs of customers for enhancing customized product development. In addition, this concept aligned all company function to emphasise those needs and paid attention to realising profits by keeping customers satisfied (Ibid pp.98-99). In the words of Ferrell and Hartline (2012, p.24), the basic concepts of marketing include market, marketplace, marketspace, metamarket, metamediary, exchange, product, and utility. The authors add that there must be at least two parties to the exchange and each party should offer something of value to the other. In addition, each party must be in a position to accept or reject the exchange and capable of communication and delivery. According to Ferrell and Hartline, five types of utility are delivered through marketing exchanges such as form utility, time utility, place utility, possession utility, and psychological utility (Ibid p.24). Similarly, motivation is a key aspect in the area of marketing. The term motivation can be simply referred to the reason for a specific behaviour or behaving in a particular way. Mainly, there are two types of motivation such as intrinsic and extrinsic motivation. Intrinsic motivation reflects that an individual’s motivation stimuli come from inside him/her or simply it is the behaviour driven by internal rewards. An individual may be intrinsically motivated to perform a specific task because its results would in compliance with his/her system of beliefs. Some of the examples of intrinsic motivation include acceptance, curiosity, honour, social status, power, and independence. In contrast, extrinsic motivation is defined as the motivation that comes from outside the individual. Although the individual’s behaviour is influenced by external factors under extrinsic motivation, the results of the behaviour would be still rewarding for him/her. In the view of Pounds (2008), the difference between intrinsic and extrinsic motivation constitutes two key concepts of motivation. The writer makes it clear that the source of motivation for intrinsically motivated people is internal whereas it is external for extrinsically motivated people. He also says that the work itself motivates people under intrinsic motivation while the results of consequences of the work will provide motivation for people with extrinsic motivation (Ibid). In a broad viewpoint, the basic concepts of motivation may include power, prestige, privilege, recognition, wealth, and service. While analysing contemporary marketing scenarios, it is evident that firms use the element of motivation effectively to influence consumer behaviour and hence to generate more sales. For instance, automobile companies increasingly rely on TV ads and test drive arrangements to keep customers informed of the innovative product features and thereby to motivate them to buy the product. In order to evaluate the influence of consumer behaviour theories on motivation within the marketing process, four theories of consumer behaviour such as marginal utility theory, consumer choice, perceived risk theory, and diffusion of innovation are discussed. The marginal utility theory was proposed by Alfred Marshall in 1890 and still the concept has its relevance with respect to the law of demand. The marginal utility approach is based on the law of diminishing marginal utility (DMU), which states that the marginal utility of a commodity diminishes as the consumer has more and more units of this particular commodity. Ormazabal (1995) explains Marshall’s theory by pointing that the marginal utility approach is a great concept to understand the increase in satisfaction that consumers gain from consuming an extra unit of a commodity. The author describes that utility is an idea that consumers gain a certain level of satisfaction from consuming goods and services. The law of diminishing marginal utility is really beneficial for marketers to gain a deep understanding of the consumer behaviour and thereby to plan thoughtful marketing strategies timely (Ibid). The law of DMU is illustrated below graphically. (Source: Managed study.com) According to the marginal utility theory, it can be assumed that the first piece of a product (for example, chocolate cake) provides more utility than the 7th piece. Therefore, the motivation of consumers declines as they consume more and more units of a product. As a result, marketers cannot always charge the same price for the product that they charged for that product on the introduction stage. The price skimming strategy (the market practice of charging highest initial price) is often used to take advantages of the increased marginal utility at the beginning stages of product consumption. Similarly, consumer choice is another important theory or consumer behaviour that explains the relationship between consumer preferences and consumption expenditures. This relationship is widely used by economists to relate preferences to consumer demand curves. Referring to Gowdy and Mayumi (2001), the consumer choice theory explains how individuals decide their distribution of spending in the light of their personal preferences and budget constraints. Furthermore, this consumer behaviour theory describes how individual make purchase decisions considering their income and prices of goods/services. The author argues that this theory is greatly helpful to identify how individuals’ preferences and incomes influence the demand curve. In addition, this approach has the potential to explain why consumers react in particular ways to changes in different factors. The model also provides great insights into health related choices and behaviours (Ibid). From the consumer choice theory, it is clear that consumers’ purchase decisions are driven by a single objective – utility maximisation. To make it clear, an individual consumer would choose to purchase a commodity that provides him/her with maximum utility at low price. As the consumer choice theory can advise marketers what combination of bundles of goods an individual consumer is likely to buy within his/her budget constraint, it can benefit firms to frame most apt marketing strategies that would keep consumers motivated (Morris et al 2007, p.24). To be more specific, the consumer choice theory can aid marketers to predict possible consumer choices of a particular income group. Based on this model, marketers conduct extensive market surveys to explore consumer preferences and their budget constraints. In the words of Blischke (1995), the basic idea behind the perceived risk theory is that each purchase decision taken by a consumer involves some element of risk. “The amount of perceived risk associated with the purchase of a product is thought to be a function of the amount of uncertainty and the magnitude of the consequences that surround the choice of a particular product” (Blischke 1995, p.412). The author specifically states that this perceived risk may be financial, performance-related, psychological, social, or physical. The type of product can have a great influence on the relative significance of each type of risk that is identified with the purchase decision. To illustrate, social and performance risks may appear when making decision on the purchase of a deodorant product whereas consumer would face performance and financial risks when considering the purchase of an automobile (Ibid). It is identified that performance and financial risks are the most common forms of risk involved in most purchase decisions, and hence consumers give importance to these two variables in an attempt to reduce the degree of perceived risk. Marketing experts say that the element of perceived risk can really assist firms to make crucial decisions that can influence consumer motivation within the marketing process. When a marketer is really informed of the various risks that would bother consumers, it is easy for him/her to address those risks in an effective manner and to influence consumer behaviour. In the context of growing risk in the modern market environment, the perceived risk theory is of great help to companies in driving sales growth. Diffusion of innovations is a consumer behaviour theory popularised by Everett Rogers in his book Diffusion of Innovations. The theory seeks to describe why, how, and at what rate new ideas and technologies are adopted across cultures (Sankaran et al, 2005). According to the theorist, diffusion is process through which an innovation is spread through certain channels among the participants in a social system over a particular period of time. Rogers says that the spread of a new idea or innovation is influenced by four major elements such as innovation itself, communication channels, time, and a social system (Ibid). The process of spreading an innovation heavily relies on human elements. For ensuring the long term sustainability of the innovation, it must be widely adopted across different channels. In the process of adoption, there would be a point at which the process of diffusion reaches critical mass (Ibid, p.303). Rogers tells that there are five categories of adaptors including innovators, early adopters, early majority, late majority, and laggards. The process of diffusion takes place distinctively in various cultures and areas and it is significantly influenced by the type of adopters and the innovation-decision process. The diffusion of innovations theory can be linked to the product lifecycle theory. In the lifecycle of a product, it passes through five stages such as introduction, growth, maturity, saturation, and decline. Similarly, when a new idea is developed, it is likely to be adopted by only a small group of people called early adopters. Subsequently, the innovation is spread to other people. The chart depicting the adoption of innovation over time is given below. (Source: USC. Diffusion of Innovation) Reflection In this section, I will describe my recent purchase of Apple iPhone 6 as a consumption activity I have taken part. I purchased this product for US$ 499. Prior to this purchase, I had actually planned to buy a Samsung mobile after a long research on internet. However, the explosive sales growth of iPhone 6 along with a combination of various factors convinced me to change my purchase choice and to switch to this product. First, the widespread popularity of iPhone 6 even before the product launch made me put off taking the purchase decision. Statistical data showed that over 4 million iPhone 6 and iPhone 6 Plus devices were pre-ordered within its first 24 hours of availability, and it was a record in the corporate history of Apple (Apple Press Info). Warren reports that the sales of iPhone 6 and iPhone 6 Plus exceeded 10 million in the first three days, creating another Apple record (Ibid). Hence, I was eager to know what competitive features/advantages Apple iPhone 6 could offer me over the Samsung handset models. Subsequently, I made a thorough research on the Apple’s official website to understand the competitive features of this product and visited many online product discussion forums to collect feedbacks of the real users. Here I came to know that majority of the iPhone 6 users are satisfied with their product. Second, Apple significantly influenced my purchase decision through its social media promotions. I am an active Facebook user and a follower of the Apple’s FB page. The massive responses to the posts relating to the launch and the market movement of iPhone 6 really amused me. To my surprise, I realised that millions of people are keen to talk about this product as they are doubtlessly confident in the innovativeness of the company. Apple maintains a huge group of insanely loyal customers to defend and argue for the company in social media and other product discussion forums. This competitive advantage really benefits the company to cut down its promotion costs and pass the savings to end users. From the company’s official Facebook page, I noticed that Apple performed a bending test of the iPhone 6 in front of a group of journalists in response to a fast spread rumour that iPhone 6 was increasingly prone to bending defects. To be fair, this news increased my level of trust in iPhone 6. I noted that my friends frequently shared the news relating to this product and some of them have even shared those posts on my wall. Then I phoned a few of my friends who had recently bought iPhone 6 to know their opinions regarding the product performance. Interestingly, all of them were extremely satisfied and they strongly suggested me to buy one. Third, I was interested to enjoy the luxury offered by this product. Evidently Apple iPhone 6 is a prestigious product, and hence many people use this product as a way to show their class to others. I thought that buying an iPhone 6 would increase my status because none of my worksite colleagues had owned this latest version of the iPhone. Hence, the increased brand reputation of Apple also motivated me to buy this product. Undoubtedly, TV Ads of iPhone 6 was another channel through which the company interacted with me to influence my purchase decision. Since I was interested in iPhone 6, I have been noticing its TV Ads in an attempt to acquire more and more information about the product. The company succeeded in showing the high level creativity in its Ads too. Finally, Apple’s polite and highly efficient customer relations department also played a notable role influencing my purchase decision of iPhone 6. To know the current availability of iPhone 6 in my locality, I phoned the company’s regional customer relations manager, and the way she treated me deserves appreciation. In the local Apple store in my area, the iPhone 6 was running out of stock and hence she advised me to purchase the product online. However, I could not do it at that time due to some technical issues. Therefore, the manager mailed me a detailed list of other stores that sell this particular product currently. In addition, she even phoned me back after a few days when new stock of iPhone 6 reached my nearest Apple store. In short, the organisation interacted with me in several ways to motivate me to consume its newly launched product – iPhone 6. Discussion/analysis In the literature review section, four consumer behaviour theories such as marginal utility theory, consumer choice, perceived risk theory, and diffusion of innovation were discussed to identify how these theories influence motivation within the marketing process. This analysis was beneficial for me to identify my own consumer behaviour in the light of various issues raised in the literature review. From the above discussion, it is identified that a wide range of factors such as physical and emotional needs, geographic and demographic factors, personality and psychographic factors, and social and cultural factors influence consumer behaviour and motivation. When it comes to my own consumer behaviour, a combination of these various factors seems to influence my motivation to buy a particular commodity. It is observed that the consumer choice theory play a significant role in defining my consumer behaviour. The consumer choice theory explains the relationship between consumer preferences and consumption expenditures in the light of given budget constraints. I pay specific attention to meeting my physical and emotional needs first while making purchase decisions. Dlabay and Scott (2010, p.421) indicate that these needs generally include food, clothing, shelter, healthcare, transportation, approval of others, and personal satisfaction. I give specific emphasis to meeting personal satisfaction and approval of others, and hence I choose to buy goods marketed under well recognised brands. I strongly believe that approval of others adds value to our social recognition, which in turn may stimulate our personal satisfaction. In short, I would like to spend a major portion of my income to satisfy my physical and emotional needs. Once these needs are met, I would focus on geographic and demographic factors such as location, climate, population trends, and education. To be sincere, I am a strong supporter of the concept of sustainable development, and therefore I would not be loyal to any brand that does not stick to the idea of sustainable development, or more specifically environmental sustainability. I strongly think that businesses utilise natural resources and generate profits from the community in which they operate; hence organisations have an ethical responsibility to contribute to long term environmental sustainability and community welfare. To justify, I usually try to choose brands that devote a percentage of their revenues to social welfare and environment safety campaigns. Once the geographic and demographic needs are met, I turn to personality and psychographic factors which normally include attitudes, beliefs, opinions, personality traits, activities, and interests. I always try to emphasise my beliefs and opinions that mould my interests and activities. I am a strong theist and my religious teachings do not allow me to consume alcohol or substances. Therefore, I am really conscious not to purchase alcoholic beverages or other intoxicating substances complying with my religious beliefs. Being a socially responsible person, I do not like to support the sale of any commodity or service that is detrimental to the uplift or development of the society. This is the reason why I try to abstain from buying fast food items that lead to serious long term health problems like blood pressure and cholesterol. Finally, I give focus to social and cultural factors like family, friends, and community activities. From a consumer perspective, I will try to meet my preferences described in the order above within my budget constraints. However, it is relevant to note that I would spend additional money if the purchase of a particular commodity offers me greater personal satisfaction and social recognition. As the consumer choice theory reflects, utility maximisation is my primary objective behind each and every purchase. If I want to purchase a product out of two, I will certainly choose the product that would offer me the greatest level of utility. Based on the consumer choice theory, an efficient marketer can clearly predict what product/service would motivate me to make the purchase decision. The perceived risk theory can also define my consumer behaviour to some extent. When making a purchase decision, I am always concerned about the amount of uncertainty and the magnitude of the consequences associated with that particular purchase. I really take financial, performance-related, psychological, social, and physical risks into account before actually buying a product. I always pay particular attention to financial and performance-related risks because I am not a very rich person and at the same I am an innovation seeker. I would like to obtain better performing products at affordable rates. In other words, I always try to ensure that maximum utility is delivered for the money I paid. I do not give much emphasis to financial gains if the purchase involves some elements of social or physical risks. For instance, I do not purchase low cost refrigerators that emit higher volume of greenhouse gases or cosmetics that may produce unintended health effects. More clearly, I give first priority to safety. Likewise, the diffusion of innovations theory seems to influence my consumer behaviour. While analysing my consumer behaviour in the light of this theory, I belong to the ‘early adopters’ category. I am eager to adopt innovations at the earlier stages because I am an innovation seeker and hence I like to use new technologies and ideas ahead of others. I am always willing to pay a price premium for potential innovations so as to enjoy great living standards. As I mentioned already, I am always concerned of my social status and I usually buy prestigious branded products. Once the innovation is widely spread across cultures and fields, I tend to discontinue the use of those products and seek to adopt newer ideas or technologies. Hence, innovation is a key concept that can have a very sensitive influence on my consumer behaviour, particularly the level of motivation to consume a specific commodity. Finally, I observed that my family members, friends, and colleagues can significantly influence my level of motivation, as a consumer. Going back to the purchase of the iPhone 6, it is very clear that my friends played an important role in persuading me to buy that product. When buying status items like cars or foreign-made goods, I always consider what my friends or colleagues have and what I need to purchase to gain a position over them. In addition, TV ads influence my consumer motivation to some extent but I am not a regular viewer of TV programmes. I mainly rely on internet to acquire brand knowledge and information regarding newly launched products. As I spend several hours browsing internet a day, I am well aware of the product or technological innovations of major brands and the launch of new products or services. Hence, I am able to easily distinguish between various brands and to choose products/services that would meet my tastes and preferences. Obviously, the analysis of the theoretic models assisted me to define my consumer behaviour in the light of academic literature. Conclusion From the above discussion, it is clear that all the four consumer behaviour theories such as marginal utility theory, consumer choice theory, perceived risk theory, and diffusion of innovations are really beneficial to explain what motivates an individual to consume a particular commodity. The marketing concept focuses on the precise needs of customers in order to produce goods in line with tastes and preferences of end users. There are two forms of motivation such as intrinsic motivation and extrinsic motivation. The law of diminishing marginal utility states that a commodity’s marginal utility drops when an individual consumes more and more units of that particular commodity. The consumer choice theory explains how individuals’ personal preferences, spending, and budget constraints are correlated. The essence of the perceived risk theory is that each purchase decision involves some element of risk. Finally, the diffusion of innovations theory seeks to explain the way ideas and technologies are spread across different cultures and fields. My recent purchase of Apple iPhone 6 involved some elements of motivation that obtained from my friends and prestige-conscious attitude. From the literature review, I could identify that a number of influences such as physical and emotional needs, geographic and demographic factors, personality and psychographic factors, and social and cultural factors motivate my purchase behaviour. I always give prime priority to the brand value of the product so as to meet personal satisfaction and to achieve the approval of others. Finally, internet also notably influences my consumer behaviour to a great extent. References Apple Press Info. Apple Announces Record Pre-orders for iPhone 6 & iPhone 6 Plus Top Four Million in First 24 Hours. Available at: https://www.apple.com/pr/library/2014/09/15Apple-Announces-Record-Pre-orders-for-iPhone-6-iPhone-6-Plus-Top-Four-Million-in-First-24-Hours.html Blischke W (1995) Product Warranty Handbook. CRC Press. Dlabay L & Scott J (2010) International Business. US: Cengage Learning. Ferrell OC & Hartline M (2012) Marketing Strategy. US: Cengage Learning. Gowdy JM & Mayumi K (2001) Reformulating the foundations of consumer choice theory and environmental valuation. Ecological Economics, 39: 223–237. Morris S et al (2007) Economic Analysis in Health Care. US: John Wiley & Sons. Managed study.com. Law of Diminishing Marginal Utility. 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