Different Types of Commitment in Marketing, and How Commitment May Be Measured - Assignment Example

MARKETING RESEARCH Individual Assignment Question 1: Discuss the different types of commitment in marketing, and how commitment may be measured In the current competitive market and with the unpredictable trend in the markets such as the financial meltdown experienced in 2008/09, companies must establish a relationship with their customers so that they can survive. Customer loyalty and trust are not enough, but commitment is integral in relationship marketing (Abeysekera & Hewawasam, 2010). Commitment is defined as the persistent desire to uphold value relationship. It is an essential component for effective long term relationships. Customer commitment represents just a small portion of the customers even for giant companies. Nevertheless, the effect of committed customers is immense. Committed customers not only purchase regularly, but also consume a variety of products from the supplier and are less concerned with the pricing factor. In essence, committed customers stick to the supplier at all times and they have little or no concern over competitors. There are three forms of commitment in marketing as put forth by Buttle, (2009). They include instrumental commitment, relational commitment and value based commitment. Instrumental commitment is when a customer is assured that no other company or offer could do a great job in fulfilling their needs. The customers in this case are not just satisfied, but consummately satisfied (Buttle, 2009). The customers feel that, all their articulated and latent needs have been satiated. For instance, when a customer feels that his or her airliner has the best services, best offers, best access, best process, better rates and a good reputation, he or she is committed. Relational commitment on the other hand is when a customer becomes personally attached to the organization’s people. An emotional relationship may be established with an individual employee of the organization or a work group or the entire company (Buttle, 2009). Customers feel a sense of personal identification to certain employees in the company and express their commitment by referring to them as ‘my banker’, ‘my builder’, ‘my hairdresser’ or ‘my mechanic’. Regularly, these are employees who go an extra mile to completely satisfy customer’s needs (O'Malley & Tynan, 2000). They are competent, reliable, empathetic and approachable. When such employees recover an at risk client, they establish friendship with them. These employees are usually recognized as idols, feted and celebrated in most customer oriented organizations (Buttle, 2009). For instance, there is a story of a customer service agent at American Express who responded to a call from a customer that had just been robbed of his belongings, by arranging to have his travellers checks replaced and delivered to him in person. The agent also arranged for hotel reservation and a cab to pick the customer from the telephone booth and alerted the authorities which is outside his line of duty. Customers can also become committed or attached to a certain work group, say a bank branch. Such customers feel very much committed to a particular branch and prefer not to transact elsewhere even if it’s convenient (Morgan & Hunt, 1994). Finally, a customer can be attached to the entire organization by believing that its people are friendliest than competitors, or provide the best products or services. Finally, value based commitment entail a situation whereby a customer become committed when their personal values/beliefs match with those of an organization or a company. Values are defined by Buttle (2009) as core beliefs that surpass perspective and serve to organize and guide attitudes and behaviors. Customers have various core beliefs such as honesty, independence, child protection, environmental concern, family centeredness (Buttle, 2009). Many of these beliefs echo their cultural norms. When these values match with those of the company, the consumers may become committed to the company (O'Malley & Tynan, 2000). Companies that have been alleged for child labor, environmental degradation, employee abuse, or any other unethical practices put themselves at risk of losing customers’ commitment. For instance, Nestle lost approximately $40 million in revenue after being accused for selling infant formula in countries in Africa where the infrastructure made its use hazardous. Several infants lost their lives as mothers/caregivers used unclean water and unsterilized utensils. Just as customers can act against companies that are in violation of their personal values, they can as well commit to those companies that reflect their values. Studies support the idea that, there exists a hierarchical relation from values to attitudes, to purchase desire, and eventually to purchase. Many companies have profited from value based commitment including Body Shop, Virgin Airways, and John Lewis among others. Body Shop for instance supports for community trade, environment and human rights as well as refuses to source products tried on animals. Highly committed customers are more involved with a brand or a company, which not only indicate frequent buying, but also additional aspects of what can be termed as “corporate citizenship” such as being a volunteer agent by expressing positivism, giving frequent feedback about their experiences, participating in online user groups and communities, participating in company’s research, contributing to establishment of a new product or service as well as being ready to forgive when there is service failure or a company makes a fault (Buttle, 2009). Customer commitment leads to long term customer relationship. Customer commitment is usually reflected in the behavior of customers. It can be measured by observing customers behavior and feedback. Customers may refer others to a favorable service provider or supplier (Grönroos, 2004). They may show commitment through traveling for longer distances than necessary or by paying higher prices while there are alternatives from competitors. Commitment is also echoed in the attitudes of the customers. Committed clients believe that, their preferred company is the ultimate in the sector. To measure commitment, B¨ugel, Buunk, & Erhoef (2010) proposes a social psychological model; the investment model in which commitment is determined by the level of satisfaction, quality of alternatives, and investment size. Only a small number of customers are committed even to some highly respected companies. Nevertheless they argue that, the value of the committed customers is colossal (O'Malley & Tynan, 2000). Besides sticking to the company for longer, committed customers buy frequently and tend to by a variety of products from the supplier. Such customers have little concern over prices, prepared and pay about 9 percent price premium. In addition, they continue recommending others and have little concern about competitors. Conclusively, customer commitment is an important aspect for a successful relationship between the customers and the business. It determines how a business fairs amid stiff competition in the market. Committed customers remain loyal and feel some form of personal identity with the business or the product. As a result, these customers are likely to be voluntary advocates of the business through word of mouth. It is thus upon the business to ensure that their customers become committed to the business as much as possible in order to reap the benefits accrued to commitment. References Abeysekera, N. and Hewawasam, B. (2010), Relationship Marketing: Customer Commitment And Trust As A Strategy For Corporate Banking Sector In Sri Lanka, http://www.kln.ac.lk/uokr/ICBI2010/52.pdf B¨ugel, M.S., Buunk, A.P. and Erhoef, P.C. (2010), A Comparison of Customer Commitment in Five Sectors Using the Psychological Investment Model, Journal of Relationship Marketing, vol.9, 2–29. Buttle, F. (2009), Customer relationship management: Concepts and technologies. Amsterdam London: Butterworth-Heinemann. Grönroos, C. (2004), The relationship marketing process: Communication, interaction, dialogue, value, Journal of Business & Industrial Marketing, vol.19, no.2, 99-113. Morgan, R.M., and Hunt, S.D. (1994), The commitment-trust theory of relationship marketing, Journal of Marketing, vol.58, 1-38. O'Malley, L., and Tynan, C. (2000), Relationship marketing in consumer markets. Rhetoric or reality? European Journal of Marketing, vol.34, no.7, 797-815. Question 2: Discuss the role of emotions in marketing and give some practical suggestions on how emotions can help sell a product of your choice. Emotion marketing entails the way a business can employ emotions to market its services or products, to boost brand loyalty, and to establish lifelong commitment with customers. The key aspect in emotion marketing is to establish and implement marketing strategies that aim at stimulating passionate feelings in consumers to move from rational buying behavior to emotion buying behavior. Emotion satisfaction is an important factor in influencing pre-purchase as well as post purchase decisions (Bagozzi, Gopinath, & Nyer, 1999). Before buying a product, a consumer wants to be assured that they have got value for their money and effort to acquire a product or a service. In addition, after purchase, they want their emotions to be satisfied with the choice they made during purchase. This will influence their repurchase decision in future (Bagozzi, Gopinath, & Nyer, 1999). Thus emotions are critical in marketing. Hallmark’s value star model is one of the original models that help understand how emotion marketing works (Robinette et al., 2000). The model has two parts, the traditional rational part and the new emotional part. This model thus shows that the decision to purchase, is a product of both rational and emotion perspective. According to Hallmark, the five factors include; product, money, equity, experience and energy (Robinette et al., 2000). Money is usually the first rational factor that customers consider while buying. The product must be reasonably priced for the consumers to be able to purchase. Secondly, the rational buying decision is influenced by the product (Robinette et al., 2000). The product should be of good quality and should be able to satisfy the need of the consumer. Thus, the price is not solely a factor of marketing. Consequently, there is transition to emotion buying. Equity is an emotion aspect. It is the combination of the trust a product or a brand earns and an identity it influences on consumers. This entails the capability of the company to keep its promise to the customers through quality product, advertisement and promotion that match customers’ expectations. This makes consumers feel emotional attachment to that brand (Robinette et al., 2000). Experience on the other hand is the customers’ interaction with the brand. How the customers are served, the attitude of the customer when they visit the shop, customer service and ultimately the use of the service or the product itself (Ming-Hui, 2001). Finally, energy entails how much time it takes for customers to acquire the product (Ming-Hui, 2001). If it’s cumbersome to obtain a service or a product, this may affect customers’ emotions despite the product having strong brand identity. They may opt to look for an alternative supplier as time has become an important factor. Emotion marketing has been widely used in advertising. The effect that an advert has on the consumer to influence decision to purchase is entirely emotion based. The various adverts are designed to arouse the emotions of the consumer and persuade them to buy a particular product. Adverts are classified into two categories as suggested by Bagozzi, Gopinath, & Nyer, (1999); the thinking ads where the main focus is on the product’s factual information or utilitarian consequence and feeling ads, where focus is directed on the emotions one will experience by using a product or service or by owning it. Betra and Ray (1986) conceptualized three positive affective reaction types, related to feeling ads; “surgency-elation-vigor/activation (SEVA), deactivation and social affection feeling” p241. SEVA entail upbeat happy mood reactions (such as “the ads music was catchy”); deactivation entails relaxing, soothing, pleasing reactions or quite while social affection feeling include feelings of tenderness, warmth, and caring (Betra and Ray, 1986). These feelings influence the decision of the consumers, which is the reason why some ads do magic by increasing the popularity of a product, increased sales and boost profits. Emotion marketing has been embraced whether consciously or consciously in the contemporary marketing and it does not disappoint when used appropriately. Selling of electronics, say laptops can utilize emotion marketing. Values five star model by Hallmark will be used in this case. First, electronics are traditionally expensive, but that does not mean that consumers do not consider pricing. Hence when selling laptops, the pricing must be considerate and pocket friendly to the clientele. Once pricing have been considered, the laptop should have the appropriate features that will help meet the needs of the customer, say if it is a student, it should have features for allowing the student to study, research, do assignments appropriately by having the necessary programs installed. Secondly, students are youthful and significantly concerned with issues of entertainment. Thus the laptop should have features will satisfy this needs as well as social media interaction such as pre-installed Skype. From rational buying, the consumer will move to emotion buying. Now that the product has qualified for purchase, the student would check on equity. How the various brands of laptops, most of them having the same features create a sense of identity in them. The buyer will look for the trust that each brand has earned in the market and chose which one to buy, say Apple, HP, TOSHIBA, COMPAQ, Acer, etc. Once this emotion is satisfied, the customer will look at the experience of buying such a product. The experience the buyer haves in a particular store will influence their buying behavior. If it’s on a website, they would chose to purchase from a convenient website that is detailed, offers a variety of payment methods, and communicates to the customer when need be and is ready to answer any questions from the customer. Finally, energy as an emotion concern is critical in purchasing of a laptop. Considering that students are busy and do not have time to move from shop to shop, it is important that they are able to obtain a product within the shortest time possible with little or no hustle. Thus, if a student will have to purchase a laptop, they would be influenced by emotions in reaching a decision on which laptop, and where to buy it from. As Bagozzi (1997) concludes, consumers’ decision making is largely influenced by emotional progressions and their role in purposive action. Emotions serve to provoke action, succeed information processing and ultimately control the pursuit of consumption objectives. Emotion marketing is a reality that every marketer should consider in their marketing processes. It is the determinant to getting loyal customers and establishing a lifelong commitment with customers. In the current global markets, where competition is intense and with unpredictability of the future markets, it is good for any marketer to encompass emotion marketing to survive such uncertainties. References Bagozzi, R.P. (1997), Goal-Directed Behaviors in Marketing: The Role of Emotion, Volition, and Motivation, Psychology & Marketing vol. 14 no.4, 309–313. Bagozzi, R.P., Gopinath, M. and Nyer P.U. (1999), The Role of Emotions in Marketing, Journal of the Academy of Marketing Science, vol.27, no.2, 184-206. Betra, and Ray, M. (1986), Affective Responses Mediating Acceptance of Advertising, Journal of Consumer Research, vol.13, 234-249. Ming-Hui H., (2001), The Theory of Emotions in Marketing, Journal of Business and Psychology, Vol. 16, no. 2, 239-247. Robinette, S. et al. (2000), Emotion Marketing: The Hallmark Way of Winning Customers for Life, New York: McGraw-Hill. Read More