Humans are complex beings. Often we react to an idea in a negative or agressive way, when actually, the idea is quite good.
Why? We’re all logical beings, right? This is reactance at work.
Innovation, change and reactance
Psychologist Jack Brehm coined the term reactance in 1966. It covers the human behavours around resistance to new ideas or persuasion that results in hostility and flouting of authority. Fundamentally, we do not like to be told what to do, think or like, and this results in negative behaviour that is not always appropriate. Reactance is a great stifler of innovation and change.
Four strategies to stop customers fixating on price
A universal fear of companies is the chance that one or more of their products could be considered a commodity by their consumers.
Why is this so bad? If the customer views your product as a commodity, they will shop around for the best price, they will believe that there is no tangible benefit in buying from you over another supplier, thinking your product is equal to a host of other companies products.
Buyers in a commoditised market will focus on price, show scepticism, have low expectations on additional services, have low brand loyalty and have a very strong preference for swift and effortless transactions.
This is a bad situation for almost all businesses.
How sensitive to price are your customers? Should you make that price cut to keep up with new entrants to the market?
Whilst this is obviously a complex issue, there are a number of factors to search for in your customer base that may indicate they are less worried about the price of your goods or service than you think:
To help understand customer requirements it is helpful to think in terms of needs, wants and demands of the customer. Needs are defined as ‘states of felt deprivation’ such as food and self-expression. Needs become wants when it is directed towards a specific object or service that is believed to satisfy that need. Wants are the manifestation of the human need that is shaped by the individual and their culture.
Wants become demands when the customer has the capacity and inclination to pay for the object or service.
Marketers divide the types of needs into stated, real, unstated, delight and secret needs as shown below:
Alternatives to Maslow: Max-Neef
As discussed in an earlier blog post, Maslow’s Hierarchy of Needs has been getting a bad rap. The categories of Maslow’s are great, but the use of the pyramid seems questionable.
This line of thought, and a recent marketing assignment, had me wondering – if Maslows is faulty, what else could I reference when explaining possible needs of the consumer?
Enter Max-Neef’s theory of Fundamental Human Needs. According to wikipedia Max-Neef classifies the fundamental human needs as:
Kathy McMahon from blog peak oil blues has written a great post on Maslow’s and Max-Neef, if you have ten minutes to spare, check it out.
Maslows Hierarchy Of Needs is a very widely used MBA and marketing model. What is it, why is it contentious, and should you use it?
In 1943 Abraham Maslow came up with the theory that is commonly referred to as ‘Maslow’s Hierarchy of Needs’. Maslow believed that we have five main categories of needs:
- Belongingness & Love
It’s widely used, not just in marketing. In the marketing context it is used to help think on how the companies product or service meets these (usually) non-stated needs. By meeting the holistic needs of the consumer, the product will be more meaningful to them, and in turn, have greater success.
The following diagram summaries the theory: