Which theory suggests that consumer expectations of achieving desirable outcomes motivate behavior?

Autor:   •  March 3, 2016  •  Essay  •  1,222 Words (5 Pages)  •  903 Views

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Q1. Two different theories, drive theory and expectancy theory, suggest different motivators that lead people to behavior. Compare these two theories and discuss how marketers can use each to stimulate their customers' behaviors.

▶ Drive theory: Biological needs that produce unpleasant states of arousal motivate us to reduce it and return to a balanced state (i.e. homeostasis, thirst, hunger, etc.) / Implication:

Expectancy theory: expectations of achieving desirable outcomes motivates our behavior. / Implication:

Q2. Explain Maslow's hierarchy of needs and its marketing implication.

▶ Frequently used in positioning and ad message

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Q3. According to attraction and compromise effect, which brands are included in the consumers' consideration set can determine which brand is more likely to be chosen. Explain why these effects occur and how marketers use the effects in marketing context.

▶ Attraction (Decoy) Effect: Tendency to prefer B over A when an alternative C, which is inferior to B but not to A, is added (i.e. Preference for the better for similar option) / Used frequently on websites. Compromise Effect: B is more preferred in the trinary choice (A, B & C) than in the binary choice (A and B).

Q4. When consumers make a purchase decision of product or service for their future consumption, whether they purchase it for the near future consumption or for the distant future consumption can influence which alternative they would choose. Explain why the time of the decision making can result in different outcomes in consumers’ choice and discuss how marketers utilize the time influence on decision making.

▶ Construal Level Theory: Preference for an object depends on psychological distance (temporal, social, spatial distance) from the object. When distance from an object is distal, people consider abstract why-features more importantly (fun, trip itself). However, when distance from an object is proximal, people consider concrete how-feature more importantly (packing, driving). e.g. vacation choices (psychological distance

Q5. Consumers frequently make decisions based on the psychological value of gains and losses. Discuss the marketing implications of these behavioral characteristics.

▶ Prospect Theory: People make decisions based on the potential value of gains and losses, rather than the final outcome. Also, people tend to be loss aversion: losses loom larger than gains. / Implications: 1) Segregate gains (benefits) and integrate losses (costs), 2) Decouple the purchase from the consumption - Flat-rate pricing (health club, mobile phone svc), credit card.

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Learning Outcomes

• Describe the ways in which managers can use expectancy theory to motivate employees

Expectancy theory, initially put forward by Victor Vroom at the Yale School of Management, suggests that behavior is motivated by anticipated results or consequences. Vroom proposed that a person decides to behave in a certain way based on the expected result of the chosen behavior. For example, people will be willing to work harder if they think the extra effort will be rewarded.

In essence, individuals make choices based on estimates of how well the expected results of a given behavior are going to match up with or eventually lead to the desired results. This process begins in childhood and continues throughout a person’s life. Expectancy theory has three components: expectancy, instrumentality, and valence.

• Expectancy is the individual’s belief that effort will lead to the intended performance goals. Expectancy describes the person’s belief that “I can do this.” Usually, this belief is based on an individual’s past experience, self-confidence, and the perceived difficulty of the performance standard or goal. Factors associated with the individual’s expectancy perception are competence, goal difficulty, and control.
• Instrumentality is the belief that a person will receive a desired outcome if the performance expectation is met. Instrumentality reflects the person’s belief that, “If I accomplish this, I will get that.” The desired outcome may come in the form of a pay increase, promotion, recognition, or sense of accomplishment. Having clear policies in place—preferably spelled out in a contract—guarantees that the reward will be delivered if the agreed-upon performance is met. Instrumentality is low when the outcome is vague or uncertain, or if the outcome is the same for all possible levels of performance.
• Valence is the unique value an individual places on a particular outcome. Valence captures the fact that “I find this particular outcome desirable because I’m me.” Factors associated with the individual’s valence are needs, goals, preferences, values, sources of motivation, and the strength of an individual’s preference for a particular outcome. An outcome that one employee finds motivating and desirable—such as a bonus or pay raise—may not be motivating and desirable to another (who may, for example, prefer greater recognition or more flexible working hours).

Expectancy theory, when properly followed, can help managers understand how individuals are motivated to choose among various behavioral alternatives. To enhance the connection between performance and outcomes, managers should use systems that tie rewards very closely to performance. They can also use training to help employees improve their abilities and believe that added effort will, in fact, lead to better performance.

Practice Question

It’s important to understand that expectancy theory can run aground if managers interpret it too simplistically. Vroom’s theory entails more than just the assumption that people will work harder if they think the effort will be rewarded. The reward needs to be meaningful and take valence into account. Valence has a significant cultural as well as personal dimension, as illustrated by the following case.

ASMO in Japan

When Japanese motor company ASMO opened a plant in the U.S., it brought with it a large Japanese workforce but hired American managers to oversee operations. The managers, thinking to motivate their workers with a reward system, initiated a costly employee-of-the-month program that included free parking and other perks.

However, the program was a huge flop, and participation was disappointingly low. Why?

The program required employees to nominate their coworkers to be considered for the award. Japanese culture values modesty, teamwork, and conformity, and to be put forward or singled out for being special is considered inappropriate and even shameful. To be named Employee of the Month would be a very great embarrassment indeed—not at all the reward that management assumed. Especially as companies become more culturally diverse, the lesson is that managers need to get to know their employees and their needs—their unique valences—if they want to understand what makes them feel motivated, happy, and valued.

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