Motivation and Product Design

Reflecting on the economic motivation that drives consumptive and productive activity.   Economics itself is based on a particular view of human nature - that each individual serves their own self-interest - an a peculiar focus on strictly material outcomes.   It occurs to me that this is myopic, and that it leads us to ignore the psychological needs that can outweigh the functional needs, and arguably precede them.

That is, the value we take as consumers is a combination of functional or "real" needs and psychological or "imaginary" ones: the physical need to be protected from the environment leads to the economic action of purchasing a coat, but the physical need alone would be satisfied by the cheapest coat that is sufficient to maintaining warmth.   The psychological need for status leads to the purchase of a very expensive designer jacket, even if it is not sufficient to the physical need.   More often, consumers consider both needs in finding a coat that is both serviceable and fashionable at a price point between the extremes.

Considering the difference in price between the cheapest functional coat and the most expensive one, or even the cheapest functional coat and the one most consumers purchase, it would be difficult to deny that the percentage of our economic behavior driven by functional needs is very small, and that which is undertaken to serve psychological needs is quite large.

Of course, for these motivations to result in an actual purchase requires a situation in which the consumer has sufficient capital to serve his desires and the market provides an array of options from which he can choose.    That is, actual purchases are constrained by budget and availability, so having little money and few choices may mean that they must take what they can get - but it does not change the motivation of the consumer: the fact that someone cannot afford something or it is not in stock does not mean they do not want it, and would not purchase it were it available and affordable.

As such, the constraints are valid but largely incidental.  In markets where there is sufficient consumer wealth and sufficient supply, consumers seek to serve both functional and psychological needs in their purchasing decisions, and the majority of spending in terms of aggregate amount is in pursuit of psychological needs.

With that in mind it seems ironic, and more than a little dysfunctional, that producers in the marketplace are disproportionately concerned with the lesser of the two motivations: they make products better in a functional sense (the efficiency, durability, or addition of features that improve and enhance its suitability to the basic physical needs the products address_ while completely ignoring that functional need is a small factor in the appeal to the consumer.

Granted, that for most rational consumers the functional need is a "must have" and the psychological need is a "nice to have" - and so the functional needs cannot be ignored, but once they are satisfied they are no longer considered and their pursuit to excess of need becomes irrational and somewhat silly.   Perhaps it can be argued that the functional need mutates into a psychological need: there is no functional need for a vehicle whose top speed is above 85 mph (given a speed limit of 70, plus a little more for passing or evasion), but believing a sports car is capable of going over 200 mph provides a psychological stimulus to a consumer who will never drive at that speed.  Given that the top speed of a vehicle is seldom mentioned in advertising, the number of customers who seek to serve that need is rather few, but each of them will pay a significant premium for a capability they will never use.

It's also worth noting that psychological needs are seldom connected to physical attributes in more than a superficial way, giving marketers a great deal of latitude in associating psychological values to products that have no definite (or even plausible) method of delivering them.   There is nothing about soda pop that is capable of making a person more attractive to the opposite sex, but a great deal of advertising that suggests exactly that.

But I've likely digressed: returning to the notion of functional and psychological benefits, they are served by different functions on the supply side: product designers make them more functional, marketers make them more psychologically desirable, and where conflict arises between the two, the resolution can be identified by considering the degree to which customers value (as demonstrated by the price they are willing to pay) one versus the other.

I am left with the sense that this is not very well considered in the design of many products and achieving the proper balance is neglected in their marketing as well.