WHAT MOTIVATES THE IRAQI MARKET?

Mohamed Ameen, Founder of TransPi

Daniel Pink, in his famous book, Drive, talks about motivation and what really motivates us. He mentions that we do have a motivation #1, which is a primitive survival drive that makes us strive to cover our basic life needs such as food, air, water, etc. and motivation #2, (Stick and Carrot) as the extrinsic motivations, where the more we do a certain type of thing, the more we will get rewarded (Carrot) and doing the opposite you get punished (Stick).

Meanwhile, the new motivation #3 is all about intrinsic motivators, which is what makes us feel good inside to give us the desired push (leadership, confidence, communication, trust, etc.).

The difference between the #2 and #3 motivations is that the former pays off in the short term, but it will backfire in the long run. Unlike the latter, you might struggle to keep it at the beginning, but eventually, it will pay off with good results.

Now, what about the market? How can we translate what we said above into the nature of the Iraqi market? How does it motivate the consumer?

And how will it affect businesses that take certain approaches to marketing their product or service? Before we start analyzing and mentioning a few aspects, we will be talking about companies in competitive industries, not small and medium-sized businesses that aim for sustainability and self-fulfillment. To give you a glimpse about what are the main and most noticeable competitive industries, take into consideration industries like food delivery, ride-sharing technologies, telecommunications, commerce, and others.

We know that when certain start-ups or companies first introduce themselves to the market, the “Market penetration” approach is their best method where they tend to capture the most available customers in the least amount of time by dominating the market with many discounts that can reach 100% discount! But is it worthy to offer a 100% discount while leaving behind the Blue Ocean or the added value they can capture without this much cash burning? Or even leaving behind the unfixed features in their service/product? Why do they do this? What is behind the mask? And how do the customers feel about it?

Back to our citation from Daniel Pink’s lovely explanation of human nature. Can we turn the tables by saying that companies who play on the pricing side may be the extrinsic motivators? Getting that endless number of customers on a tight schedule without building a long-term relationship with their end-users.

Buy now and get a 50% discount, buy this product and get the other one for free. In the past two years, we have seen a huge jump in the Iraqi market in certain industries and a wild competition between the companies.

LET’S BREAKDOWN THIS NATURE AND THE UNMINED INTENTIONS:

When company A entered the market and had a certain amount of cash that was way more than their actual expenditures, “market penetration” entered the game. This is for the following reasons:

• The company only mimics the existing companies since they know they are sustainable now and the market is profitable. This answer can’t be relied on because the Iraqi market is tightly closed (uncertain in its sustainability) and in its early stages of growth.

• The company is using this technique for its own greater good. As the Iraqi market is being exposed to the investment thoughts of many VCs (Venture Capitals), angel investors, and investment firms are putting their money in Iraq. The companies now tend to penetrate the market with the lowest price available and might reach 0 IQD. Their goal is not only to capture a greater market share in less time, but also to build a massive database of customers where the company will use this traction to seek another investment round! Their goal can be defined as “capture more customers now even with low-quality product/service, get the next investment round, and ???” We still don’t know what their intentions are since we still haven’t seen what the start-ups and companies are doing in this phase. We know that rapid growth is essential in such startups, but rapid growth left with product/service flaws is highly unpreferable.

• The most recently discovered answer may not be representative of most, if not all, of us, but it may be the truth.We are only motivated by price! Yes. We always say that we look for quality, but our actions are the opposite. Being relatively new to this experience might affect our prioritization. Many start-ups are utilizing this technique and we have been bombarded and spoon-fed with the lowest prices, but is it with reasonable quality and the experience that we really demanded? The answer will be a definite no.

Any start-up is a tool to either fulfill a “need” or enhance a “want”, and in the end, who are they selling to? A human being, and humans are influenced by plenty of daily actions and thoughts that, in the end, will affect their purchasing decisions. When start-ups in certain industries always play a market penetration technique, it will eventually lead to many consequences:

1. Lack of loyalty. Once the start-up acquires the customer with the lower price, the next one will capture the customer with a lower price too.

2. Over spoiling your child in the early years will result in a stubborn and more demanding child. Also here, spoiling the customer in a very short period of time with tons of discounts, prizes, coupons, or any other kind of discount strategy will lead the start-up to be buzzed with many questions like “Why haven’t you given me any discounts lately?” and “Why is there a discount for those people and I’m not getting one?”. When your customers open their eyes to see you spoiling them, they will never forgetthis first impression of you.

3. Choosing the lower price over the user experience will make your customer dislike you. Because even if the customer is benefiting from the discounts, the customer will always criticize the user experience. Once the customer has jumped into another solution or left you because of a bad user experience, they will not be retained back and will be considered as -1 in the database you showed to seek for the next round. It will require a huge effort to get them back into the funnel.

4. Not evaluating the importance of user experience from the very beginning will lead to two major issues: Getting a lot of negative reactions to the service/product and with a great chance of losing the customer no matter what discounts are made and leaving these

-unfixed features is a great door for other competitors to capture this in their favor.

5. It will make the start-up’s life harder in the long run. When many discounted push strategies are done, it narrows the profit margin, and that requires a massive sales effort in the future at higher prices to recover.

Playing on the price side and going as low as possible can be called the #2 motivator in the market. When seeing the huge usage of certain products/services now, but then? making an unwelcome influence where customers lose sight of the meaning of quality and their love for that product/ service And if this is done while there are numerous issues with the user experience, the consequences are even worse.

While taking into consideration the user experience and the story behind every single purchase, the customer has bought the product/service and is not only thinking about having a 50% discount. It’s the #3 motivator. Not all people are your customers, and anyone showing interest in your product/service is not going to buy it from you. It looks hard initially, but it will build an army that will never leave its beloved ones behind. It’s not about the actions that you take, but the influence that you leave.