Comparison among Needs, Wants and Demands with an example
Needs wants and demands are a part of basic marketing principles. Though they are 3 simple worlds, they hold a very complex meaning behind them along with a huge differentiation factor. In fact, a product can be differentiated on the basis of whether it satisfies a customer’s needs, wants or demands. The societal marketing concept holds that the organization should determine the needs, wants and interests of target markets. It should then deliver superior value to customers in a way that maintains or improves the consumer’s and the society’s well being. Each of them is discussed in detail in this article –
(a) Needs – Human needs are the basic requirements and include food clothing and shelter. Without these humans cannot survive. It is the essentials that a person requires for the sustenance of his life. An extended part of needs today has become education and healthcare. A need is something you have to have such as air, water, and food. Generally, the products which fall under the needs category of products do not ‘require a push. Instead, the customer buys it themselves. But in today’s tough and competitive world, so many brands have come up with the same offering satisfying the needs of the customer, which even the “needs category product” has to be pushed in the customer’s mind. These are essential for human beings to survive.
Example of needs category products/sectors – Agriculture sector, Real Estate (land always appreciates), FMCG, etc.
(b)Wants – Wants are a step ahead of needs and are largely dependent on the needs of humans themselves. It is a thing without which you can live but those make your life easier, in economics, you get a higher level of utility consuming them. For example, you need to take a bath. But I am sure you take baths with the best soaps. Thus Wants are not a mandatory part of life. You DONT need a good smelling soap. But you will definitely use it because it is you want. In the above image, the baby needs milk but it WANTS candy. So, wants aren’t essential for humans to survive, but it’s associated with needs. It could be even something a person might not need. For example, if we always manage to satisfy our wants, it transforms into a need.
Example of wants category products/sectors – Hospitality industry, Electronics, Consumer Durables, etc, FMCG, etc.
(c) Demands – You might want a BMW or a Mercedes for a car. You might want to go for a cruise. But can you actually buy a BMW or go on a cruise? You can provide you have the ability to buy a BMW or go on a cruise. Thus a step ahead of wants is demands. When an individual wants something which is premium, but he also has the ability to buy it, then these wants are converted to demands. The basic difference between wants and demands is desire. A customer may desire something but he may not be able to fulfill his desire. It is faster than needs and wants because here, your budget is also taken into account as it is presumed that you have a fixed budget and you can act according to that only. Demand is related to budget, so the amount you buy decides your level of utility depending on your budget.
Example of demands – Cruises, BMW’s, 5-star hotels, etc.
The needs want and demands are a very important component of marketing because they help the marketer decide the products which he needs to offer in the market. It becomes easier to deal with monotonous problems, related to marketing. Thus the flow is like this.