Needs, Wants, and Demands: It Pays to Know the Difference
Understand the distinction between needs, wants, and demands in marketing and explore how these factors influence consumer behavior.
September 18, 2023
Introduction
Businesses struggle with marketing for many reasons. One of those reasons is often linked to the customer’s needs, wants, and demands.
Confusion around these terms can prevent brands from understanding their customers’ buying motivations. As a result, businesses squander money on marketing campaigns that don’t resonate with the target audience.
To be successful, brands must have a solid understanding of customers’ needs, wants, and demands. Knowing the difference can transform your business’s marketing strategy.
The Difference Between Needs, Wants, and Demands in Marketing (With Examples)
A significant disconnect between the target audience and brand occurs when the brand presumes customers know what they need. But people don’t always know what they need and often confuse needs and wants. To get clarity, let’s look at the basic difference of each with examples.
NOTE: To keep everything concise, I’ll consistently use the word “product.” However, if you’re a service provider, your service is your product. The concepts of needs, wants, and desires apply to both.
Needs
Maslow’s Hierarchy of Needs is a popular motivational theory that outlines basic individual needs. The type of needs are:
- Physiological needs
- Safety needs
- Belonging and acceptance (love)
- Esteem needs
- Self-actualization needs
This psychological framework makes for an interesting exploration of individual personality. But it can be tricky when applying it to the marketing mix.
In marketing management, needs refer to the underlying customer desire for a product’s specific benefit. Physical needs, such as comfort, convenience, and health, are examples.
Need drives a consumer to buy specific products, underpinning all decision-making processes. For instance, while food is a basic human need, the type of food companies a consumer buys from may be influenced by their specific needs. A fitness enthusiast might opt for high-protein food brands. A busy professional might prefer quick, on-the-go meals.
Understanding the needs of the customer and their basic requirements allow marketers to position a product as the ideal solution. However, there are several challenges that come with needs-based marketing. We’ll explore the obstacles more in the sections that follow.
Wants
While human needs are tied to survival, wants are desires or cravings consumers have beyond their basic needs. For instance, a customer might need a car for transportation (need). But they want a Tesla (want) because of its luxurious features, brand reputation, and commitment to sustainability. Similarly, someone might need a meal (need), but they want a gourmet burger from their favorite restaurant (want).
External factors play a vital role in shaping human wants. Examples of these factors are culture, social context, marketing influences, and personal preferences.
Wants can also vary among individuals within the same target market. It’s important to note that while wants can drive significant consumer spending, they are often more flexible than needs. During economic downturns, consumers are more likely to cut back on their wants, focusing primarily on their survival and safety needs.
Demands
A demand isn’t just wanting something—it also hinges on whether someone is willing and able to pay for it.
Demand combines want with purchasing power. For instance, a person may need a car for transportation, but they may want a luxury car brand like Mercedes-Benz. The customer’s buying power fuels the demand for luxury cars like Mercedes.
Understanding these three concepts allows businesses to tailor their marketing and advertising strategies more effectively. This also enables businesses to create products that meet their customers’ desires and ability to pay.
As an example, a company selling smartphones doesn’t just sell a device to make calls (need). They also sell high-tech design, a range of functionalities, and a status symbol (wants). And by offering different models at varying price points, they cater to the demands of different consumer groups.
Demand combines want with purchasing power.
The Challenges of “Needs Marketing”
Meeting customer needs is a fundamental part of business in today’s world, but it’s not as straightforward as you think. It’s difficult to leverage a person’s need in marketing for several reasons:
- Identifying the Real Need: Understanding customers’ actual need can be difficult, especially when customers themselves are not clear about their needs. Sometimes, people perceive a want as a mandatory part of life, even when it isn’t.
- Changing Needs: As time passes, customer needs change. Keeping up with these changes can be challenging.
- Competition: Many businesses might sell the same product that fulfills a particular need. Standing out from the competition and convincing customers your brand is superior can be tough.
- Price Sensitivity: If the need isn’t urgent, customers may be more price sensitive. They may choose a cheaper option or delay the purchase until they find a better deal.
- Communication: Effectively communicating how your product meets the customer’s need is crucial. However, crafting a unique selling proposition and compelling message that motivates people to buy can be complex.
- Customer Perception: Sometimes customers may perceive their wants as needs. It’s a challenge for businesses to realign this perception.
- Building Trust: Customers need to trust that the product will fulfill their need as promised. Building this trust requires time, consistency, and proof of effectiveness.
Often, consumers may not recognize their actual need or be aware of the potential solutions available. So, it’s up to businesses to identify these hidden needs and educate consumers about them.
For instance, a software company might discover that customers spend an excessive amount of time manually tracking tasks and projects. Even though customers may not see the need, the software brand can introduce a task management feature into their product. Then, they can then educate their customers about this feature. To do this, they might show customers how the new feature can simplify project management and save time. As a result, the brand addresses an actual need and influences the individual’s perception of product value.
Successful marketing strategies highlight the existence of real needs and present the company’s product as the perfect solution. This is called product positioning and requires keen market insight and creative thinking. Most of all, companies must experiment with marketing messages to find the ones that hit the mark.
Developing Marketing Strategies by Linking Needs and Demand
The intersection of underlying need and demand is where marketing magic happens. To connect consumer needs with your product, you must understand the audience, types of needs, and how to position your product.
Here’s how to go about it:
Understand Key Influencing Factors
The first step is to understand the key factors that influence why the customer buys a product. These factors can be tied to pain points, aspirations, lifestyle, social needs, cultural background, or personal preferences. Let’s use a fitness app as an example. Customer pain points may include lack of time for the gym, and aspirations could be their desire for a healthier lifestyle.
Identify Unmet Needs
The next step is to identify unmet needs, which create a gap in the market. These gaps represent opportunities for your business. They could result from poor service quality, high prices, lack of innovation, or unfulfilled expectations in the current market offerings. For instance, using the fitness app example, an unmet need could be personalized workout plans that adapt to the user’s progress and feedback.
Translate Needs into Demand
Once you’ve identified unmet needs, the challenge is to translate these needs into demand for your product. This involves highlighting the unique features or benefits of your offer that specifically address these needs.
Let’s continue with our fitness app example. If the unmet need is personalized workout plans, you could highlight how your app uses AI algorithms to customize workout routines based on individual user data. This feature directly addresses the identified need. Communicating this effectively can stimulate demand for your app.
Your marketing messages should clearly articulate how your product meets the consumer’s needs better than existing solutions. This requires clear, persuasive communication across each distribution channel.
The goal is not just to generate initial demand, but to build sustainable demand over time. To do this, brands must monitor and respond to changes in consumer needs, market trends, and competitive options.
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Creating Long-Term Demand
Once you’ve identified the link between need and demand, the next step is to create long-term demand. This involves showing potential customers that your product can meet their need and is the best option available.
Here are several strategies businesses can employ to build long-term demand for their products:
1. Loyalty Programs and Subscription Models: These strategies encourage repeat purchases by offering exclusive benefits or discounts to loyal customers. They create a sense of belonging and make customers feel valued, which can lead to increased brand loyalty and long-term demand.
2. Product Scarcity and Exclusivity: Creating a sense of scarcity or exclusivity can make a product more desirable. This could be achieved through limited edition products, exclusive membership access, or time-limited offers. Luxury brands are exceptionally adept at using exclusivity to fuel demand.
3. User-Generated Content: Encouraging customers to share their experiences with your product can generate authentic testimonials and increase brand trust. Social media contests, review incentives, or featured customer stories are examples.
4. Product Enhancements: Continuous product development and research can lead to improvements that meet evolving customer needs and market trends. This not only attracts new customers but also helps keep existing ones.
5. Data-Driven Strategies: Using data analytics can help businesses understand their customers better and tailor their marketing strategies accordingly. This can involve tracking customer behavior, analyzing market trends, and adjusting strategies based on these insights.
6. Free Products, Services, or Resources: A trial version of a product, an eBook, or a tool, can attract potential customers. This also gives them a taste of what to expect from the full product or service.
7. Word-of-Mouth Marketing: Providing exceptional customer experiences can lead to positive word-of-mouth referrals. Happy customers are more likely to recommend your product to others. This is called organic demand.
8. Market Research: Regularly conducting market research can help businesses stay updated on customer needs and market changes. This information can guide product development and marketing strategies.
9. Collaborations and Partnerships: Partnering with industry influencers or complementary brands can expand a business’s reach to new audiences.
Use Brand Audit Insights to Develop a Demand Generation Strategy
Remember, needs are basic human requirements, while wants are shaped by our social context and personal taste. Demands are wants backed by purchasing power. A product or service that aligns with customers’ demands will attract and retain loyal customers.
Conducing a brand audit is a key step towards understanding consumer motivations. A brand audit allows you to assess how your brand is currently performing and understand how it’s perceived by consumers. This information enables you to create targeted demand generation strategies.
If you’re ready to dive deeper into your customers’ needs, wants, and demands, then it’s time to schedule a brand audit. The Brand Auditors is ready to guide you through this process, from start to finish and beyond.
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