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Every customer interaction is fueled by a mix of elements: what customers truly require, what they desire, and what they actively seek out. By examining these facets, companies gain insights that shape their approach to product development, marketing campaigns, and service offerings. As we navigate through customer analysis, we'll explore how decoding these elements unlocks a deeper understanding of customer behavior and preferences.

In the next article we will discuss customer needs, wants and demands and the differences between them. 

Needs, Wants, and the three basic concepts in marketing (with Examples)

As a marketer, you must understand well about the difference of Needs, Wants, and Demands. This article explains detail about Needs, Wants, and Demands with examples. After reading this article, you will understand not only the overall concept of Needs, Wants, and Demands, but also the difference of each. Let’s start learning about Needs, Wants, and Demands in Marketing.

Table of Contents

NEEDS – The essential things for us to survive

Needs are the essential things to fulfill the states of deprivation for our survival. Needs can be basically divided into Physical Needs, Social Needs, and Individual Needs.

• Physical needs include the basic human requirements such as air for breathing, food, water, clothing, and shelter.
• Social needs are the requirement for belongings and affection from friends and family.
• Individual needs can be varied depending on each person’s perception, knowledge, and environment.

The famous psychologist Abraham Maslow said in his book of “A Theory of Human Motivation” that Human Needs could be fulfilled in a specific order of five-tier. Let’s study about “Maslow’s Hierarchy of Needs Theory” in the next topic.

Maslow’s Hierarchy of Needs

“Maslow’s Hierarchy of Needs” or so called “Five-tier Model of Human Needs” has specified human Needs into five levels as in the following:

• The first level of needs are the Physiological needs which are essential for us to survive. So this can include anything from air for breathing, water, food, sleep, shelter, and clothing.
• The second level of needs are the needs for Safety. The safety needs can include personal security, safety of resources, safety of employment, safety in property and health. All the safety needs are the basic needs for humans as well.
• The third level of Maslow’s Hierarchy of Needs is the need for Love; the need to belong, the need to have friends and family. So this level of needs is called the social needs.
• The fourth level is the needs for Esteem, self-esteem. In this level, we like to feel confident and have a sense of achievement in what we do. So this level is also called as the level of respect. We like to gain respect from others in this level.
• The fifth level is called Self-actualization level. Self-actualization is basically our need for wanting morality, a sense of morality, a need for acceptance and also creativity. In other words, the level of self-actualization can be called as the level of our full potential.

As a marketer, you should know which level of Needs is your product targeting to.

Please see the below figure for the example of companies fulfilling each level of human’s needs.

In here what we need to know is that the human’s level of needs is not always going up level by level. For example, some authors, artists, and researchers are willing to bear with the poverty to do what they want to do.

Their basic needs might not be fully fulfilled, but they are satisfied with themselves for being able to do what they love. They can be accounted as the group of people who have reached the level of Self-actualization needs even without fulfilling the basic needs.

As a marketer, understanding the human’s level of needs is not enough for us.  As people cannot always express what they need; some people are not even fully conscious of their needs.

Therefore it has come to the role of marketers to distinguish the type of customer’s needs. According to Kotler Keller (“Marketing Management 15e”, pp.31), the needs can be specified into five types. Let’s study the “Five Types of Needs” in the coming topic.

Five Types of Needs in Marketing

The “Five Types of Needs” that marketers should know in order to distinguish the type of customer’s needs are as following:

1. Stated needs: A customer wants to buy a car and if he says he needs a car, then such need is termed as STATED NEEDS.
2. Real needs: When the customer wants a car for actual need like he needs a car for going to work with low operating costs, not low initial price, then such need is termed as REAL NEEDS.
3. Unstated needs: Customer also expects a good after-sales service from the dealer when buying a car; such need is termed as UNSTATED NEEDS.
4. Delight needs: The customer would like the dealer to include a gift with the car such as a GPS Navigation system or Music System to delight him, but he doesn’t clearly express that he wants something with the car. That kind of need is termed as DELIGHT NEEDS.
5. Secret needs: Needs that the customer feels reluctant to admit; for example the customer wants a car for the status symbol so that he can show his friends that he is a savvy consumer (person who can spend his money wisely). But he feels uncomfortable to admit that status is important to him. That kind of need is termed as SECRET NEEDS.

Responding only to the customer’s STATED NEED (“I need a car”) and does not attempt to discover the customer’s REAL NEED (“I need a car with low operating cost”) will not be able to fulfill the customer’s need. That’s why it is said that responding only to the stated need may mislead the customer.

Therefore, as a marketer, you should attempt to discover the REAL NEED of the customer by asking questions to him.

And also fulfilling not only to his REAL NEED, but also the other needs that he has unspoken; UNSTATED NEED, DELIGHT NEED, and SECRET NEED.

In this way, you can develop a better relationship with your customer.

Now, we have finish studying about “Needs”, “Maslow’s Hierarchy of Needs”, and “Five Types of Needs”. Let’s keep on studying how Needs turn to be Wants, and how Wants can change to be Needs in the next topic.

Wants: Specific objects to fulfill our needs

Wants are directed by our surrounding towards reaching certain needs. Therefore human’s wants can be varied depending on each individual’s perception, environment, culture, and society.

For example, an American needs food but he may want a hamburger, fried potato and beer; a Chinese needs food but he may want a bowl of noodle and a cup of hot tea.

With the development of the information technology, a lot of things have turned from the stage of Wants to Needs. For example, Computers, Smart Phones, Internet, etc.

Therefore there come the criticisms that “marketing creates unnecessary needs, wants, and demands.”, “marketers get people to buy things that they don’t want.” , etc.

In reality, marketers do not create needs. Human’s needs exist before the existing of marketers. Marketers might promote some specific objects, and make people want those objects for their needs.

For example, Marketers might promote the idea that an Insurance can satisfy a person’s need for safety; they do not create the need for safety of human being.

After knowing the needs and wants, another most important thing that a marketer must know is DEMANDS. Let’s study about it in the following topic.

DEMANDS: Willingness and ability to buy Wants and Needs

Needs or Wants turn to be Demands when a customer is willing and having the ability to buy that needs or wants.

Many people want a Mercedes, but only a few can buy one. Companies must measure not only how many people want their product, but also how many are willing and have the ability to buy it.

What will be the factors influencing human’s demands? Let’s see it in the next topic.

Factors Influencing Demands – Social & Emotional Factors

There are many factors influencing the demands of human. Those factors can be separated into Social and Emotional factors as in the following:

Social factors: social factors can affect behavior and therefore demand for the different products. Social factors can be generally categorized into three factors as following:

• Social awareness – the increasing in social awareness of our health can risk us from eating junk food, drinking alcohol, smoking cigarettes, etc. affect the demand for those products.
• Social norms – social norms that are acceptable in society can affect the demand of the products. For example, people start getting awareness about the global warming and reducing the usage of plastic bags affect the demand for the plastic bags.
• Social pressures – The pressures influence on people by peers can affect the demand for the products/ services as well. For example, social pressure on every child should be literate can increase the demand of education services.

Emotional factors: Emotional factors of the customers can affect the demand for some products/ services as well. For example, after some major incidents, the demand for insurance can be increased.

As a marketer, apart from knowing the factors influencing demands, you should also know the demand states of your products.

Eight Demand States in Marketing (with Examples)

According to Kotler and Keller, there are eight states of demand in Marketing:

1. Negative Demand

People will have Negative Demand on the products/ services that they dislike and merely don’t want. For example, even though we know that doing regular medical checkup and seeing dentists are beneficial for us, but we don’t want to do it.

Negative demand can be a positive one by creating awareness rather than promotion, and providing the information of your products/ services to the real needed customers.

1. Non-existent Demand

People will have Non-existent Demand or No Demand on the products/ services that they don’t know or uninterested in. The best example of non-existent demand can be new technology products and some education courses.

Non-existent Demand can change to be existent demand by creating awareness and educating your customers. Smart phone was non-existent demand in the past, but now it has become full demand.

1. Latent Demand

The demand which makes customers realize later is called Latent Demand. The best example of latent demand is smart phones.

Companies should try to understand the latent demand of the customers by asking questions and suggestions from the customers.

1. Declining Demand

Products are facing Declining Demand because of changing of technological development, customer’s preference and taste.

In the past, keypad phone was the market leader in the mobile phone industry, however, with the emerging of smart phones; the demand of keypad phone gradually loses its appealing.

Then how can a product that facing declining demand gain demand again? By changing the product’s features, finding new target markets, re-marketing the product, re-branding the product, and re-positioning the product.

1. Irregular Demand

Products/ services which usage are based on time such as seasonal, monthly, weekly, daily, hourly face Irregular Demand. The clear example of irregular demand is umbrella which is mostly use in the rainy days only; in the other seasons, umbrella faces irregular demand.

1. Unwholesome Demand

In Unwholesome Demand, customers want the product badly even though they are aware of the bad effect of it. Cigarettes and alcohol are the best examples of unwholesome demand.

1. Full Demand

Full Demand is created if the products/ services always have the same demand. In full demand, the demand is meeting the supply. For example, medicine always have full demand.

1. Overfull Demand

If the demand is more than the supply, the state of Overfull Demand is created. If the companies face with the overfull demand state, they should try de-marketing by reducing promotion and services temporarily or permanently.

Which demand stage is your products at now? If you know the demand stage of your products, then it will be easier for you to draw the marketing strategies for your products.

Summary

Well, now we have reached the end of the article. You can have a quick review on the whole article by studying the summary of each topic, Needs, Wants, and Demands as in the following:

• Needs: Needs are the essential things to fulfill the states of deprivation for our survival. Needs can be basically divided into Physical Needs, Social Needs, and Individual Needs.
• Wants: A want is a product desired by a customer that is not required for us to survive. So, want is the complete opposite of need, which is essential for our survival.
• Demands: If a customer is willing and able to buy a need or a want, it means that they have a demand for that need or want.

As a marketer, understanding the meaning of Needs, Wants, and Demands is not enough for us. We have to understand how needs are being developed in human’s psychology by studying “Maslow’s Hierarchy of Needs”. And we must know our product is satisfying which level of the human’s needs.

Moreover, we shouldn’t stop at the level of knowing customer’s real stage. We have to ask questions to customer in order to know his real need. And we must fulfill not only to his real need, but also to his other needs: unstated need, delight need and secret need.

In conclusion, what we have to remember in marketing is that knowing Needs and Wants of human is not enough for us. We should always try to measure and estimate the demand for our products as well.