Needs, Wants and Demands

NEEDS

A human need is a state of felt deprivation. Humans have many complex needs. These include
basic physical needs for food, clothing, warmth and safety; social needs for belonging and
affection; and individual needs for knowledge and self-expression. These needs are not
invented by marketers, they are a basic part of the human make-up.

WANTS

Human wants are the form taken by human needs as they are shaped by culture and individual
personality.

A hungry person in North India may want chapatti and vegetable curry. A hungry person in Hong
Kong may want a bowl of noodles.

Wants are described in terms of objects that will satisfy needs. As a society evolves, the wants of
its members expand. As people are exposed to more objects that arouse their interest and
desire, producers try to provide more want-satisfying products and services

DEMANDS

People have narrow, basic needs (e.g. for food or shelter), but almost unlimited wants. However,
they also have limited resources.

Thus they want to choose products that provide the most satisfaction for their money.

When backed by an ability to pay - that is, buying power - wants become demands. Consumers
view products as bundles of benefits and choose products that give them the best bundle for
their money.

Thus a Honda Civic means basic transportation, low price and fuel economy. A Mercedes means
comfort, luxury and status.

Given their wants and resources, people demand products with the benefits that add up to the
most satisfaction.
2. Products and Services

People satisfy their needs and wants with products. A product is anything that can be offered to
a market to satisfy a need or want.

The concept of product is not limited to physical objects - anything capable of satisfying a need
can be called a product.

In addition to tangible goods, products include services, which are activities or benefits offered
for sale that are essentially intangible and do not result in the ownership of anything.
Examples are banking, airline, hotel and household appliance repair services.

Marketing myopia

Many sellers make the mistake of paying more attention to the physical products they offer than
to the benefits produced by these products. They see themselves as selling a product rather
than providing a solution to a need.

They are so taken with their products that they focus only on existing wants and lose sight of
underlying customer needs. They forget that a physical product is only a tool to solve a
consumer problem.

The term 'marketing myopia' was first expressed by Theodore Levitt. In 'Marketing Myopia,'
Levitt argued that many companies incorrectly take a shortsighted approach to marketing,
viewing it as merely a tool for selling products. Instead, he argued that companies should
look at marketing from the consumer's point of view. For example, a company that sells
sports shoes should not define its marketing in terms of sales of sports shoes, but market
itself as a company concerned with fitness and comfort.

3. Value, Satisfaction and Quality

CUSTOMER VALUE

Consumers make buying choices based on their perceptions of the value that various products
and services deliver. The guiding concept is customer value. Customer value is the difference
between the values the customer gains from owning and using a product and the costs of
obtaining the product.

Benefits= are what customers perceive as gains.

Costs= are what customers perceive as loss

Costs and benefits are not only in terms of money but comfort, time, attention, reputation,
privacy, ease of mind, excitement, entertainment, efforts, etc.
 Customer Value = Total Customer Benefits – Total Customer Costs

For Example, customer value of Dell laptops and computers are high in view of its customers.
Dell products’ quality, efficiency, brand, delivery and after sale service are the benefits for
buyers and definitely it pays more than cost of the product and services.

CUSTOMER SATISFACTION:

Human beings always build some expectation in their mind about person, place, product,
services, etc. The buyer’s expectation about product comes from marketing, word of mouth
or brand reputation.

If the product's performance falls short of the customer's expectations, the buyer is dissatisfied.
If performance matches expectations, the buyer is satisfied. If performance exceeds
expectations, the buyer is delighted.

Outstanding marketing companies go out of their way to keep their customers satisfied. Satisfied
customers make repeat purchases, and they tell others about their good experiences with
the product.

The key is to match customer expectations with company performance. Smart companies aim to
delight customers by promising only what they can deliver, then delivering more than they
promise.

QUALITY

Customer satisfaction is closely linked to quality.

In recent years, many companies have adopted total quality management (TQM) programmes,
designed constantly to improve the quality of their products, services and marketing
processes.

Quality has a direct impact on product performance, and hence on customer satisfaction.

Narrow definition:-'freedom from defects‘

Customer oriented definition:-a company has achieved total quality only when its products or
services meet or exceed customer expectations.

4. Exchange, Transactions and Relationships

Exchange is the act of obtaining a desired object from someone by offering something in return.

Exchange is the core concept of marketing. For an exchange to take place, several conditions
must be satisfied.

⚫ At least two parties must participate

⚫ Each must have something of value to offer the other.

⚫ Each party must also want to deal with the other party

⚫ Each must be free to accept or reject the other's offer.

⚫ Finally, each party must be able to communicate and deliver.

 A transaction is marketing's unit of measurement. A transaction involves at least two things of
value, conditions that are agreed upon, a time of agreement and a place of agreement.

RELATIONSHIP MARKETING:- building long term relationships with the customers and other
stakeholders.

In fact, ultimately, a company wants to build a unique company asset called -marketing network,
A marketing network consists of the company and all of its supporting stakeholders:
customers, employees, suppliers, distributors, retailers, ad agencies, and others with whom
it has built mutually profitable business relationships.

Examples:

⚫ Direct Recruitment – The direct mail marketing firm sends out handwritten birthday
cards to clients and associates every year. This simple, personal touch helps clients
feel like Direct Recruitment cares about them as people rather than simply
consumers.

⚫ American Airlines – The airline maintains a comprehensive frequent flyer program

that rewards customer loyalty with the promise of free flights, upgrades, and
discounts.

⚫ Dell – Dell computers created a special online store for high volume corporate
customers. By tailoring the ordering process to the specific customer's needs, Dell
was able to expedite many of the hassles corporate technology buyers face.
Providing a higher level of service leads to increased loyalty.

5. markets

A market is the set of actual and potential buyers of a product. These buyers share a particular
need or want that can be satisfied through exchange.

The sellers send products, services and communications to the market; in return, they receive
money and information.

Five utilities of marketing

Form Utility:-The utility of form refers to the product that an organization offers to its
consumer base, for example, bread, electronics, vehicles, etc. Form as a type of utility
marketing allows the consumer to see the value of a product when it is in its finished form.

For example, consumers of bread will not see the value of bread if it is presented
as wheat flour. It is because it is being offered as an end product that
 consumers see value in it. Similarly Mobile phones beat landline and laptops
beat desktops because of their form utility.

For example, the form, when applied to a clothing item, can be the shape of the
garment and the range of sizes and the selection of fabric. So the "utility" of
the marketer, is that they assemble various fabrics together into a garment
that you can wear, instead of you gathering all the component parts yourself
and making it yourself

Place Utility:- Proper marketing requires that finished goods be made available at places where
customers can easily and comfortably access them. Place utility is therefore in a way related to a
distribution channel. This means that for consumers to buy products, they have to be physically
available in a store or shop or virtually available online.

⚫ For example:- if a customers wants to buy a pair of shoes, then it must be available
at a nearby retail store or a company outlet as a customer will not come to buy the
shoes at the factory. Thus place utility deals with the convenience of buying the
product at a nearby location.

⚫ Online shopping, banking etc.

⚫ For example, it is no good having a detailed YouTube video of how your low priced
air-conditioner works, if the customer has to drive many miles to find a store with
one actually in stock.

Time Utility:- This kind of utility is related to the difference of time between the creation of a
product and its final consumption by the consumer. Thus it deals with storage, insurance and
financing of goods. Marketing performs all these functions. It requires the marketer to plan
ahead so that right product can be made available at the right time.

⚫ for example – A major success factor for Amazon and other E-commerce players has
been the time factor – The way they deliver ordered material very fast to the
customer. The faster they deliver, the more is the increase in market share.

⚫ Similarly, McDonald’s is a famous fast food chain because you know that you will
have a delicious burger in your hand within a minute of walking into McDonald’s.

This is one of the reasons why (say some fast food experts) that McDonald's fries
are skinnier and smaller than, say, Harvey's, they are designed to cook faster
 so McDonald's can serve customers faster because the McDonald's focus is
on the "Fast" in fastfood

⚫ Domino’s used the utility marketing concept of time to perfection when it promised
delivery of pizza within 30 minutes or the money will be returned.

Possession Utility:-Possession utility is the value customers have while buying a product and they
have the choice to use the product for the purpose it was made for or finding a new way to use
the product. It deals with transfer of ownership title.

The marketing utility that allows the customer to physically access what they bought, it is
referred as "possession". Having a variety of easy payment methods, cash, debit, credit card,
pay-pal, etc. is part of facilitating possession as is the physical location of the product and
how it is delivered to the customer.

⚫ For example, people who are on diet might use honey as a sweetener for beverages,
spread for bread and sandwiches and sometimes as a syrup for pancakes and other
delicacies.

However, some people use honey to create a cough concoction and others who
use it as an ingredient for homemade skin products in particular facial
products combined with other natural ingredients like turmeric and milk.

One of the competitive positions Leon's furniture stores utilize is the incentive that people can
make very low payments to obtain large purchases, and walk out of the store with their
selection immediately - allowing for "possession" in an easy way.

Information Utility:- Information utility is the communication that companies engage in with
customers to trigger buying activity and to manage purchasing processes.

Companies use promotional messages delivered through advertising and public relations to
share company, product or service information. The goal is to attract interested buyers.

Salespeople in a high-priced or complex business environment are also important in answering

customer questions and addressing concerns through the sharing of information.

⚫ Car dealerships, appliances stores and electric stores all commonly rely on sales
associates to share useful information with customers.

MARKETING MANAGEMENT PHILOSOPHIES

1. The Production Concept

 The philosophy that consumers will favour products that are available and highly affordable, and that
management should therefore focus on improving production and distribution efficiency.

Managers focusing on this concept concentrate on achieving high production efficiency, low costs, and
mass distribution.

The production concept advocates that more the products or production, more would be the sales. In
countries where labor is cheap and easily available, the production can be maximized while
minimizing the costs, hence increasing the production efficiency.

For example:-

⚫ India and China are great examples of the Production Concept of marketing. China made sure
that it increases its overall production through manual labor available by mass producing and
distributing products across the world. Today China is one of the biggest exporter of its
manufactured product across the globe. What China did in manufacturing, India did with
information technology services by mass producing talent for IT. Today India is one of the
biggest exporter of IT services.

2.The product concept

Consumers will favour products that offer the most quality, performance and innovative features, and that
an organization should thus devote energy to making continuous product improvements. Eg:-
mousetrap

Using Product concept, a company can give identity to the product and can add functional value and
usability so that the intended customers can derive this benefit and eventually buy the product in the
market.

For example:-

⚫ Apple is one company which works highly on product concept to get the best products to
their consumers. Apple's products are perceived to be very high quality with innovative
features and great performance. Customers go after the products of Apple and that creates a
marketing pull.

⚫ Suppose a company makes the best quality Floppy disk. But a customer does really need a
floppy disk? She or he needs something that can be used to store the data. It can be achieved
by a USB Flash drive, SD memory cards, portable hard disks, and etc. So that company should
not look to make the best floppy disk. They should focus to meet the customer’s data storage
needs.

3. The Selling Concept

Consumers will not buy enough of the organization's products unless it undertakes a large-scale selling and
promotion effort. The concept is typically practiced with unsought goods - those that buyers do not
normally think of buying, such as encyclopedias and funeral plots.

These industries must be good at tracking down prospects and convincing them of product benefits.

Especially in non profit area:- eg- candidate of a political party

4. The Marketing Concept

The marketing concept holds that achieving organizational goals depends on determining the needs and
wants of target markets and delivering the desired satisfactions more effectively and efficiently than
competitors do.
 Here marketing management takes a “customer first” approach.

Under the marketing concept, customer focus and value are the routes to achieve sales and profits.

Dell customizes its products according to the needs of its customers and gains competitive advantage.

Selling concept vs marketing concept

The selling concept and the marketing concept are frequently confused. The marketing concept and the
selling concepts are two extreme concepts and totally different from each other.

The selling concept takes an inside-out perspective. It starts with the factory, focuses on the company's
existing products and calls for heavy selling and promotion to obtain profitable sales. It focuses on
customer conquest - getting short-term sales with little concern about who buys or why.

In contrast, the marketing concept takes an outside-in perspective. It starts with a well-defined market,
focuses on customer needs, co-ordinates all the marketing activities affecting customers and makes
profits by creating long-term customer relationships based on customer value and satisfaction.

Under the marketing concept, companies produce what consumers want, thereby satisfying consumers
and making profits.

5. Societal Marketing concept

The societal marketing concept questions whether the pure marketing concept is adequate in an age of
environmental problems, resource shortages, worldwide economic problems and neglected social
services. It asks if the firm that senses, serves and satisfies individual wants is always doing what's best
for consumers and society in the long run.

The societal marketing concept holds that the organization's task is to determine the needs, wants, and
interests of a target market and to deliver the desired satisfactions more effectively and efficiently
than competitors in a way that preserves or enhances the well being of both the individual consumer
and society in general.

It is closely linked with the principles of corporate social responsibility and of sustainable development.

Some more examples of social responsibility marketing

The Body Shop: The Body Shop International plc is the original, natural and ethical beauty brand. The
company uses only plant based materials for its products. It is against Animal testing, supports
community trade, activate Self Esteem, Defend Human Rights, and overall protection of the planet.
They have also their own charity, The Body Shop Foundation, to assist those working to achieve
progress in the areas of human and civil rights, environmental and animal protection. Thus Body shop
is really following the concept of Societal Marketing.

AVON Product inc. has started an initiative known as Avon breast cancer awareness crusade in 1993 in
partnership with National Alliance of breast cancer Foundation (NABCO).They started selling pink
 ribbon pins which depicts the international symbol for breast cancer for$2 and donates $1 to NABCO.
Through the crusade Avon sale representatives have raised billion of dollars for breast cancer
education and access to early detection services for underserved woman. In addition, Avon's 45,000
US sales people have been trained to discuss breast cancer and importance of early detection with
their customers and distributed 80 million flyers on breast cancer detection.

Consumer Behaviour

Consumer behaviour is the study of how individual customers, groups or organizations select, buy, use,
and dispose ideas, goods, and services to satisfy their needs and wants. It refers to the actions of
the consumers in the marketplace and the underlying motives for those actions.

Marketers expect that by understanding what causes the consumers to buy particular goods and
services, they will be able to determine—which products are needed in the marketplace, which are
obsolete, and how best to present the goods to the consumers.

The study of consumer behaviour assumes that the consumers are actors in the marketplace. The
perspective of role theory assumes that consumers play various roles in the marketplace. Starting
from the information provider, from the user to the payer and to the disposer, consumers play these
roles in the decision process.

The roles also vary in different consumption situations; for example, a mother plays the role of an
influencer in a child’s purchase process, whereas she plays the role of a disposer for the products
consumed by the family.

Nature of Consumer Behaviour

1. Influenced by various factors

2. Undergoes a constant change

3. Varies from consumer to consumer

4. Varies from region to region and country to county

5. Information on consumer behaviour is important to the marketers

6. Leads to purchase decision

7. Varies from product to product

8. Improves standard of living

9. Reflects status