1.5 Determining Consumer Needs and Wants
3 min read•june 24, 2024
Consumer needs and wants drive purchasing decisions. From functional to emotional, these needs shape how people choose products. Understanding them helps marketers create compelling that highlight key benefits and differentiate offerings from competitors.
The is at the heart of marketing, creating value for both buyers and sellers. By satisfying customer needs and wants, businesses can foster loyalty and positive word-of-mouth. Analyzing helps companies tailor their strategies to target specific market segments effectively.
Understanding Consumer Needs and Wants
Five types of customer needs
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- drive purchasing decisions based on a product's performance, utility, and ability to solve problems or fulfill specific purposes (vacuum cleaner's suction power)
- influence purchases that help consumers gain social acceptance, belonging, and status by fitting in with desired groups or conveying a certain image (luxury clothing brands)
- lead to buying decisions based on the positive feelings, experiences, or emotional satisfaction derived from a product (scented candles for relaxation)
- encourage consumers to try new products or seek information to satisfy curiosity, desire for knowledge, novelty, or variety (trying a new exotic fruit)
- arise under specific circumstances or situations and influence purchases based on the context or environment (buying an umbrella during a rainstorm)
- These needs are often organized in a , with basic needs at the bottom and more complex needs at the top
Value propositions in marketing
- Value propositions are concise, clear statements that communicate the key benefits a product offers to customers and differentiate it from competitors (Apple's "Think Different" slogan)
- Effective value propositions highlight unique features or advantages, demonstrate how the product solves customer problems or meets needs better than alternatives (Slack's "Be less busy" tagline emphasizing productivity)
- Marketers use value propositions in various materials such as advertisements, product packaging, website copy, and sales presentations to persuade customers to choose their product over others (Coca-Cola's "Open Happiness" campaign)
- Value propositions often target specific market segments based on , which include lifestyle, values, and personality traits
Exchange process and value creation
- The exchange process involves the trade of something of value between a buyer and seller, creating mutual benefits (money exchanged for goods or services)
- For an exchange to occur, both parties must:
- Have something of value to offer
- Be willing and able to engage in the exchange
- Believe they will benefit from the exchange
- The exchange process creates value for buyers by providing products that satisfy needs or wants and offering convenience (online shopping delivering items to your doorstep)
- Sellers benefit from the exchange process through revenue generation and the ability to continue producing and offering products to the market (profitable sales enabling business growth)
- Successful exchanges result in , loyalty, repeat purchases, and positive word-of-mouth for the seller (a delighted customer becoming a brand advocate)
Understanding Consumer Behavior and Decision-Making
- Consumer behavior encompasses the actions, thoughts, and feelings of individuals as they make purchasing decisions
- helps businesses identify and target specific groups of consumers with similar needs and characteristics
- Creating a , a fictional representation of the ideal customer, aids in understanding target audience preferences and behaviors
- The maps out the various touchpoints and experiences a consumer has with a brand before, during, and after a purchase
- The involves several stages, including problem recognition, information search, evaluation of alternatives, purchase decision, and post-purchase behavior
Key Terms to Review (15)
Buyer Persona: A buyer persona is a semi-fictional representation of a company's ideal customer based on market research and real data about existing customers. It helps businesses better understand their target audience, their needs, behaviors, and pain points to create more effective marketing strategies and product development.
Conditional Needs: Conditional needs are consumer needs that are dependent on specific situations or circumstances. These needs arise when certain conditions or events trigger a desire for a particular product or service, rather than being a constant or ongoing requirement.
Consumer Behavior: Consumer behavior refers to the study of how individuals, groups, and organizations select, purchase, use, and dispose of goods, services, ideas, or experiences to satisfy their needs and desires. It encompasses the factors that influence the decision-making process, from the initial recognition of a need to the post-purchase evaluation of a product or service.
Customer Journey: The customer journey refers to the complete experience a customer has with a company or brand, from initial awareness and interest, through the purchase process, and ongoing engagement and loyalty. It encompasses all the touchpoints and interactions a customer has across various channels and stages of the buying cycle.
Customer Satisfaction: Customer satisfaction refers to the degree to which a customer's expectations of a product or service are met or exceeded, resulting in a positive emotional response and a sense of fulfillment. It is a critical measure of a company's success and a key driver of customer loyalty, repeat business, and positive word-of-mouth.
Emotional Needs: Emotional needs are the psychological requirements that must be met for an individual to feel content, fulfilled, and satisfied. These needs are essential for maintaining overall well-being and can significantly influence consumer behavior and decision-making.
Epistemic Needs: Epistemic needs refer to an individual's innate desire to acquire knowledge, understand the world, and make sense of their experiences. These needs drive people to seek information, explore new ideas, and engage in learning activities to expand their understanding of the environment and their place within it.
Exchange Process: The exchange process refers to the core mechanism of marketing, where value is exchanged between two or more parties. It involves the voluntary interaction and transfer of something of value, such as goods, services, or information, in order to satisfy the needs and wants of the involved individuals or organizations.
Functional Needs: Functional needs refer to the essential requirements or basic necessities that consumers seek to fulfill through the purchase and use of products or services. These needs are practical, utilitarian, and directly related to the primary purpose or function of the product, rather than emotional or social factors.
Market Segmentation: Market segmentation is the process of dividing a broad consumer or business market into subsets of consumers or businesses that have, or are perceived to have, common needs, interests, and priorities. Marketers can then design and implement strategies to target these specific segments with offerings that match their unique needs and characteristics.
Need Hierarchy: The need hierarchy is a theory developed by psychologist Abraham Maslow that describes the different levels of human needs, ranging from basic physiological requirements to higher-level psychological and self-fulfillment needs. This concept is crucial in understanding consumer behavior and determining how to best meet the diverse needs and wants of consumers.
Psychographics: Psychographics is the study of consumers' attitudes, interests, opinions, values, and lifestyles, which can provide valuable insights into their buying behavior and decision-making processes. This concept is closely tied to understanding consumer needs, wants, and the factors that influence their purchasing decisions.
Purchase Decision Process: The purchase decision process refers to the steps consumers go through when deciding to make a purchase. It involves a series of cognitive and emotional stages that guide the consumer's decision-making and lead to a final purchasing behavior.
Social Needs: Social needs refer to the fundamental human requirement for interpersonal connections, belonging, and social interaction. These needs drive individuals to seek out and maintain meaningful relationships with others, which is crucial for their overall well-being and personal development.
Value Propositions: A value proposition is a clear, concise statement that outlines the unique benefits a product or service offers to customers. It communicates the primary reasons why a customer should choose a particular offering over competitors, focusing on the value and solutions it provides to meet their specific needs and wants.