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Principles of Marketing

Needs, Wants, and Demands



We all have needs. We need food, clothing, and shelter. We need to be educated. We need to be heard, to be hived, and to be understood.

Take a quick glance at the paragraph above once again. Notice the rapid progression from tangible needs to more intangible, emotional ones. Keep this in mind because as we progress through this course, you will discover themes that will recur again and again. As it turns out, one of these themes (you can consider this as a sneak preview!) is the critical role our emotions play in everything that we buy. You think you are a very rational buyer who rarely makes illogical or impractical purchases? By the end of this book, you may have to rethink that assumption!

This is not to say that we should condemn illogical and impractical purchases (if we did, tens of thousands of companies might suddenly fold up!). Rather, our purpose here is to build in you a level of self-awareness and empathy about how consumers—including you—behave and why we buy what we buy.

It all starts with what we need.

A need is a state of felt deprivation about something that is deemed to be necessary. When you feel hungry, for instance, your body feels deprived of nutrients and therefore triggers a search for solutions.

At the most primal level, we go back once again to the physical needs of food, clothing, and shelter which we literally need to stay alive and fundamentally comfortable. This incidentally includes the need for water. So let us begin our discussion with this basic need for water.

In Metro Manila, the two biggest water utilities (Manila Water and Maynilad) insist that for the majority of households that they service, their tap water is potable. In other words, you can drink the water straight from the faucet.

So how many of us do actually drink straight from the faucet? For low-income households, drinking straight from the tap is something that they would not think twice about. But as household incomes rise, tap water is quickly replaced by alternate options of either bottled water or filtered water. Bottled water can come in the form of either neighborhood-supplied gallon containers or store-bought water. Filtered water, on the other hand, can be had through any number of installed home filtration systems ranging in price from a couple of thousand pesos to over .a hundred thousand pesos!

We all need water, but we have- hundreds of options on how to get it, each with its own pros and cons, and each with its own particular price point.

Now think about this for a moment: Up to the 1980s, the concept of buying drinking water, specifically for households that had reliable tap water service, was practically unthinkable. Most of these Metro Manila households simply took it as a fact of life that water comes from the tap. The only reason you should even consider buying water is if your faucet was not working. Even then, the idea of buying bottled water, at several pesos per bottle, was considered preposterous. Why buy via a bottle if you had relatively cheap running water in your home? If your tap water was of suspicious quality, you boil it and that was that.

The turning point of this cultural mindset toward water happened in the early 1990s when the city came into the grip of a cholera epidemic. News reports of damaged pipes that allowed tap water to mingle with raw sewage led to a sense of paranoia about the water supply. This led to the middle and upper classes migrating toward safer drinking water options that resulted to the rapid growth of bottled water companies and, eventually, home water filtration systems.

We need water. That is a non-negotiable physiological need. But, in particular, we need safe drinking water because we also have a need for safety.

Safety, of course, is an emotional need. The higher your disposable income, the more you will likely be willing to spend to be assured of this feeling of security against the elements. Higher-income households, for example, are willing to pay a premium to live in gated communities that are monitored by security guards. Similarly, if you had disposable income, you would probably pay a premium for a higher-priced water filtration system for your home that can give you peace of mind about the water that you drink. Even if your water service provider insists that tests show your tap water is very safe to drink.

What would a premium price give you? As it turns out, water filtration is a complicated business involving many different parameters and outcomes. There is straight filtration which removes contaminants usually through the use of activated carbon filters. There is also water softening which “softens” water by reducing the amount of calcium and magnesium from the water. On the other hand, there is disinfection which kills bacteria via ultraviolet light. Lastly, there is distilling which promises the purest possible water through a high-energy evaporative process.

All of these processes, of course, lead to the same outcome of “safer” water. But the consumer’s budget could determine how many of these features would be incorporated into the system of choice.

In the mid-2000s, a new health fad emerged: alkaline water. Supporters of alkaline water claimed that the alkalinity in this particular kind of drinking water made it more compatible with the human digestive system, leading to quicker absorption and better health. Sales teams hawked alkaline water filtration systems at prices that were astronomical compared to that of regular water purifiers. As it turned out, those who did buy these alkaline dispensers had not one, not two, but three needs: the physiological, safety, and better health, which was part of something called “self-actualization” or self-development. Because these devices addressed three important needs, the buyers felt that it was worth it.

In 1943, psychologist Abraham Maslow proposed a hierarchy of human needs that eventually and popularly came to be represented as a pyramid, with the most basic needs set at the bottom (Maslow 1943):

Maslow’s Hierarchy of Needs

The premise behind Maslow’s Hierarchy of Needs Theory was that the most basic needs (represented as the lower levels of the pyramid model) must first be met before the individual can feel a strong desire for the higher level needs. Thus, before you can even think about being respected by your peers (love/belonging), for instance, you must first be assured of food, shelter, clothing (physiological) and that nothing untoward happens to you as you go to, from, and around the school (safety).

What does the model say about people who, for instance, go on hunger strikes to protest an idea? The model says that these people have gone way beyond fulfilling their physiological needs for one thing, to the point that they can stifle any hunger pangs through sheer willpower. Safety, love, and esteem are also no longer primary considerations—perhaps because they have covered these long ago—and so they are now single-minded of purpose.

But while Maslow’s hierarchy seems to make a lot of sense, it is now considered a bit outdated especially when human needs are viewed from an evolutionary context. Seen from a more anthropological and sociological perspective, needs are derived more from a complex mix of “subjective pleasure, social status, romance, and lifestyle… [especially] as a product’s mental associations become more important than its actual physical qualities” (Miller 2009). In other words, often our needs and wants are fueled more by what the products signify rather than their actual forms.

So consumers can have a multitude of needs. But what do consumers want? First, let us distinguish between a need and a want.

You need safe water, but you want ultraviolet technology that would kill those pesky bacteria. You need to eat, but you particularly want a double-patty cheeseburger.

Did you spot the difference?

Wants are the specific manifestations of needs. You need comfort, and you crave for (or want) a scoop of creamy gelato and find it there. You need transportation, but in particular you want a classic Mustang convertible. You need a writing instrument for communicating, but you want a Pelikan M640 Polar Lights Special Edition fountain pen.

Admit it, you want a lot of things. It is the net result of a consumerist culture. You want specific brands of clothes, you aspire for particular high-end gadgets, and perhaps you want to travel to a number of exotic destinations. These are all wants because they are specific manifestations of your various needs.

Now, if you want something and you actually have the money to buy it, then this want now becomes a demand. Demands are wants that are backed by purchasing power. Without this purchasing power, a want is simply something on someone’s wish list.

A homemaker may aspire for an expensive home water distillation system. But if the household does not have the budget for it, then they may just settle for a more practical and conventional carbon filtration system or maybe just ordering jugs of filtered water from the neighborhood supplier.

What does this tell us? Often, what the market buys is not a reflection of what they really want, but rather it reflects what they can afford at the moment.

This is quite evident in the sad reality that in many poor households, proper nutrition is compromised when the parents substitute low-cost instant noodle packs for more nutritious fare. Thus, “beef bulalo” flavored instant noodles, for instance, becomes the viand instead of an actual beef bulalo. This allows the parents to stretch their meager budgets, but it comes at the price of their children’s nutrition. They may want the real thing but due to limited finances, they opt for the more “imaginary” fare and this is where their demand goes to.

The next time that you find yourself about to buy something, stop for a moment and review your purchasing process. You have the purchasing power to acquire that something. But what are the needs that propelled you to select this particular item in the first place? What would you really have wanted if you had the budget? What needs would that have satisfied?

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