Using suitable examples, briefly compare and contrast the concepts of needs, wants, and demands. Discuss how these concepts relate to the marketing practices.
Needs wants and demands are a part of basic marketing principles. Though they are 3 simple worlds, they hold a very complex meaning behind them along with a huge differentiation factor. In fact, A product can be differentiated on the basis of whether it satisfies a customers needs, wants or demands.
Each of them is discussed in detail in this article.
Needs -Human needs are the basic requirements and include food clothing and shelter. Without these humans cannot survive. An extended part of needs today has become education and healthcare. Generally, the products which fall under the needs category of products do not require a push. Instead the customer buys it themselves. But in today's tough and competitive world, so many brands have come up with the same offering satisfying the needs of the customer, that even the "needs category product" has to be pushed in the customers mind.
Example of needs category products / sectors - Agriculture sector, Real Estate (land always appreciates), FMCG, etc. Wants - Wants are a step ahead of needs and are largely dependent on the needs of humans themselves. For example, you need to take a bath. But i am sure you take baths with the best soaps. Thus Wants are not mandatory part of life. You DON'T need a good smelling soap. But you will definitely use it because it is your want. In the above image, the baby needs milk but it WANTS candy :)
Example of wants category products / sectors - Hospitality industry, Electronics, Consumer Durables etc, FMCG, etc.
Demands - You might want a BMW or a Mercedes for a car. You might want to go for a cruise. But can you actually buy a BMW or go on a cruise? You can provided you have the ability to buy a BMW or go on a cruise. Thus a step ahead of wants is demands. When an individual wants something which is premium, but he also has the ability to buy it, then these wants are converted to demands. The basic difference between wants and demands is desire. A customer may desire something but he may not be able to fulfill his desire.
Example of demands - Cruises, BMW's, 5 star hotels etc.
The needs wants and demands are a very important component of marketing because they help the marketer decide the products which he needs to offer in the market. Thus the flow is like this.