Needs, Wants and Demand
Needs are basic physical and mental conditions of a human that need to be satisfied using a product or a services. In other hand wants can be defined as ways in which the needs are satisfied. As an example, the hunger is the need which is a basic physical condition of a human which has to be satisfied using a want such as rice, bread or buns.
The difference between needs and wants can be analyzed as follows:
- Needs are generally limited where as the wants are unlimited. As an example need of hunger is limited where as the wants (bread, buns, rice, burger, submarines, fruits, vegetables, chocolates, cup cake, ice creams and so on.) to satisfy the need of hunger is unlimited.
- Needs are common to all where as wants varies from person to person. The need of hunger is common to everybody but the wants to satisfy hunger will be different from person to person. One may prefer to have rice where are another person may prefer bread.
- Needs are generated by natural feelings of a person where as wants are generated by natural desires of people. As an example, the need for hunger is a physical condition generated naturally by the human body where as the wants for food such as cake, ice cream, rice and bread are driven by the mental desires such as mood, values, attitudes and so on.
- Needs are not complex and can not be altered by marketers. On the other hand wants are complex and can be altered and motivated by marketing efforts. The need for hunger is basic and markets have no say in it. But want of ice cream or a cup cake can be altered, persuaded by marketers with marketing stimuli such as advertising.
Demand is where the want is backed by purchasing power and willingness to purchase.Demand can be represented in a equation.
Demand = Want + Willingness to Purchase + Purchasing Ability
As an example many people would wish to buy a BMW car which is a want to satisfy the need of transportation. But only few can afford to buy BMW cars and since the purchasing power is not present it does not count as demand for BMW cars,