Marketing exists in order to add value to satisfy customers’ changing needs and wants.
Marketing Managers of business organizations need to understand what their current and potentials customers need and want. Sometimes, they will need to predict those needs and wants based on limited data. Or, even blindly guess what certain customers require. Then, it is time to come up with an idea for a product – a good or service – that will satisfy those needs and wants. By offering people the right product at the right price sold in the right place, it will lead to satisfying customer requirements.
In general, satisfying customer needs and wants should be done profitably, so the business can prosper in the long run.
Fulfilling changing human needs and wants
In principle, people have the same needs, but different wants. Here are the very basic differences between human needs and human wants.
Needs
Needs are the essential necessities that all people must have in order to survive. Human needs include food, water, shelter and warmth. Basic goods fulfill physical needs which are essential for staying alive. In addition to physiological needs, people also have individual needs: safety needs, emotional needs, self-esteem needs, intellectual needs, beauty needs and self-actualization needs.
Wants
Wants are not necessary to stay alive on this Earth. It is because wants are human desires – goods or services which people would like to have in order to have nicer life, But, these products are not essential for our survival as biological organisms. Wants may include a big house on suburbs with a beautiful garden, a faster sports car, a new cooler smartphone, an overseas holiday to the Caribbean, etc.
While different people have different wants, human needs are exactly the same for every and each of us. People’s needs are limited to just a few items. Regardless of personal wealth, job title or social status, human beings have finite needs. On another hand, wants are unlimited. No matter how much money you spend to buy products to fulfill all of your wants today, you will certainly have new wants tomorrow.
Some Marketing Managers try to use deceptive advertising techniques to confuse needs with wants. It makes customers think that their wants are actually their needs. Personally, I do not recommend doing so as it may be viewed as unethical actions, hence leading to loss of customers in the future.
By adding value for customer satisfaction
As human wants change over time due to factors such as age, income level or social status, businesses need to respond appropriately to those changes in order to survive and grow in the long-term.
Marketing Managers must identify the needs and those constantly changing wants of its customers to make them satisfied – to add value to customers’ lives.
Businesses add value by taking raw materials and turning them into goods and services which they can later sell to customers at a price greater than the cost of the raw materials used in their production. Businesses will try to add value at every stage of the production process – from extracting raw materials through turning raw materials into finished goods until selling the finished goods to customers.
Mathematically, added value is the difference between the cost of purchasing bought-in materials and the price of the finished goods are sold for. All businesses aim to create value by selling goods and services for a much higher price than the cost of raw materials.
Added value = Price – Cost of raw materials
If a customer is prepared to pay a price that is greater than the cost of materials used in making a good or providing service, then the business has been successful in adding value.
Value is not the same as price
Customer satisfaction is not always obtained with very expensive products. It is because value is not the same as price. Value is not about the money, but about what you get for that amount of money comparing with your expectations.
Two examples will help to support these points:
- Cheap goods are also valuable. A very hungry customer who is rich will be satisfied with cheaper meal from a street-food stall. It is because the customer is just expecting to kill his hunger with any sort of food to minimize discomfort.
- Expensive goods not always provide consumer satisfaction. A very expensive product with only one basic function will leave customers dissatisfied. It is because customers were expecting to receive much more for paying such high price. Instead of being satisfied they will be disappointed because the product was too expensive for the functions that it offers.
❗Therefore, to maintain good relationships with customers, businesses should offer good value for money for maximum satisfaction at all times. A consumer usually considers a product to be of good value, if it provides satisfaction at a reasonable price.
Summarizing, Marketing exists to address people’s limited needs and unlimited wants. It tries to find out the reasons behind people’s decisions to purchase certain products and then make customers to buy those products. By meeting the needs and wants of customers through adding value, the business will most likely make a profit.
