Diploma Thesis

1.1.1Needs, wants and demands

Maslow’s hierarchy of needs identifies 5 major groups of needs: psychological, safety and security, social, esteem and self-actualization, prioritized from low to high, as illustrated on the figure below. It is expected, that a human will first satisfy low-level needs, as psychological, safety and social, before satisfying high-level needs as esteem and self-actualization. (N. Capon, 2007 p. 96)

When a need it is not satisfied, it is usually eliminated. Therefore, a conclusion can be made, that people who have means to satisfy a need will do that, whereas people who don’t have the means will eliminate the need to fit to available resources.

Nevertheless, a choice is a result of complex interaction of cultural, social, personal and psychological factors. Some of the factors can be influenced and this is what a marketer can use to develop and evaluate the product, establish its distribution and sales promotion in a way to gain the strongest response from the target audience.

Figure : "Maslow's Hierarchy of Needs"

“Human wants – the form that a human need takes as shaped by culture and individual personality” (P. Kotler, 2005 p. 8)

To gain sufficient results an organization should constantly ask a question “what makes our customers behave the way they do”? People have a narrow amount of needs but almost an unlimited amount of “wants” they expose. And the specific of “wants” is evolving, under the influence of market expansion and appearance of more and more objects arousing interest. Nevertheless, people have to choose products corresponding to their financial abilities and balance the price – quality (or satisfaction) ratio. This is where a “want” turns into demand.

“Demands – human wants that are backed by buying power” (P. Kotler, 2005 p. 8)

Consumers can rank various consumption possibilities, determining their preferences for getting the best bundle offered for the amount of money they have. (Varian, 2010 p. 34)