And how I learnt the difference the hard way

From a marketing point of view, there’s a very important distinction to be made between needs, wants and demands.

Needs

According to Maslow’s Hierarchy of Needs, human beings ‘need’ a huge variety of things: the air we breathe, the water we drink and the shelters most of us are lucky enough to live in. Not all of the things we need are tangible, Maslow points out that we also need to feel the wind in our hair as we run free through the fields and the warm fuzzy feeling of recognition we get when our crush ‘likes’ our latest Instagram selfie.

Needs come in a variety of different flavours. Marketing god, Philip Kotler describes them in his book Marketing Management:

  1. Stated (the characteristics of the product or service the customer thinks they need)
  2. Real (the characteristics of the need they actually want, the value they’re going to receive from the product or service)
  3. Unstated (standard expected characteristics of the product or service)
  4. Delight (unexpected positive characteristics of the product or service)
  5. Secret (the needs the customer doesn’t express, usually because they’re intangible)

What this suggests is that customers don’t always know how to describe what they need and look to companies (and marketers) to interpret their behaviours and provide it for them. Famously, the inventor of the motor car, Henry Ford, is said to have quipped, “If I had asked people what they wanted, they would have said faster horses.”

Although it has been disputed he ever actually said this, the quote is a useful example of the difference between Stated needs and Real needs. Their Real need was a form of transportation to get from point A to point B reliably and efficiently.

Wants

With all of these needs, it’s natural that in a market-orientated, capitalist society, companies will form to create products and services to fulfil them. It’s the role of the marketer to identify customer needs, interpret them and create products or services that deliver value to fulfil those needs. When they do this effectively, customer’s needs become wants for a company’s particular product or service.

I’m hungry, I need food and at any given moment I have thousands of different options to fulfil this particular need. But I want a Hardee’s Mushroom Swiss burger since my perception is that, right now, this particular product is going to fulfil my need.

Demands

So I head off to Hardees and take the cash out of my wallet to pay for it. When we feel a need, we know what we want, and we have the resources to obtain it, that’s demand.

When companies create a product which they assume will deliver value to a customer but sales are lower than expected, we can call this unmet demand.

My experience

At this point I can tell you a story about my own (expensive) first-hand experience understanding the difference between needs, wants and demands.

It was early 2010, I was working for a small branding agency and I’d been set an internal brief to design a poster to bring attention to the local natural environment. I toiled over the brief for a couple of evenings and, inspired by my one-year-old daughter’s love of visiting the local aquarium, came back with a poster called ‘Learn your A-B-Sea’. It was a kid’s ABC chart featuring illustrations of the various different animals you’d find in our local ocean, the Arabian Gulf.

I was pretty proud of myself. I posted the poster up on the  blog I had at the time and tweeted it out to Hoefler and Frere Jones (H&FJ), a typography company who’d designed the font I’d used. A few days later I woke up to an inbox full of emails and a huge spike in visits to my website. H&FJ had retweeted my message and it had been picked up by Jason Kottke and featured on his hugely successful blog, kottke.org.

“Where can we buy it?”, “I want one!”, “Love this! So cute!!”… the comments and emails were flooding in and I figured that 1,000+ likes and comments equalled at least 1,000 immediate sales of the poster, right?

Seeing my opportunity to make the money to buy a Greek island and retire early, in less than a week I’d got in touch with a local printer, built an e-commerce page onto my website and the posters were rolling off the press.

Printing, plus packaging, plus mailing, plus a donation to an ocean charity, equalled… no one willing to pay for them. After six months I’d sold around 100 posters and decided to give away the digital artwork free to anyone that wanted to download it and print it for themself.

Clearly, I’d failed to see the difference between appreciation, need, want and demand. One thousand people had appreciated the poster enough to engage with it on the blog. Of those, perhaps 200 had a young child and were looking for an ABC chart for their nursery (the need), and, of those, maybe 150 liked my poster enough to want it. And of those, just 100 had the means to pay the price to own one, and that’s demand.

In summary

Needs are basic human requirements (including the need for things like recreation, education and entertainment). Those needs become wants when they’re directed towards a specific object. And wants become demand when a customer has the ability and resources (often money) to fulfil them.

My daughter has just turned 12. She still has my poster hanging in her bedroom. She knows her ABCs very well and I took her scuba diving in the Arabian Gulf for the first time last Summer, she loved it.