ENTREPRENEAURSHIP

Assignment 4

Submitted to:
Prof. Mazhar Hayat

Submitted by:
Muhammad Arslan Wajid (0080)
ADCS 3B
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Contents
needs want demand ......................................................................................................................... 2
Needs............................................................................................................................................... 2
Wants .............................................................................................................................................. 2
Demands ......................................................................................................................................... 2
stp model ......................................................................................................................................... 4
Segment Your Market ................................................................................................................. 4
Demographic ........................................................................................................................... 4
Geographic .............................................................................................................................. 4
Psychographic ......................................................................................................................... 4
Behavioral ............................................................................................................................... 4
Example .................................................................................................................................. 4
Target Your Best Customers ....................................................................................................... 5
Example .................................................................................................................................. 5
Position Your Offering ............................................................................................................... 5
Example .................................................................................................................................. 6
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NEEDS WANT DEMAND

Needs, wants and demands are a basic part of the marketing principles. On the surface, these three
words look like simple, easy to answer concepts.

Though, it’s a primary method to answer the timeless question “what do customers want?”.

Needs, wants and demands play a vital role in terms of marketing management. It becomes easier
to deal with monotonous problems, related to marketing.

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 DONT need a good smelling soap. But you will definitely use
it because it is you 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.

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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.

Market >> Identify needs wants and demands >> Offer products to satisfy either needs wants or
demands.
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STP MODEL
The STP Model consists of three steps that help you analyze your offering and the way you
communicate its benefits and value to specific groups.

STP stands for:

 S for Segment your market.

 T for Target your best customers.
 P for Position your offering.

This model is useful because it helps you identify your most valuable types of customer, and then
develop products and marketing messages that ideally suit them. This allows you to engage with
each group better, personalize your messages, and sell much more of your product.

SEGMENT YOUR MARKET

Your organization, product or brand can't be all things to all people. This is why you need to
use market segmentation to divide your customers into groups of people with common
characteristics and needs. This allows you to tailor your approach to meet each group's needs cost-
effectively, and this gives you a huge advantage over competitors who use a "one size fits all"
approach.

There are many different ways to segment your target markets. For example, you can use the
following approaches:

Demographic – By personal attributes such as age, marital status, gender, ethnicity, sexuality,
education, or occupation.

Geographic – By country, region, state, city, or neighborhood.

Psychographic – By personality, risk aversion, values, or lifestyle.

Behavioral – By how people use the product, how loyal they are, or the benefits that they are
looking for.

Example
The Adventure Travel Company is an online travel agency that organizes worldwide adventure
vacations. It has split its customers into three segments, because it's too costly to create different
packages for more groups than this.

Segment A is made up of young married couples, who are primarily interested in affordable, eco-
friendly vacations in exotic locations. Segment B consists of middle-class families, who want safe,
family-friendly vacation packages that make it easy and fun to travel with children. Segment C
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comprises upscale retirees, who are looking for stylish and luxurious vacations in well-known
locations such as Paris and Rome.

TARGET YOUR BEST CUSTOMERS

Next, you decide which segments to target by finding the most attractive ones. There are several
factors to consider here.

First, look at the profitability of each segment. Which customer groups contribute most to your
bottom line?

Next, analyze the size and potential growth of each customer group. Is it large enough to be worth
addressing? Is steady growth possible? And how does it compare with the other segments? (Make
sure that you won't be reducing revenue by shifting your focus to a niche market that's too small.)

Last, think carefully about how well your organization can service this market. For example, are
there any legal, technological or social barriers that could have an impact? Conduct a PEST
Analysis to understand the opportunities and threats that might affect each segment.

Example
The Adventure Travel Company analyzes the profits, revenue and market size of each of its
segments. Segment A has profits of $8,220,000, Segment B has profits of $4,360,000, and
Segment C has profits of $3,430,000. So, it decides to focus on Segment A, after confirming that
the segment size is big enough (it's estimated to be worth $220,000,000/year.)

POSITION YOUR OFFERING

In this last step, your goal is to identify how you want to position your product to target the most
valuable customer segments. Then, you can select the marketing mix that will be most effective
for each of them.

First, consider why customers should purchase your product rather than those of your competitors.
Do this by identifying your unique selling proposition , and draw a positioning map to understand
how each segment perceives your product, brand or service. This will help you determine how best
to position your offering.

Next, look at the wants and needs of each segment, or the problem that your product solves for
these people. Create a value proposition that clearly explains how your offering will meet this
requirement better than any of your competitors' products, and then develop a marketing campaign
that presents this value proposition in a way that your audience will appreciate.
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Example
The Adventure Travel Company markets itself as the "best eco-vacation service for young married
couples" (Segment A).

It hosts a competition on Instagram and Pinterest to reach its desired market, because these are the
channels that these people favor. It asks customers to send in interesting pictures of past eco-
vacations, and the best one wins an all-inclusive trip.

The campaign goes viral and thousands of people send in their photos, which helps build the
Adventure Travel Company mailing list. The company then creates a monthly e-newsletter full of
eco-vacation destination profiles.
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