Understanding Needs, Wants and Demands in Marketing world

Needs, wants and demands are 3 important terms in marketing. No matter how similar they
might seem, there are more differences in these terms that you might think. There are many
layers within them and they play a vital role in arriving at segmenting the TG, targeting a
particular target group and most importantly defining a sharp positioning for a brand.
Needs
“Needs” is the basic human requirements like shelter, clothes, food, water, etc. which are
essential for human beings to survive. If we extend this further, other needs are education,
healthcare or even a social thing, for example, belonging to a certain society or self-
expression. One can say that the products which fall under the needs category of products
do not require a push. Instead the customer buys it themselves. But it’s actually not true. in
today’s world with thousands of brands competing in the same categories with identical
offerings satisfying the same needs, even the “needs category product” has to be pushed in
the consumers’ mind. Example of needs category products / sectors – Agriculture sector,
Real Estate, Healthcare etc.
We all know about Maslow’s hierarchy of needs which categorizes needs into 5 levels
starting from physiological needs at the bottom and going up to self-actualization needs. But
what’s important as a marketer to know which level of need is your brand targeted to. Let’s
look at some of the examples of brands which are targeting different levels of needs
1. Physiological Needs – Food companies (Nestle, Pepsi, Coca Cola)
2. Safety Needs – Insurance companies (ICICI Prudential, Tata AIG, HDFC Life)
3. Social Needs – Social networking sites (Facebook, Twitter, Instagram)
4. Esteem Needs – Luxury brands (iPhone, Mercedes, Estee Lauder)
5. Self-actualization needs – Non-Profit organizations and NGOs (UNICEF, Teach for
India)
In marketing, there is another way to categorize needs. There are basically five types of
consumers’ needs:
1. Stated Needs – As the name suggests, in this case, the consumer explicitly states what
he wants. For eg. “I need a phone”.
 2. Real needs – This is more specific. So when the consumer wants a phone to remain
connected to his friends, family and colleagues, the actual need be a phone with high
battery backup and not high camera resolution.
3. Unstated needs – The consumer also expects warranty and other sorts of after sales
service when buying a phone which he might not say explicitly.
4. Delight needs – The consumer would like the phone manufacturer or the dealer to
give him some free gift or a promotional item (phone case, tempered glass, free SIM
etc.), but he doesn’t clearly express that he wants something with the phone.
5. Secret Needs – These are the needs which the consumer feels reluctant to admit; for
example the consumer wants the phone for his status symbol but he feels
uncomfortable to admit that status is important to him.
In the above example, responding to only stated need ie., “I need a phone” doesn’t help in
arriving at a right product proposition. As a marketer, it is important to dig deeper and
uncover not only the real, but also his other needs: unstated need, delight need and secret
needs.
Wants
"Wants" are a step ahead of needs Wants aren’t essential for humans to survive, but it’s
associated with needsSimply put, A want is a product desired by a customer that
is not required for us to survive. So, want is the complete opposite of need, which is essential
for our survival. Wants aren’t permanent and it regularly changes. As time passes, people
and location change, wants change accordingly.
Wants are directed by our surrounding towards reaching certain needs. Therefore, human’s
wants can be varied depending on each individual’s perception, environment, culture, and
society. For example, an Indian needs food but he may want a Dosa or Paratha while an
American may want Burger or Sandwich. Example of wants category products / sectors –
Hospitality industry, Electronics, FMCG, Consumer Durables etc.
Demands
Wants turn to be Demands when a customer is willing and having the ability to buy that
needs or wants. The basic difference between wants and demands is desire. A customer
may desire something but he may not be able to fulfill his desire. Consequently, for people,
who can afford a desirable product are transforming their wants into demands. In other
words, if a customer is willing and able to buy a need or a want, it means that they have a
demand for that need or a want. You might want a BMW for a car or an iPhone for a phone.
But can you actually buy a BMW or an Iphone? You can, provided you have the ability to buy
them. Example of demands –Luxury cars, 5 star hotels etc.
Many people want a BMW, but only a few can buy one. So, it’s very crucial that one must
measure not only how many people want their product, but also how many are willing and
have the ability to buy it.
So, its not only important to discover different consumer needs, but also to figure out what
consumer actually wants and how much is he able to pay ie. how much demand can be
created for the product or service.
Lastly, let’s try to answer “Can marketing create a need?”. I believe that marketers do not
create needs. They might promote some specific products or services, and make people want
those products or services for their needs. For example, Marketers might promote the idea
that an Insurance can satisfy a person’s need for safety; they do not create the need for
safety.
What Is Customer Value? (& How Your Business Can Generate It)
What Is Customer Value?
Customer value measures a product or service's worth and compares it to its possible
alternatives. This determines whether the customer feels like they received enough value for
the price they paid for the product/service.
We can look at customer value as insight into buyer's remorse. If customers feel like the total
cost of an item outweighs its benefits, they're going to regret their purchase. Especially if
there's a competitor who's making a better offer than yours for a similar product or service.
Understanding customer value and how to calculate it can help your business price products
fairly and reduce friction within the customer experience.
Customer Value Added
For some businesses, customer value boils down to dollars and cents. However, it's
important to remember that customers give more to your company than just what's listed
on the price tag. There are also time costs, energy costs, and emotional costs that customers
weigh when making a buying decision.
Similarly, there are different types of benefits that influence customer decisions. Some
examples include tangible benefits — like how the product will help them achieve goals —
as well as image benefits — like how owning this product or service will change one's social
status in the eyes of their peers and colleagues.
To measure customer value, we first need to recognize these different types of costs and
benefits. The graphic below can help by summarizing the factors you should be addressing
when calculating customer value.
Differentiate between creativity and innovation?
Creativity Innovation
Creativity is a act of creating new Innovation is the introduction of
ideas, imaginations and possibilities. something new and effective into the
market.
Imaginative process Productive process
Creativity can never be measured Innovation can be measured
Creativity is related to the generation Innovation is related to introduce
of ideas which are new and unique something better into the market
Creativity does not require money innovation requires money

Concept Description
Creativity ability to develop something original, particularly an idea or a
representation of an idea, with an element of aesthetic flair
Innovation change that adds value to an existing product or service
Invention truly novel product, service, or process that, though based on ideas and
products that have come before, represents a leap, a creation truly novel
and different

What is innovation?
Hunter weighs in with his own definition of this also: "Innovation is the implementation or
creation of something new that has realized value to others." Innovation is realized most
vividly in the form of a tool, physical benefit, or aid that solves a problem or creates an
advantage. These tools are not limited to humans – for example, according to the Science
Times, birds and monkeys use sticks to pull food out of tight locations. So, innovation is far
more possible for different species under different conditions and environments.

What is Innovation?
• Innovation generally refers to changing processes or creating more effective processes,
products and ideas.

• Being innovative does not only mean inventing. Innovation can mean changing your
business model and adapting to changes in your environment to deliver better products or
services.
• Successful innovation should be an in-built part of your business strategy, where you create
a culture of innovation and lead the way in innovative thinking and creative problem solving.

• Innovation can increase the likelihood of your business succeeding. Businesses that
innovate create more efficient work processes and have better productivity and
performance.

Types of innovation
Doblin, a global innovation firm that helps leading organizations find human-centered
solutions to business problems, created the Ten Types of Innovation Framework as a way to
identify transformational opportunities, specifically in business. Based on research of over
2000 successful innovations, Doblin outlined three broad categories: business model,
product and marketing.
Business model: Internally focused, these configuration innovations analyze how an
organization operates and creates revenue. These can be higher-risk as they sometimes
change fundamental decisions on which businesses are built. Business model innovations
are best pursued when owners and operators identify oversaturated markets, low customer
satisfaction or outdated technology.
Product: Nearly always tangible, product innovations make existing material goods better
in some way or are the creation of an entirely new product. It’s the most common form of
innovation; famous examples include smartphones, fidget spinners, wireless headphones or
foot-massaging insoles.
Marketing: Marketing innovation creates new markets or increases existing market share.
Marketing innovations are new, positively-disruptive ways for brands to talk to and engage
with their consumers. Not only can marketing innovation introduce a new way of connecting
with publics, but it can be as simple as promoting an existing product for a different use than
what was first intended.
What’s the difference between creativity and innovation?
Creativity and innovation, while closely linked as part of a creation process, are not the same.
Creativity isn’t measurable, it’s subjective, while innovation – at its most basic level meaning
"new" – is measurable in the sense that an innovation is the creation of something new,
whether it be a new product, idea or method.
Why are innovation and creativity important?
Once an idea is possible, innovation tends to be an easier challenge for more players to
achieve. Creativity is the novel step of being the first to identify that something might be
possible in the first place. But innovation is the action of putting things into practical reality,
despite challenges and resistance, rather than just contemplating. Both are necessary in
business, but only one of them translates to real revenue and profits.
Business leaders frequently interchange creativity and innovation without understanding
what separates the two.
"Creativity isn't necessarily innovation," Hunter told Business News Daily. "If you have a
brainstorm meeting and dream up dozens of new ideas, then you have displayed creativity,
but there is no innovation until something gets implemented."
Hunter noted that many leaders emphasize generating creativity on demand instead of
simply building innovative products, processes and interactions.
"Innovation isn't a mysterious black box," he said. "It can be simple small tweaks to existing
processes, products or interactions. And by focusing on the process [of innovation], and not
the heroically creative individual, we can build innovation at scale."
A good example of innovation profiled on CNBC by Karen Gilchrist was Sergey Petrossov. He
saw a need for a software tool to connect low utilization of luxury jets with travelers willing
to share trips with each other. All the pieces of that market existed, but it was Petrossov who
built the bridge between the two via software to create a whole new company, JetSmarter.
In other words, process is replicable and scalable; a creative individual is not. Petrossov was
one of a kind in realizing what was needed to create a new market, but his software code was
easily repeatable by other programmers once written. Once leaders learn the difference
between creativity and innovation, they can work on inspiring both among their team
members – and building a culture that supports these values.
The importance of creativity and innovation in business
Creativity and innovation contribute to a business’s growth and overall success by filling
unique needs in markets, differentiating businesses from competitors and evolving a brand
as consumer wants and needs evolve. Creativity and innovation keep an organization
dynamic.
How do you develop creativity and innovation?
"While leaders can foster innovation, the organization as a whole must also support
innovation through the makeup of its culture and the way it designs its processes," Hunter
said. "Sometimes the best way to spark innovation is by allowing activity within the
organization that deviates from the norm but that may lead to positive outcomes."
Part of the issue is getting people to imagine and develop new visions of what could be.
Creativity is often associated with art and culture, but it's not required to be Leonardo da
Vinci; what matters is that a person is willing to imagine new possibilities outside of norms.
This is where the idea that can be acted on starts. Consider crowdsourcing ideas to generate
even more possibilities to consider. The harder part, of course, is taking that great idea and
translating it into a physical or technical prototype.
Hunter cited the birth of Starbucks' now-popular Frappuccino drink as an example of how
leaders giving their employees some room for deviation allows creativity to blossom into
innovation. In the early 1990s, the staff at a Santa Monica, California Starbucks invented a
new drink and asked an executive to propose the product to headquarters, where it was
ultimately rejected. Later, the same store invented another drink (the Frappuccino), and the
executive asked the staff to quietly make and sell the drink to local customers. It quickly
became a hit, and the management group implemented the successful idea company-wide
once its value was proven.
"The Frappuccino turned out to be one of Starbucks' most popular and profitable drinks,"
Hunter said. "And, according to [Starbucks' then-vice president of sales and operations]
Howard Behar, it happened because someone was allowed, and even encouraged, to
experiment with a new product that deviated from the company's core product line."
Innovation – Definition, Innovation Types And Meaning
What is innovation and what are the different types and fields of innovation?
Innovation is the practical application of ideas that result in different new types of new
offerings, like products, services, processes, and business models, intending to improve or
disrupt existing applications or creating new solutions.
It doesn’t matter if you are getting the ideas from outside the organization,
through brainstorming, combining of existing ideas, or radical new thinking within your
field. But it should be at the heart of your business and it should constantly be done to ensure
business survival.
Innovation is the specific function of entreprene
Therefore we will explain here the different fields where innovation can happen, 4 different
types of innovation, and also how to best protect your ideas from being copied or stolen.
8 Fields of Innovation
Innovation can be in different forms and outcomes. When we talk about innovation, most
people think of new products while there is a wide array of different innovation outcomes
possible. Here we list the most common
1. Product & Product Performance Innovation
Either a new product is developed or the performance of an existing product is improved.
This kind of innovation is very common in the business world.
2. Technology Innovation
New technologies can be also the basis for many other innovations. The best example was
the Internet, which was itself an innovation but also lead to other innovations in various
fields.
3. Business Model Innovation
Many of the most successful companies in the world managed to innovate their business
model. Using different channels, technologies and new markets can lead to new possible
business models which can create, deliver and capture customer value. Digital
ecosystems are a well-known example of innovation using several technologies and creating
a whole new type of business.
4. Organizational Innovation
Managing and sharing resources in a new way can also be an innovation. This way it’s
possible to use resources and assets in a completely new way.
5. Process Innovation
Innovation in the processes can improve the efficiency or effectiveness of existing methods.
Possible process innovations involve production, delivery, or customer interaction.
6. Marketing / Sales – New Channel Innovation
New methods to capture and hold attention from customers. Either through the use of
innovative marketing/sales concepts or the use of new channels for customer
acquisition/sales.
7. Network Innovation
By connecting different groups and stakeholders it might be possible to create extra value.
This type of innovation is very common due to the use of ICT services.
8. Customer Engagement / Retention
Innovative concepts that try to increase the engagement of customers and keep the retention
up. The goal is to have innovative models to keep the customers “locked-in” or engaged.
The 4 Types of Innovation
First, we need to understand that there are various ways that innovation can have an impact
on products, services, and processes.
Most commonly we differentiate between 4 levels of innovation – Incremental, Disruptive,
Architectural and Radical.

1. Incremental Innovation
Existing Technology, Existing Market
One of the most common forms of innovation that we can observe. It uses existing
technologies within an existing market. The goal is to improve an existing offering by
adding new features, changes in the design, etc.
Example
The best Example for incremental innovation can be seen in the Smartphone market where
the most innovation is only updating the hardware, improving the design, or adding some
additional features/cameras/sensors, etc.
2. Disruptive Innovation
New Technology, Existing Market
Disruptive innovation is mostly associated with applying new technologies, processes,
or disruptive business models to existing industries. Sometimes new technologies and
business models seem, especially in the beginning, inferior to the existing solutions but
after some iterations, they surpass the existing models and take over the market due to
efficiency and/or efficacy advantages.
Examples
Amazon used Internet-Technologies to disrupt the existing industry for book-shops. They
had the existing market for books but changed the way it was sold, delivered and
experienced due to the use of disruptive technologies. Another example was the iPhone,
where existing technologies in the market (Phones with buttons, keypads, etc.) were
replaced with touch-interface-centered devices combined with intuitive user interfaces.
3. Architectural Innovation
Existing Technology, New Market
Architectural innovation is something we see with tech giants like Amazon, Google, and
many more at the moment. They take their domain expertise, technology, and skills and
apply them to a different market. This way they can open up new markets and expand their
customer base.
Examples
Especially digital ecosystem orchestrators like Amazon and Alibaba use this innovation
strategy to enter new markets. They use existing expertise in building apps, platforms, and
their existing customer base to offer new services and products for different markets. A
recent example for this: Amazon recently entered the medical care field.
4. Radical Innovation
New Technology, New Market
Even it is the stereotypical way most people see innovation; it is the rarest form of them all.
Radical innovation involves the creation of technologies, services, and business models that
open up entirely new markets.
Example
The best example of radical innovation was the invention of the airplane. This radical new
technology opened up a new form of travel, invented an industry, and a whole new market.
❖ How to encourage innovation in your business
Innovation is sometimes a key critical area for the survival of many businesses and
industries. But encouraging your employees to come up with new ideas can be sometimes
stressful.
Here are some tips on how to get more innovation going:
• Actively encourage your employees
• Ask customers for feedback/invite customers for feedback rounds
• Ask stakeholders for feedback
• Invest in your employee’s education
• Actively reserve resources for Research and Development (R&D)
• Build a reward system for innovative thinking
• Collaborate with start-ups and innovative companies
• Build an entrepreneurship program
• Do active research on the internet (follow industry news, tech news, etc.)
• Ask / interview experts
What Creativity?
❖ Creativity is nothing but the process of creating something unique and new. Creativity
is reaching to innovative solutions, new ideas, unique concepts through
brainstorming, discussions and healthy communication among employees.
❖ Creativity is defined as the tendency to generate or recognize ideas, alternatives, or
possibilities that may be useful in solving problems, communicating with others, and
entertaining ourselves and others.

What is creativity?
• That most human of qualities, creativity evidences itself in our ability to solve
challenges or problems with novel solutions ideas. Shawn Hunter, author of Out
Think: How Innovative Leaders Drive Exceptional Outcomes (Wiley, 2013), defines
creativity as "the capability or act of conceiving something original or unusual."
• The key factor is that creativity remains a great idea alone, not reality yet.
Interestingly, creativity is very specific to people; animals have no way to
communicate complex ideas, and much of what they do transfer is assumed by
instinct or by example.
Creativity and innovation are two related but separate notions, and each is required for
workplace success. Here's the difference, and how you can inspire both.
• Creativity doesn't lead to company inventions and growth, innovation does. However,
innovation doesn't happen without creative people on board.
• Generating creativity means allowing people to think outside the box and go against
the norm sometimes.
• If you let bureaucracy stop creativity, innovation will be the victim in your company,
letting your competitors move ahead with new market share growth.
• This article is for aspiring entrepreneurs and business owners who want to better
understand how to combine creativity and innovation to create truly original
companies.
• "Creativity" and "innovation" are two words that are constantly thrown around in
brainstorming sessions, corporate meetings and company mission statements.
There's no question that these values are highly prized in the fast-paced modern
workplace, but do leaders who use the terms truly know the difference between
them?
Types of creativity
• Arne Dietrich, Associate Professor of Psychology and Chair of the Department of
Social and Behavioral Sciences at the American University of Beirut, Lebanon,
conducted research into creativity that segments it into four types: deliberate and
emotional, deliberate and cognitive, spontaneous and emotional and spontaneous
and cognitive.
 • People can experience each of the four types of creativity. Especially true for
knowledge workers like researchers, lawyers or doctors, deliberate and cognitive
creativity may manifest while on the job, but spontaneous and emotional creativity
may show itself during an artistic pursuit.
• Deliberate and cognitive creativities use focused attention and formed connections
between information stored in the brain and rely on the prefrontal cortex, while
emotional and spontaneous creativities stem from the amygdala.

Barriers to Creativity:

The Following Barriers to Creativity:

• Fear

• Poor leadership and commitment to innovation

• Bureaucratic policies and red tape

• Silos and turfs

• Pressure to produce immediate results

• Personal biases: beliefs, attitudes and values

FEAR

Fear is the number one barrier to creativity and innovation identified by most of my
colleagues within the organization. Fear of failure. Fear of ridicule. Fear of decision-making.
Fear of making mistakes. Fear of taking risks. Fear of not being promoted. Fear of change.
Fear of senior leadership. Fear of the unknown.

Fear keeps a person from exploring new ways and enjoying an investigative mindset where
failure can be expected and is welcomed as a source of new information and learning.
Creativity and innovation are positively associated with joy and love, while negatively
associated with fear, anger and anxiety (Breen, 2004). Young employees learn very quickly
that in some organizations, you don’t have to raise your head very high above the ridgeline
before it will get it shot off by senior leadership.

POOR LEADERSHIP AND COMMITMENT TO INNOVATION

If an employee is not given time or encouragement to be creative and innovative, it can

almost certainly be guaranteed that new projects and new mechanisms for their delivery will
not be born. Nothing new will happen. Much depends and hinges on how senior leadership
demonstrates their commitment to creativity and innovation (Sridhar, 2004). Too often, the
atmosphere becomes poisoned by criticism that fosters insecurity, anger and personal
agendas with very little consensus building, collaboration or fun. Senior leadership
sometimes fails to realize that what they say and do in this context is more powerful than
any speech or policy they may make.
As a leader, how do you respond to new ideas? What is your reaction to ideas that may not
have occurred to you? Are you willing to let other people get the recognition and reward for
creativity and innovation? Do you really have a passion for doing the job in new and
imaginative ways? Are you willing to change personally to make this happen? Are you willing
to put your neck on the line to protect an employee who shows inventiveness and initiative?
Are you willing to obligate funding to support creativity and innovation? Do you prefer to
judge ideas rather than encourage them or generate them yourself?

BUREAUCRACY, POLICIES AND RED TAPE

Bureaucracy, age-old policies and needless red tape can stifle new thinking and fresh
approaches. They promote the status quo as the safest response to change, and therefore
affect the ability to respond to new information and challenges by devising new responses
and procedures (Gryskiewicz, 1999). An organization’s mind-set, culture and procedures can
smother inventiveness to the point that fewer and fewer ideas come forward as the creative
mind gives up on navigating bureaucratic obstacles and numerous standard operating
procedures (Kelly, 2001).

SILOS AND TURFS

Individual fiefdoms and acquisition of power can prevent collaboration and

experimentation, especially if it involves new ways of working. There is unwillingness on the
part of some leaders to share power, responsibility and reward. Empowerment of others
becomes more lip service and there is “no intellectual acceptance of the benefits of creativity”
and innovation. Intrinsically, those at the top do not believe creativity and innovation will
help the organization or they doubt if it is really needed (Sridhar, 2004).

In theory, the organization for which I work encourages middle-management to delegate

authority and empower subordinates to think out of the box. But in reality, they reject that
practice and foster a system that rewards a senior leader’s micromanagement at the cost of
disempowering and stifling the creativity, innovation and individual initiative of their
followers (Abrashoff, 2002).

PRESSURE TO PRODUCE IMMEDIATE RESULTS

The unrelenting pressure to produce results immediately, as if there is no tomorrow, often

leads to the tyranny of the “either or.” Either be creative and innovative or be productive,
producing results. Creativity and innovation are not seen as being relevant unless they can
be “summoned on demand and produce short-term results” (Sridhar, 2004). People are most
creative when they are motivated primarily by the interest, enjoyment, satisfaction and
challenge of the work itself (intrinsic motivators) (Amabile, 2001). Creativity and innovation
cannot be ordered. It must be inspired and groomed. It takes time and it must flow from a
relaxed atmosphere accentuated with fun.
PERSONAL BIASES: BELIEFS, ATTITUDES AND VALUES

Each employee brings a mix of biases from their own belief system or background. This often
times leads to a lack of collaboration, disproportionate personal ambition and, in a worse
case scenario, sabotage of coworkers’ efforts and the slandering of their reputations. These
biases are subversive and dangerous in that personal motivation and ambition is colored and
warped, hindering one’s ability to see things differently. Issues tend to be viewed myopically,
creating tunnel vision that fails to see a bigger picture outside of one’s biases (Bennis, 1989).