Category Archives: Marketing

Marketing Needs wants and demands

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To help understand customer requirements it is helpful to think in terms of needs, wants and demands of the customer. Needs are defined as ‘states of felt deprivation’ such as food and self-expression. Needs become wants when it is directed towards a specific object or service that is believed to satisfy that need. Wants are the manifestation of the human need that is shaped by the individual and their culture.

Wants become demands when the customer has the capacity and inclination to pay for the object or service.

Marketers divide the types of needs into stated, real, unstated, delight and secret needs as shown below:

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Alternatives to Maslow: Max-Neef

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Alternatives to Maslow: Max-Neef

As discussed in an earlier blog post, Maslow’s Hierarchy of Needs has been getting a bad rap. The categories of Maslow’s are great, but the use of the pyramid seems questionable.

This line of thought, and a recent marketing assignment, had me wondering – if Maslows is faulty, what else could I reference when explaining possible needs of the consumer?

Enter Max-Neef’s theory of Fundamental Human Needs. According to wikipedia Max-Neef classifies the fundamental human needs as:

  • subsistence
  • protection
  • affection
  • understanding
  • participation
  • leisure
  • creation
  • identity
  • freedom

Kathy McMahon from blog peak oil blues has written a great post on Maslow’s and Max-Neef, if you have ten minutes to spare, check it out.

 

Company Orientation Towards the Marketplace

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Businesses orientate themselves to the marketplace in different ways. The theory of company orientation towards the marketplace categorises businesses into one of five main orientations – production, product, selling, marketing and holistic marketing.

The production concept focuses on production efficiency, low cost and mass distribution. It is based on the assumption that consumers prefer products that are cheap and easy to obtain. Companies pursuing this strategy are effectively stating they can deliver their product to the end customer quicker and cheaper than their rivals.

At odds with the production concept is the product concept. The founding belief of this concept is that consumers prefer higher quality products that are innovative, more effective, or more styled than their cheap and easy to obtain counterparts. The assumption of this concept is that customers are able to detect and appreciate the higher quality.

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Maslows Hierarchy Of Needs

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Maslows Hierarchy Of Needs is a very widely used MBA and marketing model. What is it, why is it contentious, and should you use it?

In 1943 Abraham Maslow came up with the theory that is commonly referred to as ‘Maslow’s Hierarchy of Needs’. Maslow believed that we have five main categories of needs:

  • Physiological
  • Safety
  • Belongingness & Love
  • Esteem
  • Self-Actualization

It’s widely used, not just in marketing. In the marketing context it is used to help think on how the companies product or service meets these (usually) non-stated needs. By meeting the holistic needs of the consumer, the product will be more meaningful to them, and in turn, have greater success.

The following diagram summaries the theory:

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Product Focused Marketing Strategy Example LPG Australia

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I recently came across an interesting article on the state and hopes of the LPG industry in Australia. It serves as a good product focused marketing strategy example.

These last few years they’ve faced a declining market due to the popularity of the hybrids, high tech fuel efficient engines and the resurgence of diesel power.

Michael Carmody, the CEO of LPG Australia, has a mandate to be product centred – he is after all the head of a product focused entity. So in response to a declining market it is no surprise to read he’s staying “on product”. However he is also representing the LPG converters and installers who have been doing it very tough. I think they need some better advice.

As quoted on a recent article on the carsales.com.au network, he states:

“The decline in vehicle conversions started occurring in 2008, which I guess was the heyday of vehicle conversions — and the conversions have been declining since that period, where today the market is doing it extremely tough… in terms of keeping that vehicle conversionindustry a viable industry.”

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Marketing is not the Sales Back Office

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From a technical background, I never really understood what marketing was. I think a lot of people think of marketing as the sales back office, those in sales who prefer to stay in the office, the ones that organise the brochures and events, and think on how a product can be dressed up to sell more. Studying marketing management has made me realise that a marketing department is so much more.

Sales is only a small facet of a marketing departments concern. I believe a great marketing department will ask (and prove) things like:

Who are the customers?

What problem are we solving for them?

What is the essence of our value proposition?

Marketing should be less about putting dressing on the product and more about understanding and improving the essence of what the product does for the end user. A key benefit of this way of thinking is that it opens the mind to considering other opportunities to deliver similar customer value and lessens reliance on a particular product. We see this now, with electricity companies, rebranding themselves as energy companies, or how apple has successfully repositioned from computers to encompassing “your whole digital life”.

The product or service you provide will be disrupted at some point, and this reframing will help prevent such an event from being a business disaster. Maybe even it will be your company doing the disruption.

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