CONSUMPTION PATTERNS - NEEDS, WANTS, DESIRES -- Part 4

CONSUMPTION PATTERS --- NEEDS, WANTS, AND DESIRES   -- PART 4

 

Consumption is proceeded by a NEED to satisfy some DESIRE and results is a WANT on the part of the Consumer.  Proceeding up the consumption chain of an organization we find that the paradigm, NEEDS, WANTS, and DESIRES, repeats itself at each stage of the transactional cycle. A transactional cycle is the sequence of Seller-Buyer links that take place between the initial acquisition of a good or service that functions as an input to the production another good or service and the last link when the good or service is finally consumed to satisfy the NEED that created the transaction.

NEEDS

The most basic motivator at any level of consumption is NEED. “What will solve a consumer’s immediate survival problem?” The reference point is the consumer or buyer. The question that a researcher or Seller must ask is, “What is the problem that the consumer feels a NEED to resolve in order to “survive” the particular situation?”  

Survival is the critical emotional or psychological response to a NEED. It is the basic motivator of any individual or group, whether an animal, the human animal or a human population. NEEDS are basically the PERCEIVED threat to SURVIVAL in the moment. Without the perception of a threat, no matter how intense, there is NO NEED. Response to a NEED arises in the CONSUMER, creating a product that will fill that NEED is the role of the SELLER.

The PRODUCT is a specific item that the customer PERCEIVES that will meet or satisfy that NEED. The product may be a real or physical object, e.g. oxygen, food, wages, etc., or it may be for the human or human group ideational service, e.g. emotional support, religious or political belief, economic security, etc.  Generally, it is a combination.

Since Survival and NEED are effectively equal from a CONSUMER point of view, the PRODUCT and/or PRODUCER of the PRODUCT has an opportunity to occupy a MONOPOLY position relative to the CONSUMER. From the point of view of the SELLER, this is the BEST POSSIBLE DEAL. From the BUYER’s point of view this is the only DEAL.

There are several ways for the SELLER to gain a monopoly position all of which are a function of time, or the duration of the NEED. The SELLER or PRODUCER obtains a monopoly by becoming the ONLY SUPPLIER in the transaction situation where SURVIVAL depends upon resolving the problem that created the NEED. When SURVIVAL is less of an issue, the SELLER may achieve a monopolistic position by becoming the preferred SUPPLIER of the solution to the BUYER’s specific NEED. Finally, the SELLER may stimulate an unanticipated NEED in the BUYER by offering a PRODUCT that in new or unique to the BUYER’s experience and thereby create a “monopoly” or “brand loyalty.”

 WANTS

WANTS are NEEDS that arise when there is one BUYER and several SELLERS. This transactional situation of NEED creates the psychological state of CHOICE. Given a specific NEED and a range of alternatives for resolving the NEED, CHOICE becomes a factor in determining the consumer’s behavior. When PRODUCTS compete as solutions to the NEED, both the CONSUMER AND PRODUCER are faced with CHOICE. CHOICE, in turn, depends upon knowledge and experience of each actor. Where the motivational NEED can be met by a range of Suppliers, the BUYER and SELLER each competes to make the “Best Deal.” CHOICE introduces CHANCE or PROBABILITY into the CONSUMPTION DECISION. The criterion for both parties to a DEAL changes from the BEST POSSIBLE for one or the other into what is a POSSIBLE DEAL that is acceptable to both.

At the human and group level, one of the most basic factors in WANTS is the choice between Prices and Desired results. This is where the CONSUMER and PRODUCER meet. CHOICE then creates a situation where the individual interests of CONSUMER and PRODUCER compete. It is here, in this TRANSACTIONAL space, that marketing and advertising become critical for a PRODUCER’s survival. It is here that the CONSUMER gains leverage over their NEED and SUPPLIERS.

DESIRES

DESIRES are cultural choices. DESIRES represent the group ideals, meanings, and values held by a CONSUMER CLASS of individuals. Here the CONSUMER’s goal is the SURVIVIAL of his/her STATUS within his/her primary reference group and with reference to the society as a whole.

STATUS is a NEED, in Maslow’s hierarchy of NEEDS. STATUS is also driven by the NEED to REPLICATE one’s position through their behavior as a member of a GROUP of CONSUMERS.  

DESIRES are the criteria one uses to define CULTURAL NEEDS. DESIRES, unlike WANTS, are EXCLUSIONARY CHOICES. DESIRES exclude BUYERS and SELLERS from those who CONSUME certain products that bestow unique or special STATUS on the CONSUMER.

CONSUMERS in this GROUP feel that they have earned or deserve their status. Their NEED is to PRESERVE their STATUS at all cost. In effect, they hope to create a monopoly on their STATUS through their consumption behavior. This is a behavior pattern that reflect the cultural ideals, meanings, and values of the society’s STATUS structure.

 DESIRES reflect the way members of one group compete with members of other groups. Products and services that symbolize STATUS, such as housing, entertainment, recreation, style, etc. becomes NEEDS for STATUS SURVIVAL. Where Money is involved, such STATUS is often gained from wealth and maintained by Price.

In this transactional space of DESIRE, the CONSUMER has power over the PRODUCER. The PRODUCER’S ECONOMIC  SURVIVAL is dependent on the DESIRED CHOICES that the CONSUMER makes. Since STATUS is relative, the PRODUCER is challenged to offer the CONSUMER a selection of CHOICES that address the specific  STATUS NEED and to define who is to be accepted and who is to be excluded from the STATUS group.  The PRODUCER must replicate the STATUS symbols that address in the NEEDS of this transactional space or MARKET place. DESIRES can be manipulated through FASHION, symbolic signs of STATUS that change over time and social space.

These three factors, NEED, WANTS, and DESIRES, apply both to the individual and the group consumer. It is here that the anthropologist with their holistic perspective have a competitive advantage to distinguish the physical, social, and cultural elements that pertain to a specific Transaction Situation and Space.

An Anthropological Look At Discounting - A Case Study

 

As a small business consultant I have seen this discounting mentality operating at the micro-firm level to the detriment of the small business owner. The fear of a perceived competitive pricing threat, often misplaced, is the driving force.

 A few years ago I was consulting with a local (RI) family owned jewelry firm. Like many such firms, this client had a number of different related businesses going under one roof. All of these were being done on a small scale. This "farming" practice, or diversification, provided a comfortable cash flow, but resulted in poor information about the individual business operations.

 One business was manufacturing stainless steel ear-ring blanks for costume jewelry manufacturers. Imported nickel plated blanks from Asia were selling at half the price my client was asking for his stainless steel blanks.

In response to the perceived pricing threat, my client developed a new process for stamping out his blanks. The process cut his production costs in half and making him competitive, he felt, with the imports.

 In addition to the foreign competition, he faced competition from two domestic competitors who also made stainless steel blanks. These competitors competed by selling their products at a slight discount to my client's price.

 Federal regulations were in place to limit the use the nickel plating in ear rings because of health concerns. This was going to have an impact of the domestic use of imported blanks in domestic ear-ring manufacture.

 My client used his innovation to immediately dropped his price to slightly higher than the imports, or about a 45% discount. He did this hoping to remain competitive with the imports. This also drastically undercut his domestic competition.

At the time I met the client, he was concerned because the imports had just lower their prices by half and his revenues were down. He felt he could not compete with their new pricing. What could he do?

 After listening to him, I discovered that he had no strategy. He failed to see the true value of his product and the environment in which he was competing.

 Based on discussions with his customers, I learned that his product was considered to be of high quality and fairly priced. His customers appreciated the price cut. According to several customers, the imports while costing 50% less per gross had quality issues. Close to 50% of the imported blanks had to be rejected for poor quality.

To the customer, the real price for imports was about the same as what my client was asking for a better quality product. The real problem they mentioned was my client's lack of capacity to fill orders in the volume and time the customer needed. This, more than price, drove customers to buy imports or his domestic competitors' product.

 The client failed to understand who and what his competition was. He failed to understand the value of his product to the customer. Instead, he responded to a perceived pricing threat with a discount pricing strategy before he first reviewed his original value proposition. As a result, he lost all of the advantages his innovative process created. He had the opportunity for windfall profits and to make inroads into his domestic competitors' market, instead he chose to lowered prices too quickly. All the benefits of his innovation went to his customers in the form of a substantial discount without resolving his problem.

 It is critical, especially in times like these, to re-examine and confirm your value proposition before taking the discount road. You can always ask for less, but it is very hard to ask for more once you lower your price.

CAREER ANTHROPOLOGIST

Career Anthropologist was founded Jun 2011 and may be found on LinkedIn  https://www.linkedin.com/groups/3940979/ .  As of 12/2/2020, Career Anthropologists had 3,765 domestic and international members.

Description: A career anthropologist is someone who has undergone and completed an enculturation process in the anthropological discipline at the post secondary education level; and who is committed to pursuing a career where they expect  to utilize their anthropological knowledge in a rewarding and productive career.

Invitation:  If you have earned a BA, MA, and/or PhD anthropology and are pursuing a career where you are using your anthropological  training and skills in your job, business, occupation and/or daily life you are invited to share your experiences with fellow career anthropologist. 

What we do: The career anthropologist has the right to know that the time and money they have invested studying for the degree has a potential of producing a positive return on investment (ROI). The only way he/she will see this is if there is some evidence that the profession he/she is committing to, is committed to defending and expanding the occupational territory.

The Career Anthropologist group on Linkedin invites, individuals to join and share their knowledge, experience and assistance to and with fellow members. Career Anthropologist Group is open to International membership and members are encouraged to dialogue with one another and gain a cross culture understanding and respect for the opportunities and problems of pursuing a career as an anthropologist or using the anthropological perspective.

If your are interested check it out.