Marketing Basics 3: How to Determine Customer Wants and Needs

As we continue to discuss the basics of marketing, we start to show how marketing is tied directly to your customers.

[April 10, 2006]

This series of articles is being written by the graduate students of Prof. Guy Decatrel in his class, MKT602: Marketing Management, at National University's Fresno campus. The students are: Jessica Bueno, Daniel Champion, Sara Chism, Lupe Garcia, Gill Gurshakti, Robert Kosanouvong, Arman Kyurinyan, Pa Lee, LaKishia McCreary, Victor Ramayrat. Additional ISP-specific information is supplied by telecom consultant Peter Radizeski.

Focusing on what makes customers want and need certain products and/or services is the key to a successful business. The absence of satisfaction (for a want or a need) is what drives customers to buy. An actual "need" far outweighs desire for a product or service.

To determine customer wants or needs, a business must first understand what the wants and needs are, and then assess what products or services it can profitably provide. The target market and its environmental factors (covered in an Environmental Scan, an article to be published later this year) must be analyzed to determine strategic plans to reach every customer possible. When needs or wants are clearly understood, a company can find the sweet spot and address it on target.

Many ISPs define a market by focusing only on products/services that currently meet customer needs. For example, the ISP that believed that their market was the "cheap access" space likely made some poor marketing decisions. There are strong and well-known players with deep pockets in that market, like Net Zero. Such a service may benefit a certain market segment.

There is the question, though, as to how many customers really want cheap access, a question as to how many take the time to understand what does not come with this service offering. Thinking about customer needs first—and then identifying services that meet those needs—is the best way to define a market.

A starting point
To pinpoint customers' needs and wants, a company may first look at the big picture and obtain key data such as geographic location, population, cost of living, and languages spoken in the area that may drive needs and wants. The company can obtain much of this information through simple observation and local knowledge.

However, conducting a market trend analysis is a main step in grasping the market's needs and numerous wants. Some businesses determine customer wants by a combination of some competitive analysis and asking a sample of people about wants and needs. What are competitors offering? How have they been successful? Why have they failed? What has changed in the target market and how can this be taken advantage of?

This analysis alone can guide an ISP in determining what wants and needs are missing in the target market. It can be critical to establishing a well-supported service that customers want. The want or need can be translated as a missing value. For example, many ISPs will offer 24 X 7 technical support services where others may be offering limited hours of technical support. In its marketing, the ISP can explain the benefit of 24 X 7 support to a target audience. This service gives the ISP a competitive advantage, i.e., value to the defined and targeted audience.

Many ISPs set up businesses that are structured for the ISP's convenience, not the convenience of customers. How does this fit with determining customer wants and needs and satisfying customers? Listening to customers is not usually in many ISP managers' comfort zones. It is generally a reactive process. ISPs need to know:

• What the ideal customer profile is like
• A good target market (demographics; technical profile; problem, need)
• When do you, when should you, and where should you listen to customers (onsite, online, tech support, user group meetings, point of sales, e-mail, advisory boards, surveys, etc)

Technology has transformed choice. Choice, alternatives, abundance, and selection transformed the marketplace. Know it or not, the past ten years have belonged to customers. Marketing moved from monologue to dialogue, from mass markets to target marketing. Brands and image have taken center stage. What does price connote? How do you determine what the market will bear? How will the competition react to a price change: with more value or lower price or what?

Conclusion
The authors of this article aim to show that Marketing is a total system of business activities. It is the process of planning, pricing, promoting, and distributing products to target markets that are truly needed and that profitably achieve organizational objectives.

In future articles, we will demonstrate that the entire structure of business activities should be customer oriented. A marketing program should start with an idea about a want-satisfying product and not end until the customers' wants are completely satisfied. Sales do not happen automatically; they must be stimulated through Marketing.

—End