What are Needs and Wants? The Buying Decision Making, Supply & Demand

What are Needs and Wants?

Needs

When you require something essential for your survival or day-to-day life, it becomes your need.

example: food, water, clothing, etc.

Wants

Desires for goods and services we would like to have but do not need. (Or simply put, not necessary.)

Why do we buy things?

We buy things because we need them in our day-to-day life and think they will make us happy. However, things that make us happy do not always cost us money like spending time with family, playing with our friends, etc.

> Can you think of an example of a Need and a Want?

How to make Buying Decisions?

It is important to know how to make correct buying decisions. Since our needs are necessities, it is important to first spend our money on our needs and only then spend so much money on any unnecessary and expensive wants. Prioritize NEEDS over WANTS.

5 Stages of Buying-Decision Making

1.) Problem Recognition or Need Recognition

• Do you need it right now?

• Is it urgent?

• What kinds of needs or problems arise?

2.) Information Search

• Quality

• Price

• Brand

3.) Alternatives Solution

• Evaluate alternative brands

4.) Purchase decision

5.) Post-purchase decision

• Will you buy it again?

• How satisfied are you?

• “Did I make the right decision?”

Supply and Demand

Supply

The number of goods and services that are available for people to buy.

Demand

Quantity of consumers that are willing and able to buy products at various prices during a given period of time.

Don’t get it? Click here. It is important to understand the principle of Supply-Demand because it’s a universal language and this happens everywhere.

Reach out to me on IG (erincourtney_) if you want a further explanation! :)