“How few are our real wants! And how easy it is to satisfy them! Our imaginary ones are boundless and insatiable.” – Augustus William Hare (Guesses at Truth, 1827)
There are two kinds of products: need-to-have products and want-to-have products. Knowing which kind you are selling is critically important to your success.
Need-to-have products include houses, furniture, food, water, and electricity. Selling these products is usually a matter of providing good value. The great thing about need-to-have products is that customers keep on buying them. The difficulty is that you are usually competing against a host of like products — so the pressure to keep rates low is enormous. (Think airline travel. Think coffee.)
Want-to-have products include jewelry, perfume, draperies, and art. To sell these products, you need to create a perceived value for them. You also need to create the desire in your customers to own them — and that takes a great deal of skill. Whats great about want-to-have products is that they tend to be viewed as being unique. So if you promote them properly, you can charge a lot of money.
Most products are not clearly one way or the other. In that case, you need to make a decision as to which way you are going to push your marketing.
Take coffee, for example. If you want to sell your coffee beans to the need-o-drink market, youll have to accept very small profit margins. Youll have to cut big deals and move a ton of beans. Once locked in with vendors, you might enjoy very good ongoing business and very nice (but small, percentage-wise) profits. But you wont have to sell that hard.
If, on the other hand, you want to position your coffee beans to the want-to-drink market, you will have to come up with a good reason why people should pay a premium price for them — and youll have to keep the creative process going to continue to support your argument.
In a future message, I’ll talk about specific marketing strategies to consider for both need-to-have and want-to-have products.