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Functional & Psychological Needs: Definition & Differences

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  • 0:00 Consumer Purchase…
  • 0:56 Example
  • 2:53 Salespeople's Use of…
  • 4:14 Lesson Summary
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Lesson Transcript
Instructor: Kat Kadian-Baumeyer

Kat has a Master of Science in Organizational Leadership and Management and teaches Business courses.

People shop to fulfill two different needs. Some consumers have functional needs that are satisfied when the purchase makes logical sense. Psychological needs are met when the product can be connected with emotion.

Consumer Purchase Decision Process

In order to understand functional and psychological needs, it is important to first learn the consumer purchase decision process, which is a set of stages people go through when they are about to make any purchase. It's comprised of the actions a consumer takes that lead to the purchase of a product or service.

The process includes:

  • Problem recognition
  • Information search
  • Evaluation of alternatives
  • Purchase decision
  • Post-purchase evaluation

For this lesson, our primary focus is on problem recognition, which is the difference between the present state and the ideal state. Simply stated, it means the consumer recognizes an unfulfilled need and wants satisfaction. Now don't think the need must be a big purchase, such as a home or a car. It can be a very simple need - like being thirsty. These needs can be either functional (basic) or psychological.

Example

Let's take a look at an example. After you and a buddy take your morning run, both of you pop into the nearest convenience store to buy a cold bottle of water. You don't even look at the brand. It's there. It's cold. And you are thirsty. You are looking to satisfy a functional need, which is a basic human need that is practical and, in a sense, needed for survival.

Your buddy, on the other hand, scours the cooler looking for the newest imported water with the fancy label, the one that says it's collected directly from the mountains in Europe. It costs significantly more, looks much trendier, and makes a statement. Your buddy is satisfying a psychological need. If he makes the purchase, it will probably make him feel good, even important. The more expensive water also conveys social status. It is less about quenching thirst and more about being seen with the most expensive water money can buy.

How both of you come to the decision about which water to buy is the information seeking step in the process. This is where the consumer seeks information about the product. We use past knowledge and experience, reviews, advertising, and suggestions from family or friends to make the decision to purchase.

Once we have a product in mind, like the bottle of water in our example, then we decide on a specific brand of water. This is where we evaluate alternatives based on value, price, quality, brand name, and the need we seek to satisfy. It's also the step in the process where we decide whether to buy at all. A buyer with an unmet functional need may think about value and price. Someone with an unsatisfied psychological need may consider quality and brand name to make their decision.

When the decision is made to buy something, everyone goes through post-purchase evaluation. This is where we question whether we made the right choice. If our functional or psychological need has been met, we will be pleased with the purchase. If not, we may feel anxious and unsettled.

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