Human Performance and Achievement Resources
red line
Home Articles & Publications Directories Link Directories Topics Directory Specialized Interest Directories Performance & Productivity Blog Search

Management Tip: Understanding Why People Buy Things
by Daryl Cowie

There are many reasons that people buy things, and to run a successful business, one has to understand the motivations that people have for making purchases. In general terms, you can break down the reasons that people will choose to buy something into five general categories: basic needs, convenience, peace of mind, image or ego, and entertainment. Let's take a look at what these different reasons mean and how you can take advantage of better understanding these reasons to come up with useful business management tips.

The first reason that people buy things is to fulfill their basic needs. Basic needs are things such as food and shelter for individuals and things such as materials and labour for businesses. When people are shopping for their basic needs they are generally looking for the least expensive way to satisfy those needs. For example, if you are a refugee in a new town and looking for a place to stay, you probably do not care whether you stay in a four star fancy resort hotel or a small inn or hostel; you just want to find some place to stay the night so you can begin to get acclimated. If you can satisfy your basic need with an inexpensive hostel then that is the option you as a consumer are most likely going to opt for. There are two business tips that you can take away from this: One, if your business is engaged to satisfying people's basic needs, then you need to be very careful about pricing things right. The second is that if you don't want to be in a continuous low margin price war with your competitors you should think about ways to raise the value of what you offer from a basic needs product to something that also addresses one of other four reasons people buy.

The second reason that people purchase things is that they want convenience. In this context, convenience means anything that saves you time and/or money by doing things in the most efficient way possible, or finding some way that you can reduce the amount of effort you need to put into things. For convenience, people buy equipment such as dishwashers and washing machines, or hire maids to clean their homes, or buy microwave dinners instead of spending hours cooking. Convenience buys make it possible for people to spend more of their lives doing the things that they want to do. If you're in the business of saving people time or money, you are actually in the business of providing convenience.

The third reason on our list of motivations is peace of mind. Peace of mind simply refers to things that help people maintain the stability and security of their lives. Insurance is a common example of a product which gives people peace of mind by providing money in the event that some tragedy befalls them. Things such as fire extinguishers, smoke alarms, airbags on cars, lo-jack systems and so on also help people to feel safer.

The fourth reason is a powerful one; it's the appeal to image and ego. Everyone wants to give a good impression and look good in front of the people around them. Products that are trendy, attractive and make people feel special or popular are always in high demand. Endorsements by celebrities and advertising / publicity which demonstrate that your product is the popular choice can go a long way towards making people choose your products and services over your competitors.

Finally, people like to spend money on things that are fun. The entertainment industry is huge and making more money all the time. We all love to have fun, and with the high standard of living in today's western society if your product or service is truly entertaining then you should have little problem reaching a lot of people, and making money from helping people have fun.

Basic needs, convenience, peace of mind, image or ego, and entertainment; this is what everyone is really buying. Taking the time to figure out what combination of these five basic things you are offering can really help you focus in on your marketing message, and understand what it is that will attract people to your business.

Daryl Cowie has shared management tips with people in over 30 countries around the world, and found a solid foundation in business 101 to be at the core of successful managers. Daryl founded his management training company, Boundless Thinking, after a successful career at General Electric.

Sign up for a free class at:

Daryl Cowie may be contacted at


Home Articles & Publications Directories Link Directories Topics Directory Specialized Interest Directories Performance & Productivity Blog Search

Website and contents ©1997-2011 C.S. Clarke, Ph.D. (Except where otherwise noted. Articles and content from other contributors are copyright to their respective authors.) All rights reserved.