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IAI Actuarial Core Principles · Business Management · Business and consumer needs, the industry value chain and competitive forces

Which statement best distinguishes a customer's stated want from an underlying need in financial services, as used in strategic analysis?

A stated want, such as a specific policy type, is often just a way of meeting a deeper need like financial security for the family. Strategic analysis seeks to uncover that underlying need so products can be designed to meet it, rather than simply reacting to requests.

  1. AThey are identical, so research on either gives the same result
  2. BA want is a regulatory requirement while a need is a marketing claim
  3. CA need always refers to price and a want always refers to product features
  4. DA stated want, such as a particular policy type, may be a means of meeting a deeper need such as financial security, which research should uncoverCorrect
  5. A need can only be identified after the customer has bought a product

Explanation

Customers often ask for a specific product, but the real driver is an underlying need like protection or security for family. Uncovering the need lets firms design better propositions. The other statements misdefine the terms.

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