What term is used to describe wants backed by buying power?

The term that describes wants backed by buying power is "demands." This concept is vital in marketing as it illustrates the practical side of consumer behavior—how much consumers are willing and able to purchase based on their desires.

When a consumer has a want, they express a longing for a particular good or service. However, it is only when this want is supported by the financial means to actually make the purchase that it transforms into a demand. This relationship emphasizes the significance of both desire and purchasing capability in determining market dynamics.

Understanding the difference between needs, wants, and demands is crucial for marketers. Needs are basic requirements for survival, while desires reflect a person's preferences for satisfying those needs. Preferences further define choices among available options. However, only when a desire is aligned with the consumer's ability to pay does it translate into demand, which is essential for businesses to identify potential markets and develop strategies accordingly.