Topic: Just for Fun

Not Market Oriented And Successful?

Posted by amanda.russell85 on 250 Points
We recently had a debate on whether is it possible in today's society for a firm to NOT be market oriented and still successful. I left a little confused. Does anyone have insight? And if so, can you name any companies today that are leaders in their marketplace but not very market oriented?
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  • Posted by mgoodman on Accepted
    Depends on how you define "success" and what you mean by "market oriented."

    If "market oriented" means "satisfies important consumer or customer needs," then I don't think there are any "successful" companies that are not market oriented.

    And if "success" is measured in long-term profitability, then my paragraph above still stands.

    Keep in mind, though, that not all firms are seeking long-term profitability as the goal, and sometimes a not-so-important consumer or customer need can have short-term appeal. (Think fad products ...)
  • Posted by steven.alker on Accepted
    I suppose that if all companies in a given sector produced exactly what their market research told them that their market wanted, then they’d all end up producing something which was remarkably similar. Look at mass market, mid range cars in the 1990’s when everything became bland, anodyne and frankly boring.

    Then along comes Renault and say’s stuff the market research lets make a small people carrier. OK no one’s asked for one and in a way; the estate cars with 7 seats fill the niche but let’s do a mini-Espace. Gosh went the buying public, what a good idea and about 10M sales later (It feels like it) Renault must be very happy.

    They must have gone mad in fact because they allowed their own version of Dr Frankenstein to create a limo with a Z bed in its rear screen – I can’t even remember the name. No one wanted such a design before production and after production, no one wanted to buy one. These both highlight the hazards of not pandering to a known market and the value of a rubbish product in terms of global ridicule when you compared it to the Espace and the Megan. Sales of these went up whilst the Z-Car stayed collecting dust. Cunning folks these French!

    Perfume is another example – no one knows whether anyone will like the smell of a new perfume until it is launched so to an extent it creates its own market on release. I can’t remember my daughter pestering me to write to Victoria Beckham asking her to get her skates on and decide to launch some scent in an expensive bottle, expensive box and backed by an expensive advertising campaign. Only Victoria knew that once her name was appended to anything with a reasonable smell, would it shift like sh*t from a shovel! Gabby? She’s remained loyal to Chanel at vast damage to my wallet but her palls all went out and bought something they’d never asked to be made and never asked for in a shop.

    Producing product without finding out whether the market needs it or even wants it is a giant leap of faith and most products fail. Take the Dyson triple vortex bagless vacuum cleaner. All of the major manufacturers couldn’t see the point – bags were cheap and easy to replace and who noticed that the “suck” dropped by 80% after about 5 minutes of use. What more, they had a vested interest in the manufacture of branded bags. So James Dyson was told to bugger off and instead he went and got the finance and made it himself. The first cyclone takes out most of the dirt (About 99%) the second takes out another 95% and the last about another 95% of the particles left – so little dust does this process leave in the air stream there isn’t even a need for a filter. No clogged bags or filters.

    Sure, the market “would like” no loss of suction (if It’d ever thought about it), no dust (Asthmatics only in the then market) but it didn’t want a price which would make the average buyer boggle. Boggle they did but they did not walk away (The market said the opposite from the surveys) They sold by the skip load, generated easy publicity – novel, techno chic, etc but designed for a problem you didn’t even think you had.

    When the mainstream manufacturers discovered that they had turned away a potential golden egg laying goose, they said, “What the hell, we’ll make one too” Well the market does not like imitators and Mr Dyson’s Lawyers liked them even less, so for another Giga-Buck of publicity and a Hundred mega Bucks of damages, he sued for patent infringement and won.

    That’s why other bagless vacuum cleaners still have that blasted air filter which needs cleaning every 10 minutes and why Mr Dyson can still sell a vacuum cleaner which the market never asked for the price of new silencer (not that it needs one) on the Bentley.

  • Posted by mgoodman on Moderator
    Thanks, BARQ, for a good example of the situation I described. The terms "market oriented" and "successful" need to be carefully defined.

    Twitter came up with a novel way to satisfy an unmet communication need. And a lot of people became users/customers. Whether the founder(s) understood the appeal prior to launch is irrelevant. Active and aggressive marketing -- or a formal marketing plan -- are NOT prerequisites for being "market oriented."

    And Twitter could be considered successful without a business model that includes long-term profitability.

    So there's a great example of how the definition of both terms -- "market oriented" and "successful" -- are central to answering the question.

    P.S. I do NOT agree that "nobody needed" Twitter. I think a lot of people needed it. They didn't envision that particular solution to an existing problem until it showed up, but their rapid embrace of the Twitter product indicates that people did have an unmet need for a free, portable real-time text communication medium.
  • Posted by mgoodman on Moderator
    Separate subject:

    BARQ wrote: "Most marketing is designed to separate one company from the rest of the pack."

    That's sad. It might be true, but it suggests that there are a lot of misguided marketers out there.

    Marketing is supposed to be about satisfying consumer or customer needs (and achieving some internal goals as a result). Gaining market share and customer loyalty are rewards for doing that well. When we focus too much on what competitors are doing, or how to "separate one company from the rest of the pack," we can lose sight of the real objective and get sucked into a "side show."

    It's important to remain "market oriented" and focused on what CONSUMERS need, rather than trying to be different from competitors simply to "separate one company from the rest of the pack."
  • Posted by mgoodman on Moderator
    Steve Alker so eloquently wrote: "I suppose that if all companies in a given sector produced exactly what their market research told them that their market wanted, then they’d all end up producing something which was remarkably similar."

    This presumes that they all commission the same unimaginative market research and take what they learn from the research at face value, without any creative analysis or attempt to gain insights into the unmet consumer needs.

    Consumers don't always know what they need. They know what their frustrations are with some products or situations, but they often can't foresee how to resolve those situations. That's why we have smart marketing consultants and professional market researchers.

    That's job security for us, Steve!
  • Posted by steven.alker on Member
    Michael – here’s some high level maths to the rescue of valid market research. There are a couple of reasons why professionally executed market research will still lead to differing outcomes in the new product design process. I’ll try to explain them briefly without baffling everyone!

    The first is the maths of Chaos. Chaos theory involves systems which are non-linear and contain feedback. As the results of market research or the interpretation of market research data are fed back into the design process, often with a minus sign in front of them if they are attributes you find to be undesirable, that means that your new product design process involve surveying opinion, and through the feedback process, squaring the numbers you obtain. So, you have negative feedback which is non-linear (A simple square in a feedback loop is non-linear – ask a fruit fly about its population model!)

    That alone doesn’t make the maths very complex but it does make the outcome impossible to predict unless you can measure your starting conditions to an infinite accuracy. As all market surveys and the decisions reached from the numbers have a recognised margin of error we can’t know those starting conditions to an infinite accuracy. It’s the same problem which faces long range weather forecasting – there, the models are good, the algorithms pretty sound and the accuracy of the input data is as good as science can provide but because the calculations are non-linear and involve feedback, tiny errors in measuring where you start from result in massive errors a few days down the line.

    In survey work and product development, we mitigate this by interposing a skip load of marketers, engineers and accountants into the loop and get them to chuck out the plainly barking-mad figures and consciously focus on the ones which make sense. So full marks to Mr Goodman – our jobs a secure and safe from being usurped by a computer programme, no matter how sophisticated the algorithms it deploys.

    The second reason why market research will throw up different design and product outcomes from the same data and the same class of questions is harder to explain, but it involves the maths of symmetry and the tendency of natural systems to favour symmetry breaking rather than the creation of more symmetry.

    Again there is a bit of chaos maths in the theory, but it is based on the fact that any sets of figures are not perfectly accurate and the tiny differences between one set of measurements and another will result in a different outcome once you put them into a process – linear and iterative or not. Professor Ian Stewart from the University of Warwick writes about this most eloquently in his book “Nature’s Numbers” which I am pleased to say is an equation free read!

    Symmetry breaking explains why the outgoing tide leaves ripples in the sand, why sand dunes form and why some dunes evolve crescent shapes. It also explains why a spherical frog-spawn does not produce a spherical frog and why the same set of figures when worked on by two different teams will result in a different outcome, without either of the teams making any fundamental mistakes.

    Once again we mitigate this by asking skilled marketers and engineers to chuck out the results which are tending towards nonsense (Rather like nature chucks out the spherical frog because it can’t survive) and thus we end up with different results from the same data. Once again, our marketing jobs are safe.

    I’d better finish this now, before the men in white coats come to take me away!

    Best wishes

    Steve Alker
  • Posted by steven.alker on Member
    BARQ no, no and no again. That was Frog's Porn

    IE: Naked frogs. That's another reason why spherical frogs never made it through evolution - they can't wear stockings, suspenders and 3 inch high heels!
  • Posted by mgoodman on Moderator
    I think we've hijacked Amanda's question. Maybe we ought to donate enough points to let her try again! :)

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