Question

Topic: Strategy

Should A Tech Company Be Product Or Market Driven

Posted by Anonymous on 11/7/2004 at 3:46 PM ET 250 Points
as a tech company moves forward with its go-to-market plans to capture new shifts and trends -- should it build it's programs/plans around the product(s) -- or build the programs/plans around marketing?
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  • Posted on 11/7/2004 at 10:30 PM Member
    Customers unfortunately don't buy products, they buy solutions _ the classic marketing story about a man who walks into a hardware store and asks for a drill, what does he want?

    Most likely a hole in the wall, which can be 'solved' by any number of solutions not just the drill. If your product oriented you may end up making the best drill, but if somebody comes up with a better solution nobody is going to buy your drill (and u probably won't be able to work out who your competition is...!)

    The mouse trap is equally illustrative of this principle - sure there are very sophisticated mouse traps out there (designed by product oriented firms), but the old 0.95 cheapie still dominates market share - why because it does the job ( at a value propostion the customer likes)

    If the go to market plan is to capture new shifts and trends (especially) how can you do it with a product orientation - the new trends you identify will be those chosen by your R& D staff - if these are the same ppl who buy your product then ok - but i think you might find they are not

    being market oriented is about engaging in a dialogue with your customer and realising that they will use your product however they what ,therefore 'co-creating' the value they ascribe to your market offering... watch how they use it, and then even better ask them why they used it like that, you might get the jump on the rest of your industry ('cos i have an inkling that despite the professed market orientation of most companies they mostly are product oriented.

    For a better insight (and explanation) of these idea's you may be interested in reading an article by Vargo and Lusch in the Jan 2004 issue of the Journal of Marketing, or some of Clayton Christensen latest work.

    Think about the last thing you purchased, was it because of what it does OR what it does for you...
  • Posted by koen.h.pauwels on 11/8/2004 at 1:49 PM Member
    The short answer is that both product and customers matter - but your particular situation suggests that 'products' may be more important than 'marketing' (if the latter means a very long and detailed questioning of customers). For many new shifts and trends, (potential) customers can give little concrete guidance as to their wishes and willingness to pay. In of being 'market driven', the company could be 'market-driving' (see Kotler's articles for these concepts and examples), and adopt a 'probe and learn' method (see articles by Danneels) to bring out a decent new product, and then update it according to what it learns from marketing it). Finally, I also believe the the relative attention depends on what the company is already strong at: you need both great products and customers, and will have to bring in expertise to compensate for your weakest link.
  • Posted by mgoodman on 11/9/2004 at 7:02 AM Accepted
    I think you probably need to do both.

    Obviously the company's heritage is rooted in product expertise. But after a while that becomes old news, and the magnitude of future technological breakthroughs is likely to be much smaller and less dramatic.

    That's when you'd like to have a way to breathe new life into the business by modifying the offering to add value based on a deeper understanding of your end-user customers.

    This is a very common issue among technology-driven companies as they mature. The company is founded based on a great product. As it grows and matures, the "miracle" becomes accepted and taken for granted, and the growth curve flattens out. (All the early adapters have satisfied themselves, and perhaps there's a new kid on the block.)

    That's when the [new] managment looks to marketing as a discipline that might help restore growth. The problem is that marketing takes a while to be really effective, so it should have become the focus several years ago.

    Alas, the question: Is it too late? Is it worth trying to become market-driven [at this late date]?

    My answer is "yes." The company is going to be 5 years older in 5 years whether you do or not. Think how much better off you'll be in 5 years if you make the investment now in mastering not just your product but your target market as well.

    Of course, you're asking the question of a group that has an obvious bias, so this probably won't surprise you a whole lot!
  • Posted by telemoxie on 11/9/2004 at 8:53 PM Member
    If it were me, I would not focus on products nor on markets, but on better serving customers.
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