Harvard 3
Introduction
Marketers often focus excessively on narrow demographic segments and trivial product extensions instead of recognizing the essential jobs consumers need to get done. This approach leads to failed products and ineffective marketing strategies. This article by Clayton Christensen, Scott Cook, and Taddy Hall presents a call for a new marketing perspective focused on understanding consumer jobs, which can drive meaningful product development and branding.
The Problem with Current Marketing Practices
High Failure Rate of New Products
An astounding 1,000 new consumer products are launched each year, yet over 90% fail.
Marketing professionals invest significant resources into understanding customer desires, yet they often misinterpret consumer needs.
Fundamental Paradigms are Broken
The prevailing marketing paradigms that focus on demographics, market segmentation, and brand development are fundamentally flawed.
Even industry leaders like Procter & Gamble's CEO A.G. Lafley recognize the necessity for a revolutionary approach to marketing that centers on producing meaningful products that resonate with consumers.
Rethinking Market Segmentation
Theodore Levitt's Insight
Harvard marketing professor Theodore Levitt famously noted, "People don’t want to buy a quarter-inch drill. They want a quarter-inch hole!"
Marketers often miss this insight by segmenting markets based on the type of product instead of the job it fulfills.
Example: Focusing on drill types instead of holes leads to product improvements that do not resonate with customer needs.
Ineffectiveness of Demographic Segmentation
Segmenting markets based on demographics (age, gender) can mislead marketers into creating products that fit a stereotype rather than the unique needs of individual customers.
Marketers cannot accurately predict if a specific individual from a demographic segment will purchase a product; they can only assess likelihood probabilistically.
Relying on typical customer profiles may cause marketers to miss actual consumer needs and create products that don’t help customers achieve their desired outcomes.
Jobs Perspective as a Solution
Job to be Done Theory
Consumers hire products to perform specific jobs in their lives. Understanding these jobs leads to innovative products and effective marketing.
Marketers must discern what jobs arise in customers’ lives and devise products that efficiently address those tasks.
Successful product development pivots around customers' jobs rather than traditional demographic markers.
Case Study: Quicken Financial Planner
Scott Cook's Quicken Financial Planner in the mid-1990s is a cautionary tale of misjudging consumer needs.
Despite high retail sales, it generated less than $2 million annually.
This failure resulted not from price or design but from the misunderstanding that creating a financial plan was not a prioritized job for most families at that time.
Designing Products That Fulfill Jobs
Dimensions of Jobs
Each customer job comprises social, functional, and emotional dimensions. Understanding these aspects allows marketers to create targeted products.
The job itself should be the central analytical unit rather than the customer.
Milkshake Example
A fast-food restaurant attempted to increase milkshake sales through product tweaks based on customer demographics, yielding no positive result.
A new researcher observed customers purchasing milkshakes primarily in the morning during solo commutes, realizing these consumers hired milkshakes to alleviate boredom during long drives.
Alternative options (bagels, bananas) did not fulfill the job of making the commute interesting, while the milkshake successfully did this.
By understanding that milkshakes served two distinct jobs (morning commuters and parents with children), the marketer aimed improvements to the milkshake’s attributes effectively addressing customer needs, thereby driving growth.
Expanding Product Categories through Job Definition
Growth through Job-Focused Innovation
Companies that design products focused on jobs discover larger markets than if they segment by traditional product categories.
Sony's innovation strategy, under Akio Morita, exemplified this as they sought to enhance how consumers could achieve various jobs through miniaturization of electronics.
Organizational observations captured consumer needs, leading to successful product development and innovation like the Walkman.
Similarly, Arm & Hammer revitalized its baking soda brand by creating a family of products addressing diverse jobs
Examples of jobs include:
Freshen mouth with toothpaste
Deodorize a refrigerator
Clean carpets
Freshen laundry detergent
Deodorize kitty litter
Building Purpose Brands
Purpose Brands Defined
A purpose brand is not just a product name but is deeply linked to the job it serves.
The historical success of Federal Express illustrates how strong purpose brands are built, becoming synonymous with reliable, swift delivery services.
Notably, many successful brands like Kleenex and eBay originated as purpose brands that did specific jobs effectively, leading to strong consumer loyalty and equity.
Disruptive Innovations and Purpose Branding
Companies fear introducing disruptive innovations that may impinge on existing brand value.
However, implementing purpose branding can mitigate these risks by clearly defining new, specific jobs that these innovations are designed to fulfill.
Examples include Kodak's successful transition with single-use cameras marketed under the KodakFunSaver brand and the Kodak EasyShare camera focused on sharing fun.
Advertising's Role
Clarifying Brand Purpose
Advertising should inform consumers about a product’s capability to accomplish a specific job rather than attempting to build a brand in an abstract sense.
Unilever’s Soupy Snax campaign enables workers to discover a product tailored to improve post-lunch productivity by clarifying the job it serves.
Effective advertising defines the job and elevates consumer awareness to assist in product adoption, leading to successful branding outcomes.
Avoiding Brand Misalignment
Marketers should not rely solely on advertising as a means to establish brand value; products must be designed with clear job objectives in mind as well.
Brands like Disney and eBay demonstrated success built prior to extensive advertising, indicating that solid product offerings lay the foundation for genuine brand value.
Brand Extensions and Equity
Rules for Extending Brands
Marketers can extend a purpose brand successfully in two ways:
Creating different products that address a common job.
Identifying new, related jobs and crafting new purpose brands leveraging the original's endorsement.
Example: Sony's Walkman expanded into various portable music devices while maintaining its core job focus.
Conclusion
The Path Forward for Marketers
Many companies lack a coherent strategy for developing purpose brands despite the substantial benefits they offer in differentiation and growth.
When marketers break free from the conventional approaches and recognize the essential jobs consumers aim to fulfill, they can build stronger brands that align with customer intent, improve market value, and foster growth within their businesses.
This new paradigm will undoubtedly lead to increased customer satisfaction and successful product innovations that resonate with their intended audience.