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December 2, 2013 The Rainmaker

Market focus or product focus

Ken Cook
By Ken Cook

When you look at your company, ask a simple question — are we market focused or are we product focused? For most businesses it is not an either/or answer. There is usually a blend that drives strategies and decisions. However, one perspective is usually dominant. Let's take a look at each perspective.

A market-focused business looks outside the company for the input and data necessary to make strategic and tactical decisions. Market focus means understanding your customers. It means knowing your competitors, and anticipating their next strategy or tactic. Market focus means knowing the overall dynamics and forces in the marketplace, and understanding how those forces might impact the business.

A product-focused business looks at their offerings, and strives to continually improve them. There is a zeal to make a product or service better, and the strategy of the business revolves around differentiation tied to product superiority.

Market focus seeks to identify opportunities and then capitalize on them. Product focus identifies improvements that will lead to competitive advantages. Both areas of focus are necessary. The challenges with a product-dominated focus is discovering critical information too late and falling behind in the competitive race. Growth slows because there is a delayed response to the dynamics of the marketplace.

A market-focus perspective offers the best pathway to sustainable and profitable growth. Market focus is all about opportunity. Where are there needs? Where do customers spend money? Once you know that, then you focus on products to satisfy those needs.

Three factors that enable a market focus are clarity of vision and action, marketing investment, and situational responses.

Clarity of vision and action means setting a direction and vision for the company, and then converting that clarity into daily activities. Think about priorities. Market focused clarity means considering the customers and the marketplace first. When faced with a decision ask — How will this decision impact the customers? What does this decision mean in terms of the customer's relationship with the company? Market-focused clarity begins with the customers and the marketplace, and the decision making process proceeds from there.

Recognize that the daily activities of a company define its market position. Why? Because activities are what customers see and react to, and it's a customer's action (or inaction) that ultimately defines success. If activities reflect vision, strategy becomes reality. Continuity from vision to daily activities produces a clear synchronization between who you want to be and who you are.

Think of marketing as an investment. Sergio Zyman, the former VP of Marketing for Coca-Cola said — When you understand that marketing is what you do to sell stuff, then the money is an investment instead of an expense. Marketing builds understanding, connections, and relationships with the marketplace as a whole, and with individual customers. This understanding and feedback should drive strategy, product development and growth plans. Without investment in marketing, it's unrealistic to expect any long-term and sustainable synchronization between your vision and what the customer will buy.

Market focus entails responding to situations, when appropriate. Being outwardly focused, investing in marketing, and being driven by market information yields decision points. If customers' needs change, what is the appropriate response? If a new competitor enters the arena, how should they be dealt with? If new channels and connections with customers are available, should they be used? For a market-focused business these decision points are connection points with customers and potential moments of change. Think of these decisions as opportunities to challenge assumptions, assess priorities, and decide if a change is warranted.

After a company reaches a market-focused frame of operation, the hardest part is continuing to make the daily decisions that perpetuate that vision. Distractions are going to occur, and some of them are going to be big. Trust in the vision and the daily activities established to enable that vision. A market-driven focus is a demanding taskmaster, but the rewards and growth potential make the investment worthwhile.

Ken Cook is the Managing Director of Peer to Peer Advisors and Co-Author of How to WHO: Selling Personified, a book and program for building business through relationships. Learn more at www.howtowho.com.

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