In the fast-paced world of consumer products, it is startling to learn that over 90% of new products fail despite extensive market research and substantial marketing budgets. This phenomenon, often referred to as marketing malpractice, is rooted in outdated and ineffective market segmentation practices. As Clayton Christensen, Scott Cook, and Taddy Hall argue, the core issue lies in how companies understand and address their customers' needs.
The Problem with Traditional Market Segmentation
Traditional market segmentation involves categorizing customers based on demographics, psychographics, or behavior patterns. While this approach has been standard practice for decades, it often fails to capture the true needs and desires of real people. "We’re using misguided market-segmentation practices," the authors state. "For instance, we slice markets based on customer type and define the needs of representative customers in those segments. But actual human beings don’t behave like statistically average customers".
The consequence of this misalignment is the development of products that do not resonate with consumers, leading to high failure rates. Procter & Gamble CEO A.G. Lafley encapsulates this sentiment by saying, "We need to reinvent the way we market to consumers. We need a new model".
The Job-to-be-Done Framework
To address this issue, Christensen and his co-authors propose a paradigm shift: instead of focusing on the "typical" customer, companies should identify the specific jobs that consumers want to get done. This approach, known as the job-to-be-done framework, emphasizes understanding the context in which customers use products and the outcomes they seek.
For example, FedEx's success can be attributed to its clear purpose of fulfilling the "I-need-to-send-this-from-here-to-there-with-perfect-certainty-as-fast-as-possible" job. This clarity in purpose made FedEx a reliable and convenient choice, so much so that "FedEx" became a verb synonymous with fast and dependable delivery.
Creating Purpose Brands
A purpose brand is a product or service designed to perform a specific job for consumers. These brands act as a two-sided compass: they guide customers to the right products and direct companies in developing and marketing those products. The payoff is significant—products that consistently meet customer needs and brands that achieve sustained profitable growth.
One illustrative example is a fast-food restaurant's attempt to boost milkshake sales. By observing customers, researchers discovered that many bought milkshakes to make their morning commute more enjoyable and to stave off hunger until lunchtime. This insight led to practical product improvements, such as moving the shake-dispensing machine to the front of the counter and offering prepaid swipe cards for faster service.
Effective Advertising and Brand Extension
Advertising plays a crucial role in linking products to the jobs they perform. Effective ads clarify the nature of the job a product does and reinforce its purpose. For instance, Unilever's SoupySnax initially generated mediocre results. However, when the product was renamed SoupySnax-4:00 and marketed as a solution for afternoon lethargy, sales soared. Consumers identified with the problem and saw the product as a solution.
Extending a purpose brand requires careful consideration to avoid diluting its value. Companies can either develop different products that address a common job or identify new, related jobs and create distinct purpose brands for them. Sony's various generations of the Walkman, designed to help consumers "escape the chaos in my world," exemplify the former strategy. Marriott's range of hotels, each tailored to different traveler needs, exemplifies the latter.
Marketing malpractice is a widespread issue, but it is preventable. By shifting focus from traditional market segmentation to the job-to-be-done framework, companies can develop products that truly meet consumer needs. This approach not only enhances customer satisfaction but also drives sustainable business growth. As the authors of the Harvard Business Review article conclude, understanding what jobs customers want to get done is the key to turning innovation and growth into a predictable and repeatable process.
