These series of guest posts are written by the teams attending the Tetuan Valley Startup School 2011 Fall edition. This post is written by Alfonso Gómez-Jordana, the developer of Groupject.
Abstract: Wonder why nobody is buying your stuff? Why nobody is using your awesometastic free web application? Maybe nobody finds it useful, worthy or entertaining, but you. This article covers two different strategies your company can take: product versus customer oriented marketing, and why you should choose one among the other.
I must first clarify that when I speak about marketing, I do not mean advertising, although the latter has part in the former. Marketing is the discipline that involves all the processes and decisions taken by companies to approach their market. So, inside the marketing sack you will not only find advertising campaigns, but also market research, business development, etc.
Pic totally unrelated
Towards the end of the 19th century, marketing has been considered a discipline, constantly evolving to match customer tastes:
- At first, and until the 50′s, companies practiced a production oriented marketing: they focused their efforts in being the most efficient producers to obtain the best costs among their competitors.
- However, with the pass of time people started getting wealthier, and started taking into consideration quality apart from price before choosing to buy a product. So companies had to switch their marketing orientation from production lines to the product: the focus now was to make the best quality product, hoping for it to be sold by itself.
- On parallel, a more aggressive approach appeared that was sales orientated: companies without a good or cheap product, but with a very convincing salesforce. Examples of these you may think of are door to door encyclopedia sellers.
- And, from the 70′s onwards, at last customers got what they wanted: companies started to orientate themselves among their clients; they listened to them (through market research and feedback mechanisms), and developed the products they’d like to buy.
Nowadays, the situation is that most companies apply the latter approach. Take Coca Cola for example. Why did they start selling Coke Zero? Not because it’s cheaper to produce, nor because it’s a better quality product. It is because their marketing team discovered that customers demanded a zero sugar Coke. And how did they guess it? Through extensive market research, that not only defined the idea, but also its design, taste, etc.
Big companies like Coca Cola are not the only ones that use market research effectively. There are many successful small businesses, like shops, cafes, and even eBay retailers. Universities teach that this is the correct way to market. But, there’s always a but. Please think about the most valued IT company at the time being (year 2011): Apple. Do you think they went out to the streets, in the year 2001, and started asking people what would they like for playing music, and that they got answered “a portable mp3 player, with a tactile wheel as a controller and very minimalistic design”? Even if they had asked for less specific information, chances are that the results of the research would have turned negative, for example, in aspects such as the tactile wheel. Another example of this is Sony’s Walkman [2], which was forecasted by market researchers before its launch to be a complete fiasco. Both of them should have suffered the bad turnarounds of the so-called ‘marketing myopia’ of product orientation, but both of them became huge milestones in the consumer music industry with enormous sales and benefits.
- So, what is the deal then? Which approach should I adopt when working on my startup!?!
Well, the deal is, it depends. If you consider yourself a visionary such as Steve Jobs and think you have great idea that, although people wouldn’t understand it at first, they would love it. Then go for it! Good luck! But don’t come crying afterwards. On the other side, if you are just beginning in the startup world, and feel like you want to play it safe, research your market beforehand. You may want to ask your customers if they’d be comfortable wearing a pink hat before investing all your savings in a pink hat factory.
