Marketing and the Waste of resources (Part 1)

Every year, billions of dollars is spent to promote the launch of new products. Unfortunately, over 90% of them fail. Even after months of market research, how come so many smart people are making so many dumb decisions? “The root of the problem is that the theories in practice for market segmentation and brand building are riffled with flawed assumption” states Clayton. In most companies, the current approach to marketing and product development is broken. When they develop a product, they try to solve the need of the average customer. Consequently, they end up developing a product that solve the need of no-one. Instead of leaving their office to observe people, both marketers and researchers/engineers rely mostly on demographic analysis and assumptions to build and promote their product; explaining the overflow of unnecessary products in our market.

The job of the marketers and researchers/engineers must be first to observe people and to figure out the need that their products aim to resolve. “The job, not the customer is the fundamental unit of analysis for a marketer who hopes to develop products that customers will buy ” state Clayton. Consumers/Users do not think in terms of products but in terms of need: physical, emotional, functional or social. I drink water because I am thirsty. I bought a toothpaste because the one I had is over. We got to change our current approach to marketing and realize the necessity to replace:

• assumptions by observations
• customer analysis by job analysis
• Interview of average user by extreme user

Providing cheaper products for customers to buy things that they do not need only lead to a misuse of resources. New opportunities are created only when innovative companies design a product and position its brand on a job for which no optimal product yet exists to paraphrase from Clayton. When a customer need a job, he must think of our product. We must position our product in terms of needs. It must also resolve a need. Our product must create value for our customer. The value, not the functionality, must dictate our strategic alignment and position.

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