Updated February, 2020.
As a Product Manager I love the words “market-driven”. They have purpose and connotations of real market intelligence (“customer-centric” sits in the same bucket). These words describe not only the end-product but also how we got there.
But what do these words really mean? What is a “market-driven” Product?
A two-tier definition of market-driven Product
Here’s two different ways of describing it:
- A “Firm’s policy or strategy guided by market trends and customer needs instead of the firm’s productive capacity or current products.” (BusinessDictionary.com )
- “Using market knowledge to determine the corporate strategy of an organization. A market driven organization has a customer focus, together with awareness of competitors, and an understanding of the market.” (BNET)
I like these definitions because they illustrate the two key parts of what makes up a market-driven Product:
- It’s a corporate strategy, and
- It’s based on understanding market trends and your customer
The definition of market-driven is dependent on both these points. If your company doesn’t believe in customer-centred design, then it’s unlikely to invest in understanding the market and your customers. Similarly, even if being market-driven is part of your corporate strategy, you’re not market-driven if you don’t take the time to gain an in-depth understanding of the market and your customers, more specifically your customers’ problems.
It’s more than just market research
Let’s focus on the second point – understanding market trends and your customer. It’s easy to say that a market-driven product is a result of market research. But market research does not really get to the heart of truly understanding the customer. It may give you a broad and important understanding of the changes in the consumer, technology and or business environment but it doesn’t offer sufficient insights into your customers’ lives and the problems they experience.
When conducting “market-driven” research, here’s some questions to include:
- Is there a customer problem to solve?
- What are your customers’ current behaviours, lifestyles, and aspirations? Are they likely to change as a result of your product?
- What experiences do your customers seek?
- What kind of quality of life do your customers want?
- What major trends are currently changing peoples’ beliefs, values and behaviours?
- What do customers need vs. want vs. ‘nice-to-have’?
- Under what different contexts will your customers use this product?
- How would you like your customers to feel about your product?
If we keep these questions in mind when we build our research programs, we can direct our customer research to include personal elements that will provide a better idea of who our customers are and what they really need.
The whole market environment
The customer is only half of what needs to be understood. You also need to understand the market as a whole. I like to think of a market as the sum of the interactions of all participants within that market (including your competitors). Understanding those interactions enables us to get a wholistic perspective of what is going on and helps us make important Product decisions like:
- Which is your most important target market
- How to differentiate your Product
- When to bring it to market
- Who should you partner with and who will you be competing with (both current and future)
There are a number of different tools you can use to analyse this but one I like is the PESTEL analysis. It’s not a new one, but I like how big-picture and comprehensive it is. You can quickly identify which factors are relevant to you and then analyse those in more depth. You can also identify strengths and weaknesses and go further with a SWOT analysis.
If you’re looking for help with this there’s a lot of blogs and articles out there, Professional Academy has a pretty succinct description.
From market research to market-driven
If you translate your market research into market requirements, and then meet those market requirements with Product requirements you can be certain your end-product has truly been created by the target customers and the market.
If you do this well, now all you need to do to make your millions is build a great Product!
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