The Two Dimensions of Market Orientation

This is a post by Ralph Christian Ohr ()

Recently, I was reading an interesting HBR article, named: “Meeting the Apple Game of Customer Perception” by Ndubuisi Ekekwe.

The key paragraphs for me were:

“But meeting customer needs is not enough. You must exceed needs if you want to remain relevant. Technology disrupts the habits of the customers so quickly that if you focus on needs, you will never be an industry leader. You can’t keep early adopters loyal by just meeting their needs. They want more from you.

They want you to understand their expectations. Even if you have met their needs, they want more. Your heating customers want green solar energy, but all they can afford is dirty coal so that is what you give them. You have met their immediate needs, but they expect you to do more, quickly. Agile firms serve that expectation and retain their customers.

While expectation can help you stay in the game, top firms meet the perception of customers. Perception is the king of business. Unfortunately, few firms get to that level. Perception is providing to customers what they never expected or imagined they needed.”

This reminded me again of the following: market orientation is two-dimensional. For companies it’s required to:

  • meet existing needs and expectations that customers are aware of,
  • anticipate needs that customers are not (yet) aware of (perception).

Both requirements correspond to distinct capabilities, timelines and approaches. Meeting existing needs tends to happen on a short term range and often leads to innovation derived from current markets. Anticipation often addresses future needs and is the basis to create new markets. Some companies have the propensity towards developing and exploiting existing markets. Others, such as Apple, are primarily targeted at tapping new markets by offering novel ‘proposals’. Successful companies of the future will most likely be able to combine both capabilities – in order to serve innovators, early adopters as well as the majority in the innovation diffusion cycle.

At the end, economic success is fueled by deeply understanding customers and empathy-driven innovation.

What do you think?

Enhanced by Zemanta

Next Article

Innovation posts of the week: The Innovation Matrix

The Innovation Matrix is a sketch by Tim Kastelle that helps explain how organizations get better at innovation