The Harvard Marketing professor Theodore Levitt used to tell his students “ people don't want to buy a quarter-inch drill bit they want something to fill a quarter inch hole”. The point he was making was that the focus and demand creation practices of the product makers can be a long way from the needs of the customer. The problem is that engineers in companies still try to measure the market in terms of ‘drill bits’ and not ‘holes’ and they tend to have the most dominant voice.
The options for product development and portfolio development are simple for the companies. Keep investing in R&D, keep talking internally, keep gazing at the stars above hoping that the product created will connect with consumers. This is blind development and the reason why thousands of products fail each year. Alternatively, this process can be turned on its head. If the company and engineers focused on listening to the customers before the R&D and the product development then they would be closer to what the market wants.
The telecoms industry is a sector where the two processes were played out in the early 2000’s. In broad terms, the core product and the utility of a mobile phone handset were the same. All the manufacturers led by Nokia, Samsung, Sony Ericsson and Blackberry came to market promoted a mix of camera, music, SMS and basic email. It was the arrival of Apple and the iPhone that changed the market. In the main the utility and function of the iPhone were the same as what was available on the high street. It was the marketing and the understanding what the customers wanted which made the difference. This and the simplicity of Apple delivery of the product that was significant.
In the 'pre-iPhone' era, mobile phones would arrive with two booklets full of instructions, handsets were 80% of the time black and devices were marketed on the features and benefits. The iPhone arrived, no manual, easy to turn on and activate and the market was changed. Until this point, mobile phones were engineering devices. Black and functional with millions of details and benefits with which the engineers would educate the customer. Steve Jobs and Apple went the other way. Simple beautiful packaging, minimal instruction and an invitation for the customer to use and explore.
This simplicity was a bold change in breaking a barrier in the marketing of the product and in developing a customer base. The vital difference is in the subtext of the communication. Apple understood that the majority of consumers just wanted to use the product. The other manufacturers wanted to educate the consumers about the product and force them to the engineer's way of thinking. Apple was willing to allow consumers use the product to meet their needs. The other manufacturers were dictating what the utility should be and how they should use it.
It is an interesting case study because at the time there was not much variety in a product offering. The major product manufacturers were aware that consumers of the mass device were looking for a fashion item, a music player and something to call people with. The marketing people who knew this information failed to win the internal battle with the engineers. It took Apple to step in and provide what the market wanted.
Product developers and engineers tend to hold the power in a company and dictate the outcomes and delivery. However, this is not a success strategy as it fails to recognise that products have very different uses too many different people. There is the core product (the features and benefits the engineer made) and actual product the customer buys or think that they buy. The product developers and engineers will be stuck at the core product and many times are unable to see beyond this point.
On the other hand, it would be a foolhardy and high risk to allow marketing take over the management and development of product portfolio and planning. What is needed in many ways is a balance in the influence each department holds over the strategy of a company. Each skill set needs to be valued as key part of growing and building sales and revenue for the company. Then the company can move away from making drill bits.
Looking at the mobile phone market now Sony Ericsson no longer exists, Nokia was bought by Microsoft, Blackberry now just focuses on software and Samsung and Apple are still going. Did marketing make Apple great? No great products made apple great. Great products that were developed by listening to the market first.
Video Explainer of Marketing Myopia https://hbr.org/2004/07/marketing-myopia