Each year 30,000 new consumer products are launched — and 95% of them fail. The problem, in part, is that most companies segment their markets according to product category or customer demographics, neither of which is very effective. Products are more likely to succeed if companies segment their markets according to “jobs-to-be-done”— addressing the basic problem a customer is facing and providing a product that can deliver the necessary result. Each job has functional, emotional, and social dimensions. In a case study a fast-food restaurant chain wanted to improve its milkshake sales. The company started by segmenting its market both by product (milkshakes) and by demographics. Next, the marketing department asked people who fit the demographic to list the characteristics of an ideal milkshake (thick, thin, chunky, smooth, fruity, chocolaty, etc.). It turned out though that most customers bought (the milkshake) to do a similar job. They faced a long, boring commute and needed something to keep that extra hand busy and to make the commute more interesting. Understanding the job to be done, the company could then respond by creating a morning milkshake that was even thicker (to last through a long commute) and more interesting (with chunks of fruit) than its predecessor. Several major companies have succeeded with a jobs-to-bedone mechanism.
The problem often is that their creators are using an ineffective market segmentation mechanism,according to HBS professor Clayton Christensen. It's time for companies to look at
products the way customers do: as a way to get a job done. Key concepts include:
• Products are more likely to succeed if companies segment their markets according to "jobs-to-be-done"--addressing the basic problem a customer is facing and providing a product that can deliver the necessary result. Each job has functional, emotional, and social dimensions.
• Companies can also apply the jobs-to-be-done approach to product branding. A "purpose brand" clearly reflects the job that a product does, such as Kodak's FunSaver brand of single-use
cameras, which performs the "job" of preserving good memories.
Several major companies that have succeeded with a jobs-to-be-done mechanism: FedEx, for example, fulfills the job of getting a package from here to there as fast as possible. Disney does the job of providing warm, safe, fantasy vacations for families. OnStar provides peace of mind.
Procter & Gamble's product success rate rose dramatically when the company started segmenting its markets according to a product's job, Christensen says. He adds that this
marketing paradigm comes with the additional benefit of being difficult to rip off. Nobody, for
example, has managed to copy IKEA, which helps its customers do the job of furnishing an
apartment right now.
Christensen also cites the importance of "purpose branding"—building an entire brand around a particular job-to-be-done. Quite simply, purpose branding involves naming the product after the purpose it serves.
Some indigenous examples:
- Daag achey hain campaign- by Surf Excel
- Learn English campaign- by Tata Sky
- Maggi moving from just be instant noodles to noodles which are also nutritious (vegetables and atta)
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