- January 8, 2022
- Posted by: Christina Milian
- Category: B2B
Many people ignore the importance of having a product-driven business approach compared to a customer-driven business approach. This is because of their thinking that business operates for two primary purposes: growth and profit. So, it does not matter whether it is product-driven or customer-driven.
Business experts never agree with this as there is a fundamental difference between these two concepts. This distinction can show a real difference in how business managers must run their business, affecting their decisions.
But why is there a need to differentiate one approach from the other? Why does it matter when the only purpose of any business is obtaining profits? We should keep in mind that profit is only one of the crucial aspects of running a business, not the only aspect.
The must-have solution is lacking.
No two businesses are alike, and half of the marketers are still running without a marketing strategy. As per a study conducted by Smart Insights, only 35% of the companies are clear with an integrated approach into an overall marketing strategy. Whereas 16% say, they don’t have any defined plan. 50% of the companies don’t have any system at all.
If you’re an existing business and have no idea how to drive success and whether the company will make money or offer an ROI, you must learn to leave the old methods behind and develop an in-depth content-marketing plan.
What are product-driven and customer-driven marketing approaches?
Which one is better? A product-driven approach or a customer-driven system? It is an age-old debate. Knowing which one is a beneficial product-driven or customer-driven process comes in handy.
Let us discuss the main difference between the two approaches to know which one is better for your kind of business. Before drawing up the business strategy, an entrepreneur must decide what type of business they want to make – whether product-driven or customer-driven. The solution to this question offers a clear picture of the business direction.
The business direction is not permanent as companies often make critical decisions to redefine their industry, resulting in operational focus and the business structure. This means companies can change their direction from a product-driven approach to a customer-driven approach or even vice-versa. So, every business needs to have people who can quickly identify the distinction between the two approaches and help in facilitating the change within any business.
Product driven business approach
A product-driven approach means a business develops a product first and then starts searching for the niche market for the product’s existence. As per this approach, when a great product is created, it develops an appetite in the market, thereby attracting some top-class consumers, making industry and gains for the whole business.
In a product-driven business, you can expect a group of skilled innovators headed by a senior leader. This group collaborates and maps their minds to create and nurture some of the best ideas focusing on product development. Here the expectations, requirements, and choices of customers and other end users are not given importance. Focus is more on the design, abilities, features, and manufacture of products.
Each product is considered a specific business within the whole business with particular people and departments assigned to them. Apple is one of the great examples of this approach. Sales and marketing methods are given much importance in a product-driven business as they are dependent on creating product awareness to do business.
Some of the essential strategies of a product-driven business are
- Mass marketing: A product-driven company assumes a big pool of consumers highly interested in that particular product they want to bring into the market. This is why mass marketing is one of the most effective and cost-efficient ways of creating awareness for a large pool of businesses.
- Maintain uniqueness: In a product-driven business, distinctive and unique products are created.
- Positioning is important: If the product created is not unique, then it should be positioned to remain attractive in the whole market. For instance, a product-driven business invests highly in creative marketing techniques to generate a professed point of difference.
Examples of product-driven business
- Apple: One of the most famous brands for iPhones, iTouch, iPad, and MacBooks are based on a product-driven approach. The company has always focussed on delivering quality products.
- Amazon:another brand that focuses on a product-driven strategy is amazon. With a tremendous amount of data available, the company very well knows its next move.
Customer-driven business approach
A customer-driven business approach collects valuable insights about consumers to form a strong basis of product development on par with their requirements. As the name says, it is all about the customer. Focus is more on what customers like, dislike, what can be done to make customers happy and how they can solve any issues related to their customers.
A business that adopts a customer-driven approach runs on the assumption that it cannot continue business if consumers are not satisfied with the product. Therefore, it is imperious for every party in the industry to ensure that the product manufactured is of high quality mixed with the best customer service.
The process of product development starts with market research focusing mainly on consumer needs and preferences. Then this insight is combined with business insights to generate product prototypes that address consumer requirements. Compared to the product-driven business approach, marketing is more minor the customer-driven. Here, the product has been produced by keeping the customer in mind, for which there is a pre-established appetite for the full effect.
Few strategies of a customer-driven business approach are:
- Time is the main essence: In a customer-driven process, it is vital to be first in the market to generate brand authoritativeness. They focus more on fast turnarounds, quick responses, next-day deliveries, etc.
- It is all about reliable convenience: The product should be flexible and convenient in a customer-driven approach. If it is not easy to use or get, it can’t be utilized or purchased.
- Where is the value-added: Best consumer services, convenience, and product flexibility is not the only requirement; a customer-driven business approach must strive to attract and obtain customers. They are also required to add some intangible value. These intangible benefits assist them in achieving standout and an obvious point of difference between them and the whole competition.
Whether product-driven or consumer-driven, all businesses must have a whole process to deal with the consumers. This is mainly vital for a customer-driven business approach.
Examples of Customer-driven business
McDonald’s- When it comes to delivering a great customer experience, McDonald’s has always been good at building a customer-centric brand. For example: “Happy Meal” is one product that offers a great experience with great food
Samsung: It is one of the most popular customer-driven brands today. Today, very well Samsung is the most significant tech business and has always been profoundly interested in delivering the best customer care and after-sales services.
So, what is the main difference between a customer-driven business approach and a product-driven business approach? In a product-driven business approach, product development starts from internal insights of the company, while in a customer-driven approach, product development starts from outside of the business.
A product-driven business never assumes that there are several customers for their product, and they make an investment in marketing and plans for attracting customers. In contrast, consumer-driven companies develop products keeping consumers in mind.
Wrapping up, none of the two approaches is better than the other. It depends on the business type and the product that the specific business desires to bring into the market.