Three Key Differences“Market driven products” has become another overused phrase that has reached white noise status.
In the purest sense though, market driven products is a valuable concept in that every product should be born and evolve based on needs of a broad market. But this concept can either work wonders or wreak havoc on growth depending on your interpretation and subsequent execution, especially if your products target the same or similar market segments.
Market-driven products, if taken literally, could result in multiple product silos with competing goals and contention over product development, marketing and sales resources that ultimately slow revenue and market share growth.
Market-driven product companies take the “whole is greater than the sum of the parts” approach to create higher value multi-product solutions for named market segments that ultimately accelerate revenue and market share growth.
Here are three key differences between market driven products and market driven product companies. 1. Market Perspective Market Driven Products – Each product is driven by its own market assessment and is usually limited to trends within a horizontal product category. Additionally, executives, business development and marketing may also conduct market assessments to drive other initiatives that could eventually clash with the product direction.
Market Driven Product Companies – The organization (including products) is driven by a single view of the market that encompasses vertical, horizontal and operational trends as well as forecasted growth and revenue potential in each market segment. The result is a single interpretation of the market that will simplify priorities across product, marketing, sales and operations teams. 2. StrategyMarket Driven Products – Each product forms its own strategy and roadmaps independent of other products. The ensuing competition for mindshare and resources becomes unmanageable and results in misdirection at many levels and poor utilization of resources.
Market Driven Product Companies – A single company strategy is driven by market segments that best support short and long term goals. Product roadmaps, marketing strategies, sales planning, finance and operational infrastructure follow suit. It exemplifies the metaphor, “everyone on the same page.” 3. Product Release CyclesMarket Driven Products – Each product has its own release schedule and competes with other products for development and marketing resources to be successful. Usually, no one product gets the lion’s share of resources and everything progresses at a mediocre pace. Marketing messages reflect product silos and sales people sell products they’re most comfortable with. Revenue can go in either direction.
Market Driven Product Companies – The lion’s share of resources go to products that will generate the most revenue from one or more market segments. Some products may get very little or nothing in any given release cycle. Marketing messages are segment specific and sales teams sell higher-priced multi-product solutions that cater to specific to industry issues. Revenues consistently go north.
So don’t take the notion of market-driven products literally. You may be frustrated by the results. Use a single view of the market to drive every facet of your product company. You’ll love the results. If your company has numerous "market-driven products" residing in disconnected silos, sign up for Product Management University - Portfolio Management and learn how to become a market driven product company. Come away with the formula to make it happen.
|
Resources 
