The Difference between Market Strategy and Marketing
Whether it’s a misconception, or a conflation, there are actual and distinct differences between Marketing, and Strategy
Whether it’s a misconception, or a conflation, many can’t see the distinct differences between Marketing, and Strategy
Perhaps it’s one of the reasons businesses struggle with product success, that fall well below the level of random chance (50/50). Market research is often performed under the umbrella of the Marketing function. I base this on nearly 25 years in the CRM industry where I worked with many customer facing teams (including Marketing teams) and also a simple google search.
We can see by this simple definition that it includes “market research.” I agree, to find pathways to potential customers, research needs to be done to locate them — if you don’t already know.
To me, marketing is entirely about generating interest in a given value proposition. That’s about it it. What’s really scary is the formidable landscape of Martech out there. All solutions designed to meet the needs of marketers…who are struggling to generate demand. The obvious answer is more marketing technology, right?
While this is great for marketing technologists, I’m sure many marketing leaders are biting their nails trying to understand why none of this is really working. Or maybe they don’t get this, which is why this solution-path continues it’s horrific and accelerating growth.
The vendors LOVE it!
At the end of the day, the data doesn’t lie, product failure rates have not budged, nor has the level of wasted capital (money spent chasing ideas).
Feeding Martech with hopes and dreams
What passes for market research today is questionable at best. It’s created through brainstorming and ideation workshops, focus groups, and/or qualitative interviews with customers. It’s hard work, because people know they need to look busy when they aren’t hitting their numbers.
The end result is a design exercise for the deliverable culture. Sometimes we’re working to promote solutions that already exist, other times it’s done by a startup that wants to build an app. In both cases, a solution is already envisioned and the idea (especially for the latter) is liberally promoted by methods that embrace one side of the binary result spectrum…failure.
While these look nice, and do tell a story, they conflate assumptions with unmet needs. They assume we all have the same unmet needs and are trying to get the same jobs done, in the same context (or circumstance). Even “getting out of the building” can’t help you iterate to success because your initial starting point is simply not valid (unless you’re really lucky like Mark Zuckerberg).
These do very little to gain a more discrete understanding of a solution-agnostic market, the groups (segments) within the market sharing the same unmet needs, or the ability to facilitate an understanding of changes as they occur in the market over time — as new competing solutions and constraints arise.
In other organizations, market research can look like this…
Source: Market Segmentation (McDonald & Dunbar)
There is a lot of work that goes into this summary canvas. It’s clearly an exercise for those that are more numerically inclined. I think of it as old-school; and therefore more data-oriented than what we’re seeing today.
Unfortunately, I haven’t met any marketing professionals who have done an exercise like this (other than the one who introduced me to this). I’m sure they’re out there, I just haven’t met them, or they have all died-off.
The method above is really cool as I look at it technically; but it has a couple of flaws as well.
First, it defines the market around a solution, and sizes it accordingly.
Second, it uses the traditional approach to segmentation using the solution-focused definition of a market.
Otherwise, I love the rigor, and it can help marketers pave a path to demand. It just assumes that the existing value proposition is going to be a cooperating partner; and that we can simply back our way into the appropriate marketing message with…deep qualitative market research (using deliverables like the hassle map above).
With a few minor changes (just as I suggested for the front-end of design thinking), frameworks like this are critical in understanding messaging pathways to users, decision-makers and buyers. They’re just not good at market strategy.
The key thing to remember (see definition above) is that Marketing is essentially an exercise in generating demand. It’s purpose is not to determine what products or services should be offered. While feedback from customers should come from every customer-facing team to fine-tune the program, the Marketing organization’s core objective is very, very simple.
Find groups of people who share unmet needs that your value proposition satisfies, and inform them that it exists, and how to find it. How you do that is another matter.
The Separation of Capabilities
I believe we should operate under a simple assumption: multiple, distinct capabilities are required in order to go from identifying market-level opportunity (strategy), to developing solutions that satisfy that opportunity in discrete ways (design/build), to identifying each individual opportunity to create demand (marketing). Which then leads us to another distinct capability that converts this demand to revenue (sales).
Market strategy doesn’t happen after the product goes to market
Distinct capabilities required to help potential customers get a job done
While many of those roles get blurred (wearing many hats) in the startup world due to a scarcity of resources, inevitably they begin to separate as an organization matures. It doesn’t matter what internal banner they fall under. They are distinct (and you’re either good or bad at them). Typically, no one can be an expert in the execution of more than one at any point in their career.
The goal of market strategy is to find market opportunities. Notice that I used the word “market” and not “product.” Professionals that are good at designing microinteractions into a product or service, for example, are undoubtedly not the same professional you want to abstract their thinking away from specific solutions — or technologies — al the way up to the market level.
Developing the right strategy is an exercise in getting away from solutions and understanding what “job” a group of people are trying to get done. This brings a unique lens to innovation and strategy by creating a stable platform (the market). It also allows us to understand in a discrete way how these groups measure success.
Understanding how groups are either underserved, overserved, or are appropriately served is critical in devising a growth strategy. While there are a number of pathways to executing the strategy, in its simplest form, we can grow by…
Getting a step in a job done better and/or more cheaply (mapping the job-to-be-done)
Getting more steps done in a job
Getting more related jobs done on a single platform
More specific and accurate messaging targeted toward users with distinctly similar needs
Each of these possibilities require a bottom-up, granular, and stable lens on how market success can be achieved over time.
Note: I’m defining a market as a group of people trying to get the same job done. I’m defining segments as differentiated groups within that market who have the same, distinct unmet needs. No solutions required!
Strategyn’s Growth Strategy Matrix
Strategyn has spent the past 25+ years improving Jobs Theory to a point that has made product and marketing success far more predictable by putting everything into a logical order, and measuring market success in a new and unique way (not so new, actually). You can find more on their growth strategy matrix here…
With the proper outputs, a market strategy will inform all of the downline capabilities; primarily it informs product and service design teams who can then conceptualize winning solutions (their job) that address winning market opportunities (they are pointed to this).
It can also inform marketing communications by providing…
…a unique, differentiated, and statistically validated segmentation (based on unmet needs)
…a unique, differentiated and statistically validated messaging for each segment (based on functional, social and emotional needs)
…clear segment profiles that describe the group and the situations that drive the differentiation (with statistical validity)
…a better understanding of how to reach these groups, including channel selection, or their propensity to wander along their own intent paths in the buyer journey
Marketing can then take these inputs and do what they (should) do best…generate demand and/or interest in the offering and hand those leads off to the team that converts them to revenue (Sales). That is a completely different skill set and function than Market Strategy.
It doesn’t matter whether this capability is housed with the “Marketing” organization, or in something labeled “strategy.” It’s still a distinct capability found at the front-end of innovation, and requires far more rigor, and a different lens than we see in market research, or even the UX design world, today. They are both screaming (or should be) for a better, more predictable method on the front end.
After all, they want to get their bets right the first time, even if they are pointing over there at “fail-fast” books to distract you.
Everyone seems to want the title of “Innovator” or “Strategist” without really understanding what it means, or that it entails incredible responsibility within an organization. In my distinct capabilities diagram above, the current thinking in each capability always starts with ideas; and it almost always results in starting over again…or failure. This is why it starts with the customer’s job to be done, and not ideas.
Strategyn: Why Your Idea is Worth Nothing
I contend that designers, developers, marketers, sales teams, and lifecycle support teams should focus on the capability their role suggests. While you may develop innovative ways to execute your jobs, your job is not market strategy. And to that point, market strategists need to learn new methods to make growth more predictable and profitable. They simply aren’t getting their job done as successfully as they could.
Of course, you can disagree with me. Feel free to comment here, or challenge me on Twitter @mikeboysen.