Saturday, December 13, 2008

"Purpose Brands"

Customers dont buy products, they "hire" products to get a job done.

A "Job" is the fundamental problem that customer needs to resolve in a given situation- a concept that was introduced by Clayton Christensen.
Think about this for a while. It is an important concept to understand because many marketers think of "need-based marketing" when positioning products. According to this school of thought, a product must meet customers' needs. Problem is that needs are not static. Customers' buying behavior change far more often - function of situation and environment.

When a product does a job well, it creates a potential for marketers to create "purpose brands". A purpose brand links customers' realization that they need to do a job with a product designed to do it. Think of powerful brands - FedEx, Starbucks, BlackBerry and Google. Each of these brands is associated with a clear purpose and pop into customers' minds when they need to do the jobs that these products were optimized to do.

Without specific purpose for their products, marketing executives must attempt brand building through expensive advertising. But given the high fixed cost of building new brands through advertising, it deters many companies to build new brands at all, so the acquire and consolidate brands instead.

Positioning products to do specific jobs help companies target their advertising more effectively. To give you an example, a chain of scuba diving shops marketed its diving classes and gear by segmenting customers by "demography"-primarily people who subscribed to scuba diving magazines - and zip codes to market locally. However, they still failed to succeed. But when they asked their customers in what situations they "hired" scuba gear, they found that most of them were engaged couples and planning wedding trips in tropical destinations. No surpises then, the company started purchasing mailing list from Brides instead of Dive magazine.

RECOMMENDED READING: For further reading, I recommend following books on this subject available at Amazon Store. Simply click and buy!

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