Most successful businesses pay attention to both the market and their product. However, it's common (and important/) to focus more on one than the other.
Why is it important to know whether your business focuses more on the market or your product? The two strategies can sometimes come into conflict with each other if you focus too much on both. Either strategy can be successful, as long as you understand why you're using that strategy.
Let's talk about the differences between and risks and benefits of market-focused and product-focused businesses. Understanding the differences and using this knowledge could be the key to succeeding with your business.
What are the Differences Between Market-Focused and Product-Focused Businesses?
Businesses that focus on the market are always looking at changing trends to develop products to meet those needs. They don't improve a product for the sake of the product, but rather to fill a need in the market. These businesses constantly study their competitors, too, to be able to compete with them.
Product-focused businesses focus on producing the best product they can, regardless of the market. They believe that a superior product will always win, regardless of the market. This may mean repeatedly improving a current product rather than revamping it to meet changing needs.
A great example of the differences between market-focused and product-focused business is to look at Microsoft versus Apple. They are both hugely successful IT companies. However, they have very different approaches to their businesses.
Microsoft is constantly monitoring the market to see what types of features their customers want. They only release a product when they're sure it is what their customers are looking for. While it might not be the fanciest product, it delivers what customers want.
On the other hand, Apple primarily focuses on producing the best possible products, regardless of the market. They are always innovating and bank on their product is better than their competitors. This often works well, but not always. Remember the outrage over iPhones without headphone jacks?
Neither approach is better than the other. It's crucial to pay attention to both the market and your product. However, you may find that one focus works better for your business than the other.
Benefits of a Market-Focused Business
With a market-focused business, you can be sure you are providing your customers with the product they want. You can beat out your competitors simply by knowing what your customers want and providing it for them.
Focusing on the market may be a bit of a safer bet since you're providing your customers what they want. You aren't wasting money improving your product with features that may not appeal to your customers.
Risks of a Market-Focused Business
The biggest risk of being a market-focused business is that you may not have the latest, greatest new product. You risk competing with all the other market-focused businesses and losing out to product-focused businesses.
Giving your customers what they want sounds like a sure thing. That is until a product-focused competitor comes out with something your customers never knew they needed.
Even if you focus primarily on the market, you should still focus on providing the best product you can.
Benefits of a Product-Focused Business
Businesses that focus on their product tend to lead their industries with innovation. They always strive to create the best product, regardless of what the market is doing or what customers ask for.
If you become a brand that people associate with always having the latest innovations, you can attract a loyal following. You can be sure that you have the best product on the market, regardless of how the market is trending.
Risks of a Product-Focused Business
Having the latest and greatest product sounds ideal in theory. That is until you release a product that nobody is interested in.
Product-focused businesses may also be more strongly influenced by the economy. In a poor economy, customers may not want to spend their money on top-of-the-line products. Market-focused businesses can steal your customers by producing cheaper products that meet the needs of the current market and economy.
Putting too much focus on your product and not enough on the market can cause your company to fall behind the competition. You might discover important information about what your customers want too late to change your product.
The Danger of Thinking You're Product-Focused, but Acting Like You're Market-Focused
Are you spending more money researching your competition than you are developing your product? That's fine if you understand that you are focused on the market. However, it's the wrong approach if you believe you're a product-focused company.
The more clearly you understand whether you're (or should be/) market-focused or product-focuses, the better you can allocate your money.
Spending your product-development money all willy-nilly can lead to a product that is neither the best nor the hottest. Focus most of your time, attention, and budget on making the best product you can. Or, research the market, your competitors, and your customers. Trying to do too much of both can lead to not enough success of either one.
Need a Loan to Focus on Your Product or Marketing It?
Whether you're focusing more on developing your product or marketing it, you may need capital to help you. If you need a loan for either, First Union Lending can help.
First Union has 9 different types of loans, so you're sure to find the one to fit your needs. That's regardless of whether your business focuses more on the market or your product.
Getting started is easy. Simply click here or call 863-825-5626 to talk to one of our lending specialists. They'll walk you through your options to help you find the right loan for you.
Applying for one of our loans doesn't affect your credit score, and you could get approved as soon as today. Contact us now to get the loan you need to grow your business.