Have you ever wondered why so many businesses fail?
In his book “The Practice of Management” Peter Drucker the father of Management Thinking said “Because the purpose of business is to create a customer, the business enterprise has two and only two basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs. Marketing is the distinguishing, unique function of business”.If you observe closely, one of the biggest challenges most businesses face is defining their markets. The inability to define their market often highlights why lots of startups die and big companies fail with market definition being a very consequential part of an enterprise. The way an enterprise defines markets affects how it innovates to solve customer problems and how they compete. The inability to do this effectively stems from the basis of the frameworks used to analyze markets, the frameworks are product centric and correlation based, both of which are not holistic.
The way we define markets is making them smaller than they seem
So how you may ask, should businesses define their markets effectively — by using a framework, that is customer centric and based on causation? The Jobs-To-Be-Doneframework ticks all the boxes, so how can businesses define their target markets effectively using the Jobs-To-Be-Done framework.
How To Define Target Market Using Job-To-Be-Done Framework
- Identify Causation: Find out the outcome consumers want when they use a product. So instead of defining your offering (Value Proposition) in terms of the products (the automobile industry) define it around the job-to-be-done (transportation).
- Identify the context:Find out the context in which consumers want the outcome. Context is very important as the importance of the job-to-be-done varies with context. Context will determine if a consumer will choose a particular solution, in a given circumstance, or not. For Example, Lolu will opt to use UberBLACK services instead of driving his car because he wants to arrive in a black Benz and leave in a white one.
- Categorize Context:There are two categories of context; they are functional JBTD (Job-To-Be-Done) — the practical and objective customer requirements e.g. (move from point A to B) and Emotional JBTD — the subjective customer requirements related to feelings and perception e.g. (get from point A to B as well as create a well to do perception in the mind of your clients). For Example, a good contrast between a Functional JBTD and Emotional JBTD are the UberSELECTand UberBLACKoptions on the Uber app, both of which cater to the functional and emotional context respectively. This categorization helps with pricing and segmentation.
- Create Job Statements:A job statement highlights the progress (causation) customers are trying to make when they hire solutions in different context. Key components of a job statement are an action verb(which is the progress a customer wants to make), the object of the action verb(which provides context), and the grammatical modifier(which clarifies restrict or add to the sense of the context in which customers want the progress).
Prioritize Jobs:Customers have a number of jobs they want to hire solutions for but not all jobs have equal significance, as some are more important than the others are. Secondly it will be strategic to identify underserved markets that provide the best opportunities as the can be good pointers for a target market. Companies should also use a SWOT analysis to identify a Target Market by matching opportunities (i.e. underserved markets) with their strengths or competencies they need to develop.