Finding the right job for your product reveals innovation opportunities

By Clayton Christensen, S. Anthony, G. Berstell and D. Nitterhouse - MIT Sloan Management Review

In the early 1990s, as digital photography emerged and threatened Eastman Kodak Co.’s success, Kodak began to invest billions in a digital imaging race it was badly positioned to win. By 2000, however, Kodak realized that while some customers used its cameras to preserve high-quality images, many more wanted simply to entertain themselves, to share fun moments with family and friends. The result was the Kodak EASYSHARE camera – a product that made it simple to attach images to e-mail.

Kodak was smart. It positioned itself to do well in the digital camera market by figuring out what its customers wanted. And so it could stop focusing on expensive improvements that didn’t matter and work on the relatively simple ones that did. During this time, its share grew from 8% to 28%.
 
In thinking this way, Kodak proved the exception, not the rule. Most companies segment their markets by their products' characteristics (the category or price) or by customer demographics (age, gender, income level).

But customers don’t think like that, argues Clayton M. Christensen, a professor at Harvard Business School, and his co-authors. So carving out the market this way is static and often unhelpful. Customers, in fact, just consider the things they need to get their jobs done. Then, when needs arise, customers "hire" products or services to do these jobs.

An example will help illustrate this concept. Consider something as simple as a milkshake. When a fast-food restaurant wanted to improve its milkshake sales, it first defined the market segment by product – milkshakes – and then delineated it further by profiling the customer most likely to buy milkshakes. Next, it invited these customers to evaluate its milkshakes. The panelists gave clear feedback, but the improvements the company made had no impact on sales.

Then a new researcher documented when each milkshake was bought, what other products the customers purchased, whether they were alone and whether they consumed the milkshake on the premises. His findings were surprising: 40% of all milkshakes were purchased in the early morning. These customers almost always were alone, bought nothing else and drank their milkshakes in their cars.

So the researcher interviewed these customers, asking why they bought the milkshakes and implicitly inquiring about what type of job the milkshakes got done.

It turns out that most customers bought shakes to ward off boredom on their long commutes. They also wanted to consume something that would stave off hunger until noon, but faced constraints: They were in a hurry, they were wearing work clothes and they had, at most, one free hand.

Milkshakes met their needs better than anything else. Bagels were dry; with cream cheese or jam, they resulted in sticky fingers. Doughnuts didn’t carry people past the 10 a.m. hunger attack. Bananas didn’t last long enough to solve the boring-commute problem. But it took 20 minutes to suck a viscous milkshake through a thin straw, hands remained clean and stomachs were satisfied until lunch.

Once the company understood this, it could decide which of the milkshake’s attributes would improve these jobs and which improvements would be irrelevant. How could they better tackle the boring-commute job? They could make the shake even thicker, so it would last longer. Also, they could swirl in tiny chunks of fruit – not to make it healthful, because customers didn’t hire the milkshake to be healthful, but to make the texture, and therefore the commute, more interesting. Also, the company moved the milkshake dispensing machine in front of the counter and began selling customers prepaid swipe cards, so they could even more quickly come in, grab a milkshake and go.

It’s important to realize that the company’s milkshakes weren"t just beating out competing chains’ milkshakes: They were winning out over doughnuts, bagels, bananas and boredom. If a company can discover a job-defined market, it will generally be much larger than one defined by product category.

To really succeed then, companies must, according to Christensen, try to understand what jobs customers want completed.

This article is adapted from "Finding the Right Job for Your Product," by Clayton M. Christensen, Scott D. Anthony, Gerald Berstell and Denise Nitterhouse, which appeared in the Spring 2007 issue of MIT Sloan Management Review. Click here to read the complete article.

Published on 12/14/2007

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