Recently I happened to catch most of the movie “Big” with Tom Hanks. I hadn’t seen it in a long time and had forgotten its timeless marketing lesson. In the story, a toy company’s executive team has clearly lost touch with their true business identity, and Tom’s character – an eight year old in a 30 year old body if you never saw it – reminds them by simply being their target demographic. The company CEO appears to understand that they are off track, but the competitive executive team is obsessed with developing new toys without quality input from those that play with them or those that purchase them.
Every day this scenario is played out in business after business. From newly formed start-ups to decades-old establishments, leadership comes to believe that they are the experts when it comes to understanding what their consumers want. The painful lesson learned by many is that the consumers, not the business, are better equipped to understand their own needs.
Few companies really take the time to understand the actual business they are in. In the movie, the company is not in the toy business, but rather in the business of making children happy through toys. That means they must provide a toy that children will want and a parent will purchase at a price that will allow them to make enough money to continue the process. That means they must understand the wants and desires of both the children and their parents and react accordingly. When the company decides they know better, when they decide to generate facts and figures that mislead rather than lead, they fail to maximize their value to the marketplace and all parties lose.
Businesses reach their greatest success when they truly understand what they provide and for who, and deliver such at a price, place and manner that works for both. However, when businesses determine that what they provide is earnings for shareholders, they have completely missed the mark.
Take the time to understand your business. If you think you are in the newspaper business, consider that you are truly in the business of providing news when, where and how people want it. The word “paper” only defines a form of delivery that is clearly becoming obsolete. If you are in the up-scale restaurant business, consider that you are in the entertainment business, and your products must provide such at a time, place, and cost that appeals to the buyer.
Businesses get started because a founder is lucky enough to develop a product or service that a market segment will adopt. They didn’t take the time to understand a real market need, but assumed that due to their development brilliance someone, if not everyone, would want what they had. This method is a form of gambling that is executed on a regular basis, and like gambling, sometimes, but rarely, there are winners.
Other businesses take the time to truly understand a market need and continually develop their product or service around that need. Their odds of success are significantly better because they are not gambling – but rather working with a quality understanding of the value they provide.
