What is Operations vs. Marketing in Product Development?

Product development is essential for innovation. Yet between 2006 and 2008 only 9% of America’s manufacturing companies introduced any innovations at all. The country is simply not innovating at the rate it should.

If you are an entrepreneur, you need to be always thinking about how you are going to change your products and do a better job. But there are two main development paths you can take. These are known as the operational and marketing approaches.

This guide will introduce you to both and determine which path you need to follow.

What is the Operations Approach?

The operations approach to product development is all about looking inwardly. This is what a lot of manufacturers tend to focus on. They look at their internal controls and their core design before deciding what decision to make.

So how do they market their products to customers?

It’s difficult to determine how they do this without being a fly on the wall, but generally it’s all in the advertising. A product is created and the marketing side of it is adjusted accordingly. The advertising is based on what’s available, rather than the other way around.

Everything is managed behind closed doors. This may be better for entrepreneurs who understand their target audience well and wish to create behind closed doors.

What is the Marketing Approach?

The marketing approach is what the majority of entrepreneurs use in order to develop products. This is all about using external influences. There are so many ways an external influence may manifest itself. For a start, it may come in the form of looking at the market, the competition, and customer needs.

There’s a lot of guess work involved with the marketing approach. You are conducting a lot of external research and banking on the product being suitable.

But even if you hit your target audience there are no guarantees that your product will be a success. You may produce something people like, but this doesn’t always translate to actual purchases.

The root of this problem is whether you can convert your research into developing a product that will justify the initial investment.

How this Works in Practice?

 These two approaches have been framed in the light that you can choose either of them but never both. In the real world, entrepreneurs are likely going to use aspects of both to develop their products.

When you are first starting out, you will always be exclusively opting for the marketing approach. This is because you don’t yet have any internal processes to work from. Your only option is to go out into the real world and discover what customers think.

This is the best way of going about things because at this stage you may not be entirely sure as to who your target audience are. Additionally, if you do know them there are no guarantees you know what they want.

Why Understanding Customer Needs is Critical

In previous decades, customer feedback was not seen as important. Big brands could pump out new products and almost guarantee sales. This was because the Internet did not exist and the competition was scarce. People would gobble up whatever they were given.

But that’s no longer the case. Entrepreneurs must understand they are working in a globalized market. You have to worry about what the world is doing, rather than just the few companies in your area. You have to understand what your customers want.

The winners in business are the ones who best meet the current needs of their customers.

But What about Time?

The customer-based approach does take longer to conduct. On the other hand, it’s going to lead to better results. As an entrepreneur, you need to be willing to invest in this for the long haul. It’s no longer viable for you to throw money at the problem and get your business off the ground in a few weeks.

Take as much time as you need to really understand your target audience. Feel like you know them inside and out before you move to the prototyping stage.

Last Word

 For the non-technical entrepreneur, understanding the various terms and definitions of product development can be difficult. But by grasping the basics of these two approaches you have a good academic footing in which to get started with.

Always think about your products, but don’t proceed until you know who your target audience is. You should have an intimate knowledge of their needs and demands.

How will you get started today?

 

Filed in: Startup Community

Philip Tadros - Founder
Family man, serial entrepreneur. Coffee and beer.