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Perception Is Reality.... Or Not?

Wayne Kernochan Critiques the Agile Marketing book by Michelle Accardi (I haven’t read Michelle’s book yet). But Wayne’s post did cause me to write a few ideas down.

I'm thinking of technology strategy and good portfolio management. These are strategies that have been used by Apple time and time again. Apple asked the question, what do we need to do to build a product that will be the best in the marketplace so we can make the most profit?

Through personal insights, design and observation of consumer insights, Apple developed the technologies that enabled their products to become category leaders; iTunes, touch screen technology, and iOS for mobiles and tablets. And not only did Apple develop a technology that they knew would enable them to become the product leader in a particular product category; mp3 player, smartphone and tablet, but they leveraged each technology to enable Apple to become category leader in another product category; again smartphones and tablets. Good product development is not about coming up with an idea, but knowing which ideas you need in order to develop a category beating product.

One of the reasons I think agile makes sense is that counter to waterfall projects you don't necessarily know all of the technologies that will help satisfy the needs of a customer around an attribute. If an innovation doesn't work or you find an idea that works better, you change and satisfy the customer. With waterfall you are still waiting to finish the project before thinking about learning where you are going wrong.

It's not really the marketer's perception that's the issue, it’s the customers. What do they want? What do they need? And what if they don't even know there's a product that satisfies a need in a way they have never thought about before. How do you develop your product in such a way to make that category beating product?

Though I think I do agree with Wayne when he uses several good examples of a lack of thinking when it came to product strategy. Reality meant that several companies were out maneuvered by their own lack of thinking about how to make the best technology to satisfy customer needs around particular attributes.

Though I haven’t read the book, but I’m wondering if both the author and Wayne are right. You need reality to know if an idea is workable or not, yet you also need customer perception, to develop the product to the point where it is category beating. Part of this is the experience of start-ups, rather than multi-billion dollar companies like Apple that can wait until they believe they have a category beating product. The start-up using agile marketing may have to rely on customer perceptions that the product as it now stands is what they need. But as the customer, marketplace and product grows that reality will change, and agile will help with that change.

I was also thinking one last point.

Image Credit Apple Outsider
Apparently Apple now has about the same percentage of market share as HP for computers overall, 15%. That’s remarkable. I’m not saying that Apple had a long term product portfolio strategy to beat everyone in the computer industry by developing and extending the categories of products that could be considered computers. But in hindsight, whether by design or opportunistic, that’s what’s happened. Apple is beating the rest of the computer industry by redefining what it means to own a computer.

From mp3 player, to smartphone to the tablet, each step in the process required the development of technologies that helped Apple to become the category leader in each new product category. ITunes, touch screens, iOS for phones and larger computers.

Apple has succeeded not only by using strategy, but building the technology to succeed has cost it considerably less than its rivals in R&D spend as a percentage of income.

Apple’s success is because it focused on reality. What the customer needed.

However, Apple’s success is also because it built not just products, but lifestyles view that technology that can be different and easier to use. Apple users went along for the ride, from Macs, to MP3’s, to iPhones to iPads. People didn’t know they wanted an iPhone until they had experienced the iPod, and they didn’t know they wanted an iPad until they had experienced the iPhone. Yes, you have to build a working product, that’s reality, but you also have to dream and perceive what product needs to be built to become that category beating product!