Some firms don’t seem to follow the market. Instead, they chart their own course. They are market driving.
Who Drives The Market?
The classic example of such a firm might be Apple. It looks to many that Apple is able to influence tastes in the market rather than just serve the consumers’ tastes. Whether this is true depends a little on your definitions. I’d argue firms are still serving the tastes of consumers. They are addressing the consumers’ deeper needs. I.e. to feel part of a larger community or signal that they have taste.
Market Driving
Nirmalya Kumar and his colleagues develop the idea of market driving to explain such successful firms. It is a potentially interesting approach. It is useful for students to consider whether, and if so which, firms are able to drive the market. When is it good to be trying to move, rather than respond to the market?
Guided by vision rather than traditional market research.
Kumar, Scheer, and Kotler, 2000, Page 132
Just Really Good
The one caveat I would add is that the firms driving markets seem, to use a technical term, just really good. Market driving is explained as improving on 2 dimensions, both “price” and “benefits less costs”. Market- riving firms can deliver a product that is simply better than other firms. They can also deliver this product at a cheaper price. Firms that can beat other firms on these two dimensions are just better. If you are simply better, then business is probably quite easy. Most things probably are to be honest. Let me know if you feel this describes you.
As a professor, I feel we should set ourselves the harder task of explaining how firms that aren’t that great can do well. These firms need help more than the really good firms.
For more on marketing strategy see here, here, and here.
Read: Nirmalya Kumar, Lisa Scheer, and Philip Kotler, (2000), From Market Driven to Market Driving, European Management Journal, 18 (2), pages 129-142.