Market Driven or Market Driving?

Understanding the Differences:

Market-driven strategy and market-driving strategy are two distinct approaches to marketing as a strategic function. Although the term “market-driving strategy” might raise some eyebrows, it is essential to recognize the disparities between these two methodologies.

Market-driven strategy, the more conventional approach employed by 99% of firms, emphasizes understanding and responding to identified customer needs within existing or served markets.

Unfortunately, this strategy tends to be reactionary, focusing on adapting to and satisfying current market demands. It relies on short-term brand switching tactics, also known as the “From you to me” scheme, to gain market share. Customer-centricity is at the core of this strategy.

Conversely, market-driving strategy refers to introducing and cultivating a category by targeting unserved and underserved markets. This proactive approach involves identifying and meeting the needs of target markets that may not yet exist (latent needs) or are unmet, thereby driving changes in customer preferences and creating new demand. Strategic initiatives are employed to improve market penetration, essentially transforming non-customers into customers. Non-customers take center stage in this strategy.

One type of a market-driving strategy is the Blue Ocean Strategy. It urges companies to seek uncontested market space with minimal or non-existent competition. By offering innovative products or services to new customer segments while operating at lower costs, companies can differentiate themselves from competitors and create new demand, rendering the competition irrelevant.

When to Utilize Each Strategy?:

Market-driven strategy is most effective when the market is well established, and customer needs and motivations are clearly defined. Its aim is to enhance customer satisfaction, foster customer loyalty, and position the company as the leading provider among competitors. In this strategy, players often unknowingly try to differentiate themselves in the same way as their rivals, relying on superior products, advertising, promotions, and other familiar tactics. Industry logic is unquestioned, and assumptions remain unchallenged. This approach aligns with the fundamentals of traditional marketing, including segmentation, target market identification, positioning, and the 4Ps of marketing (product, price, place, promotions).

On the other hand, a market-driving strategy is employed when the market is evolving and significant untapped opportunities exist, accompanied by poorly articulated customer needs. This strategy aims to differentiate the company through the introduction of innovative products or services, attracting and acquiring new users to build a fresh user base. Its objective is to influence customer behavior and generate new demand. Market pioneers need to differentiate themselves in a unique way from existing players, offering a distinct value proposition and innovative operational practices. Crafting a strategy in this context becomes a fusion of marketing, innovation, and strategy. Modern marketing tools supporting market-driving strategies, such as the New Demand Wheel, BIDA Check-up (Barriers, Irritants, Disappointments, and Annoyances), Market-Driving Planning Map, and Business Model Map, can be employed to facilitate the process (as utilized by Mansmith and Fielders).

Importantly, it is crucial to understand that these strategies are not mutually exclusive. Ultimately, companies often need to employ a combination of both strategies, as underserved markets, when successfully penetrated, become served markets. Consequently, it becomes essential to decipher and prioritize the nine different non-customer groups within every industry.

Josiah Go, Chair and Chief Innovation Strategist of Mansmith and Fielders Inc., will be conducting his 39th Market-Driving Strategy starting August 21, 2023. An extensive array of case studies from different regions will be presented and discussed throughout the seminar. Visit for details.

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Market-driven strategy – or the strategy that seeks to understand and satisfy the needs and wants of the existing market focusing on customer loyalty and repeat purchase, has been the most common approach to business decision-making and choice of marketing activities. In recent years, this way of thinking had been challenged for its limitations – now requiring marketers to keep […]

Josiah Go features the movers and shakers of the business world and writes about marketing, strategy, innovation, execution and entrepreneurship


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