There is a story of a tool company that manufactured drill bits. Faced with financial losses, company executives gathered to discuss the problem: a declining demand for drill bits. The CEO challenged his men: “How can we revive the bit market?” After an embarrassing silence, one member of the team dispelled the fog: “Sir, the market isnt for bits--its for holes!” The story, though apocryphal, does illustrate a basic but often overlooked truth: “The customer never buys a product. By definition, the customer buys the satisfaction of a want” (in the words of Peter Drucker). To put it another way, there are no markets for products--only markets for what products can do. In contemporary industry, the Xerox Corp. shows this principle in action. Xerox successfully pioneered the copy-machine industry by leasing copiers at a “per copy” price rather than selling machines outright. They correctly saw the market was for copies, not machines.
1. We must constantly evaluate customer needs;
2. We must design products to meet specific needs;
3. We must redesign products as needs change;
4. We must delete products that no longer meet customer needs.