Segmentation & the Jobs-to-be-done theory: A Conceptual Approach to Explaining Product Failure

Oestreicher, Klaus (2009) Segmentation & the Jobs-to-be-done theory: A Conceptual Approach to Explaining Product Failure. In: Sixteenth Annual South Dakota International Business Conference, 01.-03.10.2009, Northern States University, Rapid City SD, USA.

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Abstract

Based on Christensen et al.’s research the jobs-to-be-done theory tends to hold that (market) segmentation is a theory (2004, 2003, 2003). The criticism expressed is that companies frequently allocate their market segments close to attributes, which are easy to measure and just observe consumers’ behaviour for developing new products. There exists the phenomenon that the vast majority of new products fail within a short period of time after market entry. The jobs-to-be-done theory supports that it is more important to align R&D alongside jobs consumers need to get done, jobs, which facilitate their lives and for which they searched a solution historically. The proposition the jobs-to-be-done theory offers is the identification of such jobs needing solutions, which may lead to the creation of new markets or to the extension of existing ones, which do not provide good enough products.

Scholars and academics put much emphasis on the process of segmentation – targeting – positioning, as an important tool to focus organisational resources and capabilities for the achievement of sustainable positioning in a challenging market environment. Therefore, this specific theory challenges what marketing theory considers as an important strategy for market success.

The proposition is that both approaches established STP and the approach by the jobs-to-be-done theory need to be well considered within strategic organisational decision making, especially for R&D and product strategy. While the traditional STP-strategy seems salient within incremental product novelties, the jobs-to-be-done theory is suggested to offer assistance for more radical product developments.

This way, organisations may find themselves in a dilemma to understand, where a borderline between incremental and more radical developments may be drawn, where it will be advantageous to rely on measuring consumer behaviour by classical market research and data and at which point it will be more promising to follow the propositions of the jobs-to-be-done theory for developing successful new products.

The proposition of this paper is that suggestions established by scholars’ for a sound segmentation strategy need to be contrasted with the jobs-to-be-done theory in the understanding that there are market needs for incremental improvements and parallel to these, different markets are expecting more radical solutions to get jobs done, for which existing products are not good enough. The paper’s conclusion will result in propositions of framing both these macro markets and contrasting them against each other.

Key Words: Jobs-to-be-done theory, segmentation, STP-strategy, new product development

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