CHAPTER 6Emptor Cognita: Competitive Advantage through Buyer Learning

Gregory S. Carpenter

In 1954, Peter Drucker wrote that the purpose of business is “to create a customer,”1 and from this foundation the concept of a market orientation bloomed. Market‐oriented firms understand customers' needs, share information they learn with the firm, and respond to customers.2 This approach has become known as being market driven or customer centric. Scholars have developed the concept, investigated the organizational culture associated with a market‐driven approach, and outlined the process by which organizations become more market‐driven.3 Empirical studies demonstrate that a greater market orientation is associated with superior financial performance,4 as firms have amply demonstrated. For example, Amazon and Toyota illustrate the power of the customer‐centric approach.

Despite the compelling logic and mounting evidence of the success of a market‐driven approach, Steve Jobs famously pursued a different approach: “Some people say, ‘Give the customers what they want.’ But that's not my approach. Our job is to figure out what they're going to want before they do … People don't know what they want until you show it to them.”5 Head of product development for BMW Dr. Wolfgang Reitzle essentially agreed with Mr. Jobs when he said, “We know what a BMW is. We don't have to ask our consumers.”6 Howard Schultz expressed a strikingly similar view when he wrote, “Don't just give the customers what ...

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