Kellogg on Marketing, 3rd Edition

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 ...