It shapes

customers’
expectations
and
encourages
bundling
behavior
that may not
have been
considered a

Examples of
products that
were formerly
negative
but are
The business
now
positive
are
could
publicly
frequently
state its
observed
strong in the
fashion
andto
intention
dominate a
declining
market,
thereby
encouraging
its
competitors to
consider

Adlina Zainal-12066312
NOTES: Jaworski Kohli Sahay 2000

Market Driven- business orientation based on understanding and reacting to the
preferences & behaviors of players within a given market structure.
(“ Hear the voice of the customer and adapt offerings.”)
Driving Markets – influencing the structure of the market and/or behavior of market
players in a direction that enhances the competitive position of the business
Ways of changing the structure of a market
1. Deconstruction approach: eliminating players (often low value-adding
players (from customers’ perspective)) Example: Calyx & Corolla,
eliminated wholesalers, distributors & retailers.
(Eliminate INDIRECTLY by changing customer behavior)
(Competitors: join ventures; Suppliers: compete directly with their suppliers
to gain either a lower cost position or increased functionality)
2. Constructionist approach: adding a different set of players to deliver
and meet some customer need (Example: market for programmable
semiconductor chips- manufacturers often go with complementary software
applications to run the chips but when new complementors (third party
vendors) the overall value of the web to customers increases.
3. Functional Modification: shift the functions performed by players in a
market. (Example: Virgin Megastore or if several competitors “deintegrated” their manufacturing processes and performed specialized
functions for each other in order to reduce costs.)

Shape Market Behavior Directly
1. Build customer constraints- market behavior can be shaped directly by
building real or imagined constraints into the consumer-buying experience.
Example; Ikea: product sells in room setting so customers do not need
decorator.
2. Remover customer constraints- Internet commerce has led customers to
behave differently through easy-to-compare direct price comparisons,
offering one’s own price for the service and easy-to-access bundling of
complementary services
3. Build competitors constraints: Example, Debeers largely controls the world
diamond market, therefore it has the potential to shape the behavior of
existing players in the market.
4. Remove competitor constraints: Market constraints can be lessened, for
example, by regulation initiated by competitors, the government, or other
stakeholders

Shape Market Behavior Indirectly
1. Create new customer preferences: Can occur through “new to the world”
complete offerings. (Example: Good Grip, distinguished itself by the
comfort level of the grip)
2. Reverse existing customer preferences (example: The Body Shop)
3. Create new competitor preferences: by affecting the mind-set or cognitive
structure of competitors to consider exiting the market.
4. Reverse existing competitor preferences: Example, Proctor and Gamble’s
decision to pursue everyday low pricing (EDLP) forced competitors to
rethink their supermarket and retail strategies and think about moving
away from high/low pricing to an EDLP strategy.

Balancing market driven and driving markets.
(The ability to do both is probably strongly related to mental models or
assumptions of man- agers about the nature of the environment in which they
compete. It would be very useful to explore the nature of these assumptions in
future research.)
Focus on structure and
behavior