Product-Out vs. Market-In Approach

When I was a college student at the University of Michigan, my friends and I had three coveted items on our wishlists: the sleek Acura Integra, a Nintendo game console, and a Sony Trinitron TV. At the time, Sony was the gold standard for innovation. Its Walkman transformed how we listened to music, and its televisions were renowned for their superior picture quality. (Just saying, this was back when VHS tapes were still a thing!)

Fast forward a decade, and the tables had turned. South Korean companies Samsung and LG emerged as the leaders in the global TV market, surpassing Sony and relegating other Japanese brands like Panasonic and Toshiba to the background. How did this shift happen?

The answer lies not just in technological advances but in perspective. Sony, a company built on a legacy of innovation, leaned heavily on a product-out approach—driven by engineering priorities and internal perceptions of what consumers should want. In contrast, Samsung and LG adopted a market-in mindset, putting consumer needs and insights at the center of their strategies.

Sony’s Remote Control Misstep

One of the starkest examples of these contrasting approaches is the TV remote control. In its later years of market dominance, Sony launched a high-tech TV in collaboration with Google, complete with a remote control boasting over 50 buttons, including a full QWERTY keyboard. While it showcased Sony’s technical brilliance, it overwhelmed users with complexity and felt disconnected from their everyday needs.

Samsung took a different path, introducing a TV remote with fewer than 10 buttons and an intuitive, joystick-like design. This minimalist approach wasn’t just a stylistic choice—it directly addressed U.S. consumers’ desire for simplicity and ease of use.

Sony’s remote reflected the product-out mindset: designing based on what engineers thought was impressive rather than what customers found practical. Samsung’s remote, on the other hand, epitomized the market-in approach, addressing consumer pain points and offering a product that fit seamlessly into their lives.

The Power of Market Insights

Samsung’s ascent to the top of the U.S. TV market wasn’t accidental. It was the result of deep consumer research and a willingness to adapt. Samsung identified key preferences among American consumers, such as the desire for larger TVs and straightforward functionality. These insights shaped everything from product design to marketing and distribution strategies, giving the company a decisive edge over competitors.

The takeaway? Understanding the market is just as critical as having a superior product.

Adopting the Market-In Mindset

If you’re planning to introduce your product to the U.S. or any new market, ask yourself:

• Have you invested time in understanding local consumer habits and preferences?

• Have you observed how people interact with similar products in their homes?

• Are you willing to challenge assumptions about what worked in your home market?

  
  

Even within Japan, regional differences can lead to wildly different outcomes. What succeeds in Tokyo may not resonate in Osaka. Expand this on a global scale, and the stakes are even higher.

For instance, believing that what works in Japan—or any home market—will naturally succeed abroad is a common pitfall. Without immersing yourself in the culture and lives of your target audience, you risk designing products or campaigns that miss the mark entirely.

From Product-Out to Market-In

The product-out model emphasizes technical expertise and assumes that internal knowledge will translate into market success. While this approach can yield impressive products, it often overlooks the nuances of real-world consumer needs.

By contrast, the market-in model starts with the consumer. It focuses on understanding pain points, cultural differences, and unmet needs to guide product development and marketing strategies.

Sony’s decline in the TV market serves as a cautionary tale for businesses that rely too heavily on their own perspectives. Meanwhile, Samsung’s rise highlights the power of listening, learning, and adapting to consumer insights.

The Ultimate Question

So, the next time you’re planning to enter a new market, step back and ask: Am I focused on showcasing what my company can do, or am I addressing what my customers truly need? The answer might make all the difference.