How to Become Market-Driven: 7 Actionable Steps

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Explore what it means to be a market-driven organization and learn 7 unique steps to adopt that in your own company.

Most product teams begin their development cycles with high expectations for their next release. They envision a great launch, good press coverage, praise from early adopters, a healthy sales pipeline, and feedback for the next iteration.

However, products don’t always go as planned. Product teams experience development delays, clunky launches, and lukewarm or poor feedback after product release. All of this can contribute to poor sales.

When a product launch fails, it may be because the product team and organization are not market-driven.

In this article, we’ll define what it means to be market-driven, identify the characteristics of these companies, and share 7 steps to help you determine whether you need to reevaluate your strategy.

Defining Market-Driven

Being market-driven means allowing knowledge of the market, customer needs, and customer desires to influence business strategy. It means seeing the business and its products from the customer’s point of view.  This is an essential characteristic because it uses data to prioritize products and features that customers want and are not satisfied with current market offerings.

What is a Market-Driven Strategy?

A market-driven strategy is a business approach that prioritizes the customer. These strategies reflect a customer-focused and organization-wide approach to planning and deploying business assets. From there, customer feedback and market insights might inform strategic product plans and product roadmaps.

Market-Driven vs. Product-Driven: What’s the Difference?

Product-driven strategies prioritize the development of products and features using the company’s product expertise. These strategies build unique products and then look for gaps in the market that their product can fill. On the other hand, market-driven strategies use research to identify gaps in the market and develop products to fill those gaps.

What is a Market-Driven Organization?

A market-driven organization uses market knowledge and customer research to guide its overarching corporate strategy. This company is not only customer-focused but also keenly aware of its competitors and its position in the market.

How to Become Market-Driven

Market-driven organizations must orient their structures and strategies to enable nimble responses to changing market demands. Instead of identifying a market niche and building a product to fill it, constantly evaluating the market and synthesizing customer feedback enables product teams to build desirable products.

Step 1: Build the Products and Features Customers Want

Market-driven organizations build the right products and features because they precisely know what their customers need as they need it. These organizations do extensive market research, customer interviews, and competitor analysis. This data helps them learn what’s going on on the ground and validate hypotheses before launching product development. Product teams risk wasting valuable resources in the wrong area when they release un-researched products or load products with un-validated features.

Step 2: Get it Right the First Time

It is essential to validate concepts, features, and attributes before beginning development. This might begin with market visits to understand customers’ real-world problems. They also test the product thoroughly, and vet features multiple times before the product launches. These teams often test in the lab (alpha testing) or the field (beta testing). Spending time and resources reworking products and features makes it more difficult for product teams to innovate. That’s why testing and validation is so important.

Step 3: Leverage Technology to Build Better Products

Your company has a better understanding than your customers about how technological innovation will affect your industry. Market-driven organizations understand that emerging technologies can be a key to leapfrogging competition. One example of this is how Microsoft developed CoPilot, an AI-enabled assistant, and integrated CoPilot with the Microsoft Edge web browser and Office apps for businesses. This created a more fluid integration of AI technology into common products. They spend resources to understand how technology will affect the market, how customers will perceive and use technologies, and how their products can use emerging technologies.

Step 4: Focus on Delivering Value

Products and services should solve problems. Market-driven organizations invest in market research and competitive analysis to identify their target customer’s biggest problems. Then, they invest product development resources into solving those problems. When products meet customers’ needs, and sales and marketing accurately position the product as a viable and desirable solution, customers can see the product’s immediate value.

Step 5: Connect With Your Customers.

Market-driven organizations are symbiotic with their customers. They regularly consult with trusted customers and explore prospective audiences to understand today’s pain points and tomorrow’s opportunities. In these organizations, product teams work closely with sales teams to gather and implement robust, ongoing feedback. Market-driven organizations aim to view their customers’ problems as their own.

Step 6: Prioritize Products and Features Based on Your Customers’ Needs

Prioritization is critical for any organization. Without it, important features and new products might languish in a product backlog. Even the most market-driven organizations have backlog items. However, they have a clear understanding of how to prioritize them. That’s because customer needs and market opportunities inform the product roadmap and prioritize the most important products and features for the customer. Product teams and product managers must navigate customer needs, competitor offerings, technological readiness, and ROI considerations to do this.

Step 7: Collaborate Cross-Functionally

Ultimately, a market-driven organization is one where cross-functional collaboration is valued and prioritized. Sales, product development, marketing, and executive leadership teams must align to function well. Market-driven strategies affect organizational decision-making, learning, and evaluation of your company’s distinctive competencies. Listening to the market and focusing on solving customers’ needs sets a precedent for all departments.


Adopting a market-driven strategy shifts focus on customer needs. Understanding market dynamics, validating product ideas, and fostering cross-functional collaboration can all help organizations build products that resonate with their target audience and stay competitive. Embracing this approach ensures alignment with market trends and customer expectations, driving sustainable business success.


  • Pragmatic Editorial Team

    The Pragmatic Editorial Team comprises a diverse team of writers, researchers, and subject matter experts. We are trained to share Pragmatic Institute’s insights and useful information to guide product, data, and design professionals on their career development journeys. Pragmatic Institute is the global leader in Product, Data, and Design training and certification programs for working professionals. Since 1993, we’ve issued over 250,000 product management and product marketing certifications to professionals at companies around the globe. For questions or inquiries, please contact [email protected].

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