Can milkshake marketing help your business?

After spending some time cleaning up my desktop recently, I stumbled across an old folder of articles from a marketing strategy class I took while studying at Wilfrid Laurier University.

Despite a few painful memories of long nights spent reading lengthy HBR articles, I flipped through a few and came across an old favourite. Finding the Right Job for Your Product, originally published in 2007 in the MIT Sloan Management Review, is an article that resonated with me as a marketing student and still strikes me as being particularly poignant as a practicing marketer.

In brief, the article contends that traditional marketing segmentation schemes miss the mark in today’s marketplace. The authors argue that while companies tend to segment their markets along product or customer characteristics, customers “just find themselves needing to get things done” and “hire a product or service to do the job.” Few could disagree with the premise.

For example, the authors highlight the case of a fast food company that wanted to increase sales of its milkshakes (hence milkshake marketing). Traditional marketing wisdom meant the company segmented the market for milkshakes based on product or customer categories, and subsequent product variations based on these segmentation insights didn’t impact sales.

After careful market analysis, the company eventually realized that 40% of milkshakes were being sold in the morning and customers were buying them because they helped to relieve the monotony of morning commutes, not just because they’re a tasty beverage. Understanding the milkshake’s true ‘job’ and its true competition (any other product that solves the boring commute job, like a bagel or a donut) allowed the company to tweak its products to do the ‘job’ better. As a result, the company gained market share.

Ultimately, as the article’s authors’ note, the benefits of segmenting by ‘job’ and milkshake marketing can be readily applied to the 4 P’s of any marketing plan:

    • Promotion Segmenting by ‘job’ allows for the creation of purpose brands that decrease advertising costs for early stage businesses, as purpose brands “link customers’ realization that they need to do a job with a product that was designed to do it”.
    • Product Understanding the true ‘job’ your product does will help you design your product or add features that actually improve customer experience, rather than superfluous fluff that you think your target customer might value.
    • Price Understanding your product or service’s ‘job’ and your true competition will help you set the right price for the right customers (who may not be who you initially think they are).
    • Place Understanding the ‘job’ of your product or service can help you tailor your distribution strategy and get your product to the right place at the right time.

As a growing business, choosing to segment by ‘job’ rather than traditional methods can increase the size of your market, help you to understand your true competitors, tweak your value proposition, better target your products or services, and help you “escape the traditional positioning paradigm”. Always be sure to perform situational case studies, such as the milkshake marketing example outlined above, to gain actionable and practical sales and marketing insights.

If you’d like to understand more about how milkshake marketing could apply to your business, please don’t hesitate to contact me at Venture Accelerator Partners.