The ODI Market Definition: Why Getting the Market Right Changes Everything

The Question That Reframes Everything

“What market are you in?”

It sounds like a trivial question. Every executive has an answer ready. The VP of Marketing can recite the market definition from the last investor presentation. The VP of Product has the competitive landscape slide. Everyone in the leadership team has a clear, consistent, completely wrong picture of what market they are actually in.

Wrong is perhaps too strong. Incomplete is more accurate. But in strategy, incomplete and wrong often produce the same outcomes: innovations that solve problems nobody has in the market you defined, while the problems that actually drive customer switching behavior sit invisibly outside your competitive frame.

The ODI market definition is the first and most consequential step in the Outcome-Driven Innovation process. It is also the step that most organizations skip or execute at a level of analysis that makes every subsequent step less valuable. Get the market definition right, and the entire research and strategy process operates on the correct foundation. Get it wrong, and you will produce exquisitely precise measurements of needs in the wrong market.

This article explains the ODI approach to market definition, why it differs so dramatically from conventional approaches, and what the practical consequences are for competitive strategy, product development, and growth.

The Conventional Approach and Its Failures

How Companies Currently Define Markets

Most companies define their market through one of three lenses:

Product/category lens: “We are in the industrial pump market,” “We are in the surgical instrument market,” “We are in the enterprise learning management software market.” This is the most common definition, and it is defined by what the company makes, not by what customers are trying to accomplish.

Customer lens: “We serve mid-size manufacturing companies with 500-5000 employees in the DACH region.” This is a slightly better approach — it starts with the customer rather than the product — but it describes who buys, not what they are trying to do. Two companies that look identical demographically may be trying to accomplish completely different things with your product.

Competitor lens: “We compete against [Company A], [Company B], and [Company C] in the market for [product category].” This approach defines the market by reference to the companies currently fighting for it, which systematically misses non-obvious competition and the threat of disruption from outside the defined category.

What Conventional Definitions Miss

The problem with all three conventional approaches is that they define the market in terms of the current solution landscape — what exists now — rather than in terms of the underlying customer goal that any solution might address.

A company that defines its market as “industrial pumps” will build competitive intelligence on pump manufacturers, benchmark its specifications against pump specifications, and develop product strategy in response to what pump competitors are doing. What it will not see is the fraction of its potential market that is accomplishing the same fluid transfer goals through alternative means — pneumatic systems, mechanical conveyors, gravity-fed systems, or entirely different process configurations. These alternatives are competing for the same customer budget addressing the same underlying job, but they do not appear in the competitive analysis because they are outside the defined market.

The strategic consequences are real. A company that cannot see its full competitive set cannot understand why it is winning or losing share. It cannot identify the outcomes that are driving customer decisions to use alternatives. It cannot see the threat of disruption from adjacent technologies that are becoming better at the same underlying job.

Clayton Christensen’s disruption research documented this pattern repeatedly: market leaders fail not because disruptors attack the market they defined, but because disruptors address the underlying customer job through a different solution approach that the market leader cannot see because it is outside their market definition.

The ODI Approach: Define the Market Around the Job

The Principle

ODI’s market definition principle is straightforward in concept and demanding in execution: define your market as the job that customers are trying to accomplish, not as the product or product category you currently offer.

A market is a group of people trying to accomplish a specific goal. Every person trying to accomplish that goal — regardless of what solution they currently use — is in your market. Every solution that can be used to accomplish that goal — regardless of what product category it belongs to — is in your competitive set.

This means:

• Your market is larger than your current customer base
• Your competitive set is broader than your current category
• Your product is one solution in a market defined by a goal, not the center of a market defined by a product

The Mechanics of Job-Based Market Definition

In practice, defining the market around the job requires answering four questions with precision:

1. What is the job the customer is trying to do?

The job statement should be expressed as: verb + object + contextual clarifier. It should be solution-agnostic (no product references), stable over time (the underlying goal, not the current technology), and at the right level of abstraction (specific enough to be actionable, broad enough to include alternative approaches).

Finding the right level of abstraction is the hardest part. Too narrow and you recreate a product-centric definition: “operate an industrial centrifugal pump to transfer fluid between process points” is essentially a product specification. Too broad and the job becomes meaningless: “maintain production system efficiency” encompasses so many activities that no coherent product strategy can follow from it.

The practical test: can you identify at least five fundamentally different ways a customer might accomplish this goal? If yes, the job is at the right level of abstraction. If all the alternatives you can identify involve essentially the same technology or product approach, the statement is probably too narrow.

2. Who is trying to do this job?

The job executor is the person performing the job — not the purchasing organization, not the economic buyer, not the influencer. The job executor’s perspective defines the outcome statements and the satisfaction data. In B2B contexts, this distinction is critical: the person who buys the pump (procurement manager), the person who specifies it (process engineer), and the person who operates it (plant technician) are doing different jobs with different outcome sets.

For each distinct job executor, there is a separate market. A company with a product that touches three different job executors may be operating in three distinct markets simultaneously.

3. What alternatives currently exist for accomplishing this job?

This question defines the competitive set. When you think in job terms, the competitive set typically expands substantially beyond the product category. For a surgical instrument company whose job is “safely visualize the operative field during minimally invasive procedures,” the competitive set includes not just other surgical instrument manufacturers but also imaging technologies, robotic assistance systems, and — importantly — improved illumination and magnification approaches that do not require instruments at all.

Identifying all viable alternatives requires engaging with job executors in qualitative interviews with the explicit question: “If you could not use [current solutions] to accomplish this goal, what would you use instead?” The answers are often surprising and always strategically illuminating.

4. What is the full context in which the job is done?

Context shapes what constitutes a good outcome for the job. The context includes the physical environment, regulatory constraints, organizational dynamics, time pressure, and adjacent jobs that this job connects to. A diagnostic procedure performed in a tier-1 hospital under controlled conditions has different outcome requirements than the same diagnostic procedure performed in a resource-limited setting under time pressure. These may be different markets — same job, different contexts, different outcome priorities.

What Changes When the Market Is Defined Correctly

The Competitive Set Expands and Clarifies

The most immediate strategic consequence of job-based market definition is a richer, more accurate competitive picture. When a surgical instrument company redefines its market from “surgical instruments for minimally invasive procedures” to “accurately identify and protect critical anatomical structures during minimally invasive procedures,” its competitive set expands to include imaging systems, AI-assisted visualization, and robotic guidance — all of which are competing for surgeon attention and budget on the same underlying goal.

This expansion is not alarming — it is clarifying. Knowing who you are actually competing against is better than having a partial view of the market that leaves you vulnerable to disruption from sources you have not identified.

For an industrial equipment company, the job-based competitive set typically includes:

• Direct category competitors (as expected)
• Different technology approaches to the same goal
• Service providers who accomplish the goal through outsourced manual processes
• Internal options (the customer doing the job themselves with generic tools)
• Do-nothing (customers tolerating the current level of achievement on the goal)

Each of these alternatives is a competitor in the job market, and understanding why customers choose each one — which outcomes different alternatives address better or worse — is essential strategic intelligence.

The Addressable Market Grows

When markets are defined by jobs rather than products, the addressable market typically grows. This is not theoretical — it is a direct consequence of including all the people trying to accomplish the goal, not just those currently buying your product category.

I have seen this play out in concrete terms. A company making equipment for a specific industrial job typically sees a market defined as “companies buying our type of equipment.” When the market is redefined as “companies where this job exists,” the addressable market often doubles or triples — because a significant fraction of companies doing the job are accomplishing it through alternatives that do not involve the company’s product category.

These non-customers represent the highest-potential growth opportunity, because they are currently underserved in ways that the company’s product — if properly positioned against the job rather than against the product category — could address better than their current alternative.

Innovation Strategy Becomes Opportunity-Driven

With the market defined around the job, the innovation process has a clear scope: identify which outcomes related to this job are most underserved and develop solutions that address them. This scope is both more expansive and more focused than a product-centric innovation strategy.

More expansive because it includes outcomes at every stage of the job process — not just the outcomes related to the core execution that the current product addresses. More focused because the strategic question is clear: address underserved outcomes, starting with the highest-opportunity ones.

Companies operating with a product-centric market definition typically innovate by looking at what competitors are doing and building incrementally better versions of the same features. Companies operating with a job-based market definition innovate by identifying which outcomes across the full job process are most underserved and building solutions that address those outcomes — regardless of whether those solutions look like the current product.

The Three Market Definition Traps

Trap 1: The Activity Trap

The most common error is defining the job as an activity — what customers do with your product — rather than as a goal — what they are trying to accomplish.

“Use the monitoring system to track process parameters” describes what the customer does with the product. “Maintain process stability within defined tolerance limits during continuous production” describes what the customer is trying to accomplish. The second formulation opens the competitive set to any approach to process stability — not just monitoring systems.

The test: replace “use [product]” with “accomplish [goal]” and see if the statement remains meaningful. If removing the product reference makes the statement meaningless, it is an activity description, not a job statement.

Trap 2: The Hierarchy Trap

Jobs exist within hierarchies of goals. “Drill a hole” is a job. “Fasten two components together” is the job above it. “Assemble a structural frame” is the job above that. The right level for ODI market definition is the level at which a practical product strategy can be built — not so low that the job is product-specific, not so high that it encompasses an unmanageable scope of solutions.

The test: at the chosen level of abstraction, can you identify 5-15 distinct customer outcomes that a product could address? If there are fewer than five outcomes, the job is probably too narrow. If there are more than fifteen obvious outcome categories, the job is probably too broad.

Trap 3: The Context Collapse Trap

The same underlying goal, accomplished in dramatically different contexts, may represent different markets with different competitive dynamics and different outcome priorities. “Prepare patients for invasive procedures” in a hospital ICU setting and in an outpatient surgical center are the same job in fundamentally different contexts — different time pressures, different resources, different regulatory environments, different skill levels in the job executor.

Treating these as one market produces an outcome set that is an average of two distinct need profiles — and a product strategy that satisfies neither context optimally. When context creates significant variation in the outcomes that matter most, define separate markets and conduct separate research.

The Strategic Payoff: A Case Pattern

Let me describe a pattern I have observed across multiple client engagements — not a single case but a composite of the market redefinition outcomes I have seen:

Initial definition: A company making a specific type of precision measurement instrument defines its market as “precision measurement instruments for industrial quality control.” Competitive analysis: seven direct competitors making similar instruments. Market growth: 3-4% annually. Innovation strategy: match competitor features, improve measurement accuracy.

Redefined market: After ODI market definition work, the market is “verify that manufactured components meet quality specifications before advancing to the next production stage.” Competitive set now includes direct competitors plus: coordinate measuring machines, automated optical inspection systems, manual gauge-based inspection, and statistical process control software that reduces the inspection burden by improving upstream process consistency.

What changes:

• The addressable market is 3-4x larger (includes all companies doing the quality verification job, not just those buying the current instrument category)
• The highest-opportunity outcomes are at the Define stage (determining the correct inspection protocol for new component geometries) and the Conclude stage (documenting inspection results for regulatory compliance) — stages the instrument did not address at all
• The most significant competitive threat is not from direct competitors but from automated optical inspection, which is becoming fast enough and accurate enough to address high-volume inspection jobs

The strategic response: Product extensions addressing Define and Conclude stage outcomes (configuration guidance tools and automated documentation features) drive stronger customer retention and win new customers who were using manual methods for documentation. Competitive positioning shifts from “most accurate instrument” to “complete quality verification solution.” Growth rate doubles versus the instrument-only peer group.

The specific numbers are illustrative, but the pattern is real: job-based market definition reveals growth opportunities that product-based market definition conceals.

Connecting Market Definition to the Full ODI Process

The ODI market definition is the first of six process steps. The subsequent steps — discovering outcomes, quantifying satisfaction, identifying segments, formulating strategy, ideating and testing — all operate within the market the first step defined. A correct definition makes every subsequent step more productive. An incorrect definition means that the quantitative measurement, the segmentation, and the strategy are all operating within an artificially constrained view of the market.

For product teams new to ODI, the investment in getting the market definition right — which typically requires three to five rounds of revision and significant qualitative research before it is properly formed — is the highest-leverage investment in the entire process. It is also the step that is most often shortchanged, because the urgency to “get to the research” creates pressure to accept a good-enough definition and move on.

Resist that pressure. The market definition is the foundation on which everything else is built. Spend the time. Test the definition with job executors. Iterate until it captures the full scope of the customer’s goal and the full range of alternatives they could use to accomplish it.

For a full understanding of how the ODI methodology works from market definition through strategy, see what ODI is and how it works, and for the foundational JTBD concepts that market definition builds on, see what are jobs to be done.

I have never worked with a client whose initial market definition was right. Never. In every engagement, the redefinition process reveals either a market that is larger than the company thought, a competitive set that includes threats they had not identified, or outcome categories they were systematically missing. The market definition work is not a formality — it is where most of the strategic value in an ODI engagement is created.

Frequently Asked Questions