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The development of economy in Indonesia will not be separated from the role of small and medium enterprises. Tenun Ikat industrial centers is one of a collection of tenun ikat artisans in Kediri that less can compete with other similar products. On the basis of problems that often occur in Small Medium Enterprise, related the fulfillment of customer satisfaction. This research provide the solution method of the selection criteriabased product development strategy of competitive advantage such as quality, cost, delivery, service, and morale. Method of collecting data with a detailed questionnaire on the Tenun Ikat customers and analysed by using Importance Performance Analysis based on the criteria of customer needs for competitive advantage. The results of this study indicate that the plot from the value of each attribute in a Cartesian diagram that influence customer satisfaction and support in winning market competition.

The Attributes of Customer Needs Tenun Ikat SME for Competitive Market in Indonesia