Table of Contents
- Differences between product orientation and market orientation
- Product orientation characteristics
- Product orientation pros
- Product orientation cons
What’s it: Product orientation is a marketing management philosophy by promoting quality products to generate sales. The company assumes product quality as a determinant of demand in the market. They pay less attention to customer needs and wants. They are of the view that consumers will buy if they produce products with superior quality, performance, and features, regardless of whether it suits their taste or not.
High-tech and innovative manufacturers have traditionally adopted this approach. Through their products, they seek to educate consumers on how to satisfy their needs rather than the other way around.
Differences between product orientation and market orientation
A product orientation is an inward-looking form, apart from production orientation and sales orientation. “Supply creates its own demand,” as Say’s law.
Companies focus on creating the best possible product under product orientation, and the market will eventually demand it. Meanwhile, in production orientation, companies assume consumers buy for reasons of availability and lower prices.
Furthermore, under the sales orientation, the company aggressively reaches as many consumers as possible and hopes that some will buy.
The three approaches contrast with a marketing orientation (also known as a market-led orientation) and holistic marketing. In both approaches, the company adapts the needs and wants of the customer to create a product. Thus, the impetus for product creation and innovation comes from external factors rather than internal factors.
Through market research, companies understand market needs and tastes. They then develop the ideal marketing mix (product, price, promotion, and location) for their target market.
Product orientation characteristics
First, innovation is the main focus of product development. Through intensive research, companies create products with superior performance, quality, and features (at least according to them). Such a product, in their opinion, will be attractive to customers.
Second, innovation originates from internal companies. Companies rely heavily on internal research and development to create products.
Gillette razors are a good example. The company focuses on creating the best razors and selling them to the market. Its products teach consumers how to find satisfaction using their products.
Third, this approach is suitable when market demand is higher than supply. That way, there is a higher chance for the product to be accepted by some consumers.
Fourth, consumers do not know how to satisfy their lives. In this case, the company educates them about how they get satisfaction using the company’s products.
Early computer development is a good example. Consumers may not be aware of how it can benefit them. Manufacturers then teach them how to use the computer to make their lives easier. Manufacturers also equip computers with various software that make it easier for them to perform various jobs and tasks.
Fifth, continuous innovation. Product orientation aims to produce quality products to generate sales and profits. Companies must continue to innovate to improve quality.
Product orientation pros
Fewer resources. The company focuses its resources to focus more on internal research and development.
Cheaper costs. Companies can save on some costs, such as market research. They don’t spend a lot of time and resources, figuring out what customers want.
Unique product. Product-oriented businesses continue to innovate to produce the best products. Indeed, even if the product is unique, it may not generate a unique selling proposition because competitors offer similar products.
Product orientation cons
Low adaptability. Companies face a low risk of acceptance because they do not adapt to consumer tastes and preferences in creating products.
Another source of risk is the failure of companies to differentiate their offerings from those of competitors. Even though the product is superior in terms of quality, when it doesn’t do it better than competitors’ products, consumers will not be interested in it. As a result, the company is likely to lose customers when competitors offer better ones.
Limited innovation. Relying on internal research and development means fewer ideas. Companies become highly dependent on the ability of their human resources to produce innovation.
Waste of resources. The company may have tried to develop several products, but the customer did not buy them. The reason may be that it doesn’t suit their taste. Or, it’s because competitors are offering better ones. As a result, resources are wasted because they do not generate sales.