Product orientation vs. market orientation
Product orientation focuses on the internal, while market orientation focuses on the external. I mean, product orientation emphasizes leveraging internal strengths to develop products and expecting consumers to come in to buy. The company leverages its resources and capabilities to create products.
In contrast, market orientation puts forward what consumers need and want in the market and then translates it into products. Market orientation also considers competition to design a value proposition. The company conducts intensive research before developing a product.
Under product orientation, the company focuses on the product and the production process. The key is to produce a high-quality product.
Companies emphasize differentiation and place uniqueness for profit. They believe quality products create demand by themselves and will satisfy consumers. Therefore, they will sell well.
This orientation is also known as the inward-looking approach. Companies just need to invent and develop a product. They believe consumers are always looking for high-quality products. Thus, they assume consumers will come and buy their creations if their products are of high quality.
Product-oriented companies try to sell their products to consumers through intensive advertising by highlighting features and benefits for consumers. However, they do little or no market research before production begins. Thus, they pay less attention to consumer needs. Instead, they spend time and money researching and developing products.
A product-oriented approach is appropriate in some markets but not in others. For example, it is often adopted by companies in the high-tech industry. Apple or Tesla are examples.
Take Apple as a case. The company has spent $97.37 billion on research and development from 2018 to 2022. But in addition, its success must be connected to Steve Jobs’s persuasive ability to convince consumers.
In addition, product orientation is appropriate in markets with little competition. Thus, consumers do not have an alternative choice to switch.
Product orientation offers several advantages, including:
- Save on market research costs
- Focus on internal core strengths
- Higher profit margins
However, this approach also carries risks such as the following:
- Does not meet consumer requirements
- Low consumer acceptance
- Higher chance consumers do not buy
- Damage to reputation from the slightest mistake or defect
First, market-oriented companies focus on identifying consumer needs and requirements. They do deep research. Then, they design products according to consumer requirements and supply them to the market.
Companies believe they can produce the right product by identifying consumer needs and wants. Thus, their products are more acceptable to the market and sell well.
Market orientation is also known as an outward-looking approach. The company focuses on the market to get inspiration for developing products. First, they find out what their customers want through intensive market research. Then, they create products to satisfy those wants.
Research focuses on identifying current and future needs and wants. That is to anticipate changes in consumer tastes or preferences. So, the product will still be relevant from time to time if the research is translated into development.
Market orientation is suitable when the company operates in a market with intense competition, such as the clothing and cosmetics industries. Companies must be able to meet consumer requirements. If not, consumers will not buy and choose competitors’ products.
In addition, this approach is also suitable in markets where buyers have high bargaining power. For example, a market has few buyers, but many players supply it. Thus, companies must compete fiercely with each other to captivate consumers.
Market orientation has several advantages, including:
- Higher product acceptance because the company is highly consumer focused
- Be more responsive to changing information through constant feedback from customers
- Better able to anticipate changes due to continuous market research
- Tend to last longer because companies anticipate current and future needs and wants
However, this approach also has drawbacks, such as:
- Expensive research costs and biased research results
- Challenging to determine precisely what customer requirements are because needs and wants vary widely among consumers
- Requires companies to constantly change according to market dynamics, which may be difficult if not supported by resources and capabilities
- Costs increase as companies try to meet changing needs
Commercial marketing vs. social marketing
Commercial marketing emphasizes making a maximum profit by meeting consumer needs and wants. Companies provide what consumers want, when, and where they want it.
Morality and ethics do not play a significant role or are not the main focus of commercial marketing. In other words, it is value-free.
For example, tobacco is harmful to consumer health. But companies don’t highlight those messages when they market them. Instead, they promote smoking as a way to relax, make it easier to socialize with other smokers and create jobs.
Such messages also apply to other products, such as alcohol, plastic bags, and junk food, which harm health, society, or the environment.
For-profit businesses are the most common to adopt commercial marketing. They try to lure consumers into making as much money as possible.
Social marketing emphasizes social motives as the primary focus. Therefore, it is value-laden. In other words, morality and ethics play a significant role.
Social marketing uses conventional marketing strategies to advertise social issues. Its goal is to make a social impact and promote good social causes. It influences social behavior to benefit society as a whole.
While commercial marketing seeks to attract as many consumers as possible to buy, social marketing influences people to change their perspectives and bring about positive social change.
For example, the government utilizes conventional promotional channels to increase financial literacy. Or it is to encourage people to improve their participation in education.
Another example is marketing cigarettes as unhealthy. It has a harmful impact not only on personal health but those around them.
Apart from governments, social marketing is commonly adopted by non-profit social organizations such as Non-Governmental Organizations (NGOs) and charities. They promote their social agenda by leveraging conventional marketing channels and strategies.
Similarities and differences between commercial marketing and social marketing
Commercial marketing and social marketing have several things in common. First, both are customer oriented. While commercial marketing targets them to buy a product, social marketing aims to bring positive change, such as reducing alcohol consumption or not drinking it while driving.
Second, commercial and social marketing consider the conventional marketing mix: product, price, place, and promotion.
Other similarities are:
- Apply social exchange theory by prioritizing cost-benefit
- Rely on market research to achieve success
- Segment the audience and choose the right market
Meanwhile, commercial marketing and social marketing differ in the following aspects:
- Used by whom
Objective. Commercial marketing aims to make more money. Companies encourage consumers to use their products. They persuade consumers to continue buying the product.
Meanwhile, social marketing is not oriented toward making as much money as possible. Instead, it seeks to persuade consumers to change their behavior.
Target. Commercial marketing targets consumers in the target market. The company segments the market and selects the target market. For example, their consumers may be individuals or institutions. And they direct their marketing efforts at them, enticing and encouraging them to keep buying.
Meanwhile, social marketing has a broader social target. And it may focus on not only consumers but also other stakeholders as well. For example, it targets suppliers to pressure companies and encourage them to operate in an environmentally friendly manner. Or, it influences the government to roll out new related regulations, such as the obligation to display nicotine levels on cigarette packs – including pictures to show the negative impact.
Benefit. Commercial marketing benefits individuals, namely by satisfying needs and wants. Meanwhile, social marketing provides benefits to the public.
Used by whom. For-profit organizations, such as businesses in the private sector, adopt commercial marketing to obtain increased sales revenue and profits. Meanwhile, non-profit organizations, such as NGOs, and organizations in the public sector, such as the government, use social marketing.
Explore More #MARKETING MANAGEMENT
- Introduction to Marketing
- Product vs. Market Orientation and Commercial vs. Social Marketing
- Marketing Objectives, Strategy, and Ethics
- Market and Its Features
- Consumer Behavior, Customer Service and Satisfaction
- Marketing Planning
- Market Targeting and Market Segmentation
- Market positioning, Target Marketing, and Product Strategy
- Sales Forecasting and Market Research
- Marketing Mix: Product
- Marketing Mix: Price
- Marketing Mix: Promotion
- Marketing Mix: Place
- Marketing Mix: People, Process, and Physical Evidence
- International Marketing
- Internet Marketing