Marketing Orientation Vs Product Orientation: Evaluating Their Positive And Negative Aspects

Marketing orientation versus product orientation

The primary motive of this paper is to highlight and evaluate the role and significant of marketing orientation and product orientation. The marketing orientation and product orientation are important concepts that are being used by the companies while implementing the business functions internationally. A comparison between product orientation and marketing orientation has been discussed in this paper. Ansoff matrix is used by the organizations to identify best product and market internationally.

The marketing orientation may be defined as a trade viewpoint where the focus is on determining and analyzing needs, requirements and wants and meeting them. When an association follows market orientation strategy, it focuses on selling and creating goods and services that fulfill the needs, and demands of the customers in order to maximize profits and revenue (Hollensen, 2010). The successful and effective market oriented firm discovers and meets the requirements, needs and desires of the key target audience through its marketing mix. It has been studied that market orientation works in the averse direction to the past marketing approaches and product orientation where the focus is on the establishing selling points for accessible goods. It is seen that market orientation is more of a culture and value rather than an individual procedure. It is the values, mindsets, rules, norms, actions and behavior of organizations, together with structure, systems, process and control of the company. Marketing oriented companies explain their activities and actions as service action that aim of satisfy the needs and requirements of the customers (Slater, Mohr and Sengupta, 2010).

A firm that applies the market orientation strategy reacts to what customers want. The decisions that taken by the companies are based on the data and facts related to consumer needs and requirements. It has been investigated that majority of organization are market oriented. On the other hand, product orientation may be explained as the orientation of the organization’s sole focus on products alone. The product orientation firm put ample of efforts on manufacturing quality and effective products and setting them at the right and suitable price so that customer differentiates the organization’s products and buy it. The basic methods of product orientation include product development, product focus and product research (Mbaskool, 2018).

It has been found that product oriented firm focuses more on its products than the market, and a marketing oriented approach focuses more on the market. In the business, the organization may develop and improve new products and services based on either the marketing oriented or product oriented approach. In product orientation, management focuses on building and improving high quality products and services that could be sold at appropriate price. From the starting of the industrial revolution until the 1950s, organizations are monitored on increasing and enhancing economies of scale and reducing production costs. It is examined that marketing oriented firm is one that formulates its actions, activities, services and products across the needs, requirements and wants of its key target audience. By contrast, a product oriented company focuses on its products, knowledge, systems and skills that support that product and service. It is noted that marketing orientation focuses on the market testing, customer focus and market research whereas product orientation approach focuses on the product testing, product focus and product research. There is no separate and unique functional department in marketing oriented approach. On the other hand, product oriented companies do not have a innovative marketing manager (Morgan, Vorhies and Mason, 2009).

The positive and negative aspects of marketing orientation

In marketing oriented approach, the firm is frequently listening and handling to the workplace to see what consumers most effective and dynamic needs are and how these requirements and needs are changing. In a product oriented approach, the firm focuses on making as various products as possible at the suitable cost possible. The organizations that sell in high volume constantly follow such type of approach because the demand or need is always high and intense. The main goal of this approach is to keep pushing out quality products as appropriate price as possible and to increase the profit margin. The companies that adopt this approach focus on making better products and services to attract and retain the customers internationally (Spanjol, Mühlmeier and Tomczak, 2012).

There are various positive and negative aspects of marketing orientation approach that have been discussed below.

• It is noted that marketing orientation render for customer service and support innovation and improvements geared towards particular consumer desired and goals as well. This helps in providing satisfaction to the customers across the globe. In marketing orientation, the organizations focus on the needs, wants and requirements of the customers instead of convincing customers they have a requirement for the goods and services.
• The strategic mistakes and errors can be reduced with the help of marketing orientation approach. A firm with innovative and true orientation knows and analyzes when the market is not ready for a good and service innovation like new technology. In addition, the firm does not waste marketing resources to launch a product that the market would not adopt.
• All the organizations look to attain a high customer satisfaction because doing so maximizes thechances the consumers would come back again and again. A marketing orientation approach permits the firm to view its key target audience as individuals with stable differences in what they want or need (Hill, 2018).
• By implementing the marketing oriented approach, the organizations have all actions and operations aligned with the effective and tactical vision of meeting the wants and needs of the consumers. This helps in explaining and analyzing the role of workers more clearly and effectively. Marketers should perform meticulous research to uncover wants, requirements, wants and convey messages that define or outline benefits (Kokemuller, 2018).
• Marketing orientation approach further helps in increasing and enhancing income and sales of the firm. The marketing oriented concept increases moral, loyalty and satisfaction of the customers.
• All major and dynamic decisions are based on extensive marketing research studies and research in marketing oriented companies (Hill, 2018).

• There is a risk of understanding and evaluating the market. It is one of the biggest and ongoing risks in marketing orientation approach. Due to lack of proper and adequate resources, the companies are unable to fulfill the needs and wants of the customers.
• A global marketplace has maximized competitiveness around all consumer brands. The risk of underestimating the consumer is leading and growing challenges in marketing orientation approach (Joseph, 2018).
• Understanding and evaluating what the consumer needs and requirements is not sufficient to assurance a market share in today’s globalization world.
• Marketing orientation generally needs businesses to rapidly change direction to keep up with changing needs, wants and requirements of their customers. It is a biggest challenge for marketing oriented companies in the market (Joseph, 2018).
• It is further stated that a marketing orientation approach typically requires a heavy and high investment in marketing research just the people can evaluate and predict the changing demands and needs of the customers (McQuerrey, 2018).
• A marketing orientation approach can make it more complex to plan for the future time period. Potential and talented employees are another concern for marketing oriented companies. Broader scope is undergone issue in marketing oriented approach that may put direct impact on the goodwill and financial image of the companies (Joseph, 2018).

The positive and negative aspects of product orientation approach include the following:

• One of the significant benefits of a product orientation approach is that it permits the companies to focus on product quality. By implementing the product orientation approach, the small companies can focus all its efforts and money on the design of the innovative products so it works to specifics.
• Technological advancement and investment are other benefits of product oriented approach. This device is created as a product or good to be sold and not even based on what consumers want at suitable time.
• Economies of scale may develop more easily for the business approach. The company can focus on the certain product with the help of product oriented approach. More quantities could be made at a suitable price that would maximize the number produced.
• A final and effective benefit is that a product oriented approach is easier to accept for outsourcing its products. This further helps in saving cost and time in the international market (Bender, 2018).

• Missed opportunity is one of ongoing disadvantages of product oriented approach.
• Obsolescence and narrow branding also may impact on the brand position and image of the firm adversely (Edmunds, 2018).

It is stated that marketing oriented approach is much better than product oriented approach because by implementing marketing oriented approach, the company can analyze and identify the risks and challenges of the overall market. Along with this, it helps in identifying and evaluating the policies, threats and condition of the market (Hakansson, 2015).

It has been found that marketing orientation and product orientation approach are used by various companies. There are various examples such as Coca Cola, Facebook, Apple Inc, Pizza Hut and Hershey’s chocolate company used marketing orientation approach while implementing the business activities and operations internationally. These organizations understand and evaluate the significance of marketing in generating a well known and dynamic brand in the international market. They inquire and predict the needs, wants and requirements of the customers. Various models like SWOT analysis, Ansoff matrix and STEEPLE analysis are used by the organizations to adjust and identify its orientation. To portray and analyze the corporate growth strategies, the company focuses on the current and potential products and markets. There are four components of Ansoff matrix that have been discussed below.

Market development: It is one of the leading and effective strategies of Ansoff matrix that is used by many companies while functioning at international level. By using this strategy, the organizations have been able to know and analyze the needs, demands and desires of the customers internationally. The company focuses on the packaging, geographical areas and distribution channels to increase and enhance the sale of the products and services. It is more risky and dynamic strategy as compared to the market penetration strategy (QuickMba, 2018).

Market penetration: It is a strategy that helps in selling the existing products in the global market. By initiating this strategy, the firm can increase and boost profitability and market share in the competitive market. Along with this, it can secure dominance of growth markets. This strategy further helps in providing various information and knowledge about the competitors in the global market (Lindemann, Maurer and Braun, 2008).

Product development: The main motive of this strategy is to introduce or launch new products into the existing markets internationally. This approach further may require the expansion and development of new capabilities and needs the business to develop and improve products which may appeal to existing markets. This strategy is needed where product differentiation is essential in order to attain competitive benefits in the global market. A successful and effective product development strategy focuses on the research, development and needs of the customers (Babin and Zikmund, 2015).

Diversification: It is more risky strategy because the business is shifting into the new markets in which it has a little or no experience. The diversification strategy helps the companies to diversify the products in the international market (QuickMba, 2018).

                                         

                                         (Source: https://www.quickmba.com/strategy/matrix/ansoff/)

Along with benefits, Ansoff matrix creates various hurdles and obstacles in the organization. This matrix only shows a theoretical model and it does not take into account the actions and behaviors of external competitors. Predication is quite complex in the organization that may hamper the brand image in the global market (Doole and Lowe, 2008).

Conclusion: 

It is concluded from the above discussed study that marketing orientation and product orientation are biggest and dynamic concepts in the marketplace. In today’s modern world, the companies cannot grow and explore the business functions globally without using marketing concepts such as product orientation and marketing orientation. The marketing orientation approach is much effective and unique as compared to product orientation approach. The above analysis highlights that Ansoff matrix plays a significant and vital role in exercising product orientation and marketing orientation approach.

References:

Babin, B.J. and Zikmund, W.G., 2015. Exploring marketing research. Cengage Learning.

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Doole, I. and Lowe, R., 2008. International marketing strategy: analysis, development and implementation. Cengage Learning EMEA.

Edmunds.S.A.2018. The disadvantages of product orientation to a business [Online]. Available from https://smallbusiness.chron.com/disadvantages-product-orientation-business-45985.html [Accessed as on 8th November 2018].

Hakansson, H., 2015. Industrial Technological Development (Routledge Revivals): A Network Approach. Routledge.

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Hollensen, S., 2010. Marketing management: A relationship approach. Pearson Education.

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Mbaskool.2018. Product orientation [Online]. Available from https://www.mbaskool.com/business-concepts/marketing-and-strategy-terms/8381-product-orientation.html [Accessed as on 8th November 2018].

McQuerrey.L.2018. The disadvantage of market orientation [Online]. Available from https://smallbusiness.chron.com/disadvantages-market-orientation-15818.html [Accessed as on 8th November 2018].

Morgan, N.A., Vorhies, D.W. and Mason, C.H., 2009. Market orientation, marketing capabilities, and firm performance. Strategic management journal, 30(8), pp.909-920.

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Slater, S.F., Mohr, J.J. and Sengupta, S., 2010. Market orientation. Wiley International Encyclopedia of Marketing.

Spanjol, J., Mühlmeier, S. and Tomczak, T., 2012. Strategic orientation and product innovation: Exploring a decompositional approach. Journal of Product Innovation Management, 29(6), pp.967-985.