Until the 1950s, a majority of companies relied on the production orientation concept. This idea assumed that as long as they produced high-quality products, businesses would remain profitable. However, in today’s hypercompetitive global markets, where consumers have a proliferation of choices, companies have to maintain a competitive edge to beat the competition.
That’s where market orientation concepts come in.
What is Market Orientation?
Market orientation is a business approach focused on identifying and meeting the needs and preferences of customers in the marketplace. Companies that adopt a market-oriented strategy prioritize understanding customer desires, preferences, and behaviors to develop products or services that align with those needs. Businesses have to adapt to new marketing strategies to survive the current market, like the shift from traditional to digital marketing.
The “customer is king” philosophy has emerged as a guiding principle for numerous companies that emphasize market orientation strategies. This approach ensures that prioritizing client satisfaction takes precedence over industry profits.
In this post, we will explore 5 different marketing orientation approaches that may affect an organization’s marketing strategy.
Understanding these concepts is critical to helping you assess whether your approach is bringing the desired results that meet your organization’s missions and goals.
Summary of Marketing Orientation Concepts
Marketing orientation can be categorized into five key groups. These are:
1. Production orientation: This approach aims to maximize production efficiency while reducing costs to align with customers’ pricing preferences.
2. Product orientation: It’s a strategy that prioritizes quality, assuming consumers will purchase and use products as long as they maintain high quality.
3. Sales orientation: This concept prioritizes customers with the sole aim of boosting sales.
4. Societal orientation: It encompasses strategies and manufacturing methods that acknowledge their impact on the environment.
5. Market orientation: This model revolves around meeting customer needs and ensuring satisfaction by responding to their demands.
We look at the impact of each concept on businesses, and their advantage and disadvantages.
1. Production Orientation
This concept dominated the business landscape in the 1900s, where organizations focused heavily on the mass production of products. Emphasis was on streamlining the production process and concentrating on improving efficiencies, with little focus on consumers or anything else.
The assumption was that customers valued price. For this reason, this approach focused on maximizing efficiency while lowering production costs to meet customers’ price needs. This business strategy dedicated its resources towards its products, and its marketing point was the price.
Advantages of Production Orientation:
- Mass production
- Maximum efficiency at the lowest costs
- Distribution of products inexpensively
Disadvantages of Production Orientation
- This approach lacked the fundamental drive that controls the consumer market, that is, customer needs.
- The emphasis on efficiency may affect the company’s ability to produce a product that meets the customer’s high demands.
2. Product Orientation
In a product orientation model, the primary concern of an organization is the quality of the product. The business centers its approach on continually improving and refining its products. Assuming that as long as products are of high quality, consumers will buy and use them.
This approach, which was popular during the 1950s and 1960s, mainly focused on the product that a company intends to market. Unlike in quantity-oriented organizations where the price was the focal point, product orientation placed emphasis on quality.
While all resources were directed towards the quality of a product (hence the production of premium products), the approach didn’t focus on the needs of its target audience.
Advantages of Product Orientation
- Mass production of products at lower costs
- Focus on quality
- Improved sales due to the high quality of products
- Better market research
Disadvantages of Product Orientation
- Narrow branding. Customers identify with brands, and if you don’t develop a brand that resonates with their needs, they may not be interested in what you’re selling.
- High risks of running out of business. Without a clear message explaining to customers the benefits of using their products, a competitor with a better message can run you out of business.
- If you haven’t established your reputation in the marketplace, consumers may not trust you to deliver.
- Your business solely depends on the strength of your product. Customers expect nothing but top-notch quality.
- Making a profit on premium products may require you to set a higher price tag than the market can accept.
- The costs of developing top-quality products are steep.
3. Sales Orientation
A sales-oriented business puts its energy and efforts into selling an already existing product. In a way, this concept prioritizes customers but not in the sense that stresses their needs and desires. Instead, priority is on promoting its products with the sole purpose of increasing sales.
A sales-oriented approach can be especially effective for a business competing for customers in a saturated market. It can also be a valuable tool for a firm that holds dead stock and wants to reintroduce them to the market.
The extra effort that the sales and marketing team devotes towards selling a product may tip a consumer’s buying decision.
Advantages of Sales Orientation
- It generates immediate short-term sales.
- If a company’s product or service is the best in the market, selling it should be easy.
- Aggressive selling tactics may influence a consumer’s purchasing power.
- Broad customer reach for unsought goods. Companies can introduce products or services that customers don’t know about or don’t even need and use aggressive sales techniques to boost sales.
Disadvantages of Sales Orientation
- Customer loyalty and confidence are at risk since they are pressured to buy what they don’t want.
- High risk of ‘backlash’. Running a promotion campaign is costly, and it can lead to losses if consumers resist the product or service.
- The approach is not sustainable in the long term.
4. Societal Orientation
Due to the increase in environmental awareness, the new concept of “Societal Orientation” has emerged. Organizations are formulating marketing strategies and production processes that recognize the impact on the environment, within and without.
Businesses that implement this idea incline towards the ethical approach in their wider marketing and research strategies. A good example is the pharmaceutical industry and life science sectors, which have come under scrutiny for their unethical marketing strategies.
Advantages of Societal Orientation
- Promotes ethical practices
- Helps build a better image for the organization
- Increases a company’s sales and market share
- Economic resources are adequately utilized
- Raises the standard of living of people in society
Disadvantages of Societal Orientation
- The marketing message can be misleading
- Budget limitations
5. Market Orientation
Market-oriented businesses focus on analyzing the target audience to determine their needs and design a product to fit those needs. This business model centers everything around what the customer wants rather than on promotions. Market orientation revolves around customer satisfaction and reacting to the demands of the customer.
Marketing oriented organizations approach their operations from a consumer perspective and focus on the current and future needs of customer needs. The entire firm appreciates the significance of the customer and recognizes that the business won’t exist without them.
The marketing orientation concept is built around three pillars:
- Customer focus – The customer is at the heart of corporate marketing strategies. They are considered the most important stakeholders, and companies base their philosophies on serving the customer to ensure his needs and wants are met.
- Coordinated marketing – The success of any company depends on coordinated team efforts. It’s a company-wide responsibility, and everyone must work together to achieve a common goal.
- Profitability – In a fiercely competitive global economy, businesses are constantly under pressure to prove their financial standing every quarter. Within the framework of marketing orientation, companies’ profits are driven by both financial (ROI and market share), and non-financial (behavioral patterns, attitude, and awareness) measures.
Each company strives to develop an orientation towards one of these pillars, depending on its internal structure and culture.
The widespread adoption of Internet technology has contributed to the shift toward marketing orientation. Customers have grown increasingly discerning, and social media has become one of the primary sources of customer outreach.
In a market orientation concept, companies don’t just introduce products or services to customers. It’s a long process that starts with researching the demographics and demands of the target audience. It also involves rigorous marketing efforts to convince potential customers to make a purchase decision.
Advantages of Market Orientation
- The consumer-centric approach helps an organization to know what the customers really want, hence avoiding wasting resources.
- It builds a strong customer relationship. In turn, customers help the company grow and thrive.
- It increases customer satisfaction, confidence, and loyalty.
- It increases sales, which also leads to higher volume and market share of a business entity.
- Listening to the needs of the consumers helps a business create and develop a brand that customers can identify with.
- Businesses using this concept are more resilient to change than their competitors.
- The customer-focused approach fosters product innovation.
- Customer satisfaction encourages buyer feedback, which in turn improves effectiveness and efficiency.
Disadvantages of Market Orientation
- Businesses must learn to quickly change direction to keep up with the constantly changing demands of their customers.
- It takes heavy investment in research to understand the ever-changing needs of consumers.
- This approach may not always be innovative since it’s more concerned about meeting the desires of consumers than creating new products.
Choosing the Marketing Orientation Approach That Best Fits Your Business Model
Throughout the years, we’ve seen organizations shift from one approach to another to conform to the changes in consumer behavior. Intel Corp shifted from a product orientation to a market orientation approach in 2005 and introduced products that solve customer problems like computer crashes.
Amazon implements a market approach, and it has been consistently adding features that address consumer desires and concerns like delivery fees. It introduced Amazon Locker to address the needs of city dwellers who are worried about getting deliveries when they are not at home.
Coca-Cola’s market-oriented approach involves extensive research into identifying what tastes customers prefer and then adding new flavors to their products. The company prides itself on its brand and has expanded its reach by acquiring brands like Dasani, Minute Maid, and SmartWater.
Different approaches work differently for companies. Choosing a marketing orientation approach should revolve around how an organization was established, its culture, and its structure.
Regardless of the approach your organization takes, you can positively influence the effectiveness and efficiency of your teams through proper employee management and monitoring. A time tracking app like Traqq allows you to track the progress of each product or project, as well as monitor the activity levels of employees.
The program records the hours worked by each employee, and you can use the data to analyze and compare their productivity levels and performance. Traqq ensures data accuracy, and thanks to its desktop app, which can track your time even when you’re offline, every minute is accounted for.
That’s not all. Along with ethical employee tracking, Traqq is secure and GDPR compliant. This means that you can be guaranteed your data is safe from unauthorized access. Plus, you have full control over your data, and you can delete any information as you wish.