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Difference Market Orientation and Product Orientation

What is Market Orientation?

Market orientation is the scientific study of market behavior. Market behavior is the systematic economic process by which prices relate to demand, production, consumption, technology, information, and other factors. Market behavior can be categorized into five main categories: consumer-based, information-based, individual-based, institutional-based, and regional-based market behavior. Market orientation views include the basic decision-making approach, market science perspective, information-based, socially optimal behavior perspective, and the business-to-business perspective.

Marketing orientations are descriptive and explanatory. A marketing orientation, on the other hand, attempts to create a relation between the theory and practice of marketing. Marketing orientations are descriptive in nature as they deal with identifying, describing, analyzing, and predicting customer needs, expectations, and preferences. Marketing orientations are descriptive in addition to predictive.

The four elements of marketing-oriented orientations are :

  • Identification, 
  • Analysis, 
  • Prediction and 
  • Prioritization. 

Identification: The first element of an orientation model is identification. An indicator must be identified that represents the target market. An analysis is conducted to identify the existing demand and competitive potential of the target market. Then, the next step is to compare the existing customer needs with the competitors.

Analysis: The second element of market orientation is analysis. The analysis will help identify where the weak areas lie and where the strong areas exist. An analysis is important because it will help forecast future trends in demand. 

Prediction: The third element of market orientation is prediction, which is an attempt to provide information on how sales can be improved if certain changes occur.

Prioritization: The final element of market orientation is prioritization. In a customer-oriented context, prioritization is an important function. The top priority for many sales executives is to identify their most important customers and do everything possible to keep them. Likewise, these executives want to find ways to beat their most important customers. In fact, some salespeople actually prefer to sell to their own kind of customers. This is not always a good practice.

To illustrate, let us say that the VP of marketing and sales office develops a new product for the company. Assuming that this new product has a high-profit margin, the company would want to quickly launch it into the marketplace to meet its competitor. To do this, the company would first need to determine who its most important customers are. If the company’s most important customer needs are located in a geographically isolated region, it would be necessary to develop new products that would reach these customers. Similarly, if the company’s most important customer needs are in a relatively densely populated city, it would be necessary to have new products designed to go over the competition.

In the context of International Marketing, there are three distinct categories of marketing orientation. 

  • The first category is Efficient Marketing,
  • The second is Sales Performance Marketing Orientation,
  • The third is Interventions Marketing Orientation.

 At the most basic level, efficient marketing orientation means using the most appropriate methods to market the product or service. By contrast, sales performance marketing orientation means developing new customer needs by using the most appropriate methods for selling the product or service. Finally, Interventions Marketing Orientation refers to using marketing tools and techniques to test the effectiveness of marketing ideas or products.

In summary, each level of management should examine their own personal habits regarding customer needs, market research, buying habits, and product/service development. At each stage, they should examine whether their own buying habits, research, and practices are relevant to meeting customer needs. If a company is unable to align itself with the current preferences of its own employees, it may not be sufficiently market-oriented. In addition, if top management is incapable of effectively aligning itself with the desires of the top management, the interdepartmental rivalry within the organization will continually produce buy-in errors.

What is product orientation?

A product orientation is a process of defining and then designing a solution that will satisfy the customers. It is a set of strategies, products, and techniques used to create the perfect market in a given area. Most organizations today use this method to define a business problem or to come up with an idea for a new product. This orientation is also applied to the whole organization by using a well-defined set of processes and tools. It is actually part of the overall marketing strategy.

Marketing strategy: It’s very important to identify the current business culture and its relation to the product hence maximum effort should be made in improving it. Product orientation, therefore, requires you to develop a marketing strategy that is dependent on the existing market position and products used. You must not just focus on increasing the market share but also consider reducing business barriers such as over-staffing, poor quality, and late delivery. If your company uses a lot of manual activities such as production and distribution, then it would be better to outsource these activities and focus more on sales and market conversion.

Most companies, therefore, prefer to concentrate on one area such as product orientation, and concentrate on increasing their profit margins than focusing on several areas at the same time. There are two major advantages of this approach. 

  • First, it allows short-term focus on developing one aspect of the business at a time. 
  • Second, it prevents excessive expenses on unnecessary activities that might disrupt the production process. For instance, it’s not practical to dispatch trucks and other necessary resources to physically handle product shipping hence there is no need to spend on it.

Customer profile: Another aspect of product orientation is identifying the customer profile i.e. what age group, gender, educational attainment, etc. are going to purchase the product. Usually, it is found that organizations try to sell products to people who fall under a particular age group hence in order to increase profit margins, they target the middle-class section of society. This approach, however, has some disadvantages because most middle-class people don’t find such things interesting so it leads to ineffective marketing strategy implementation.

Market research: In order to avoid such an undesirable outcome, organizations should conduct market research. The main aim of market research is to learn about the consumers’ perception of the product and the service they perceive to be good or bad. Market research can further be categorized into two forms; one based on consumer needs analysis and the other based on brand positioning. Consumer needs analysis is considered important for product orientation strategy since it helps organizations understand what consumers require and how customers perceive the product.

Technology: Another important aspect of product orientation strategy is the identification of appropriate technology. Technology has been found to be very effective in helping companies reach their set goals. However, it is equally important for the company to know how to use this technology effectively in order to derive maximum advantage. Most companies, therefore, use technology tools such as web design tools, search engine optimization tools and software for advertising, customer relationship management tools, and social media tools. These tools can help them improve their online presence and market their products and services.

Market research can further help in deriving ideas for marketing strategies. Although many companies believe that market research results show that consumers are not willing to pay for expensive marketing strategies, it should be kept in mind that a company should not try to implement impractical ideas in place of effective ones. Unreasonable ideas could just end up costing the company plenty of money without actually making a difference to the bottom line.

It is important therefore to incorporate market research in the whole process of product development. All the above-stated points clearly suggest that companies should not ignore market research as a tool for effective product orientation and customer satisfaction. This will ensure that companies make rational decisions based on relevant facts without having to resort to unworkable and unrealistic ideas.

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