The difference between production orientation and marketing orientation is best explained as follows
There are two strategies that can affect the operational goals of a business. Marketing orientation focuses on the customer, while production orientation focuses primarily on cost. Both have their strengths and weaknesses, but there are multiple factors that determine which path you may choose to take. Understanding each business model is the key to making the right decision between them, or deciding to combine them. Show
Elements of a Marketing-Oriented StrategyIn a marketing orientation model, a business focuses on identifying the wants and needs of its target audience and determining how many products it needs to make to satisfy those wants and needs. Through the help of marketing people and market research, business owners that pursue this strategy let their customers dictate how many products they make and what type of products they develop. For example, a toy company may discover that its customers want more stuffed animals and fewer action figures. If sales figures confirm this, that company may drastically reduce production of action figures and significantly increase its production of stuffed animals. Elements of a Production-Oriented StrategyIn a production-oriented model, a business focuses on making as many products as possible, at the lowest cost available. Companies that sell in high volume typically follow this type of strategy. The demand is always high, and the goal is to keep pushing out quality products as cheaply as possible to maximize the profit margin. Businesses that adopt this strategy focus on making better products to attract customers, rather than identifying the specific needs of their customers and building products to satisfy those needs. Production-oriented companies have a strong belief that quality is the best type of marketing and that if the price of a product is fair, customers will buy it. Advantages of Marketing-Oriented and Production-Oriented StrategiesThe primary advantage of a marketing-oriented strategy is that it is responsive to the needs of its target audience, which can boost brand identification, loyalty and trust. When customers perceive that a company consistently tries to solve its problems, they tend to reward that company by consistently buying its products. On the other hand, the main advantage of a production-oriented company is that it is always looking to refine and improve its products to make them the best in the industry. That focus on quality often means that a company’s products undergo rigid testing before they are released to the public. It also means that the quality of the product made by a production-oriented company may be superior to that of a marketing-oriented company. Disadvantages of Marketing-Oriented and Production-Oriented StrategiesOne of the main disadvantages of a marketing-oriented strategy is that conducting effective market research is expensive, so the commitment to remaining vigilant regarding customers’ wants and needs comes at a high cost. The main disadvantage of a production-oriented strategy is that competitors may develop a higher quality, less expensive version of your product that may price you out of the business. Another disadvantage is that businesses that focus on production will not be able to adapt and shift their strategy when their buyers’ tastes change. References Writer Bio Sampson Quain is an experienced content writer with a wide range of expertise in small business, digital marketing, SEO marketing, SEM marketing, and social media outreach. He has written primarily for the EHow brand of Demand Studios as well as business strategy sites such as Digital Authority. Image Credit Felipe Dupouy/Lifesize/Getty Images There’s no “right way” to run a business. Business leaders are faced with numerous important decisions each day. The way they choose to approach these decisions can profoundly impact strategic development, business outlook, and—ultimately—sales. The business model you decide to align yourself with may depend on your company’s specific strengths, business goals, and target market
demands. If you’re a small business, deciding which business orientation approach (or approaches) to take can be challenging. Most businesses don’t stick to a single orientation approach. Instead, they’re more likely to combine elements of each alternative. Understanding your business orientation can help you effectively direct your efforts in product development, sales, and marketing. What does business orientation mean?Business orientation refers to how a company or organisation approaches its strategies for success. As a business, being successful means outlining a strategy and following it to achieve your goals. What are the main types of business orientation?There are five types of business orientation that we’ll consider in this article. Understanding each orientation can help you better decide which one best suits your business.
It’s important to note that these approaches aren’t mutually exclusive. In fact, most modern businesses will have their own approach to business that might combine ideas from each approach, or take another one altogether. Let’s take a more in-depth look at what each orientation means, its advantages and disadvantages, as well as some real-life business examples that illustrate how they work. Image source1. Production OrientationProduction orientation definitionProduction-oriented companies focus on the production process and aim to manufacture goods as cheaply and quickly as possible. How does it work?The main goal of this type of company is to reduce costs. Production-oriented companies believe that if they rely on mass production to create a quality product at an affordable price point, customers will buy it. Therefore, it doesn’t matter if the product actually meets their wants and needs. When sales fall, the response of firms with this focus is to lower prices through increased productivity. This philosophy is highly effective in situations where consumer demand is higher than supply. There are numerous examples of companies that take this approach. Notable examples include fast-food chains such as Burger King or McDonald’s, which focus on producing high quantities of fast food at the lowest price possible. Another example is the Ford Motor Company. When Henry Ford developed the assembly line method, he mass-produced relatively inexpensive cars while minimising production costs as much as possible. Some advantages of production orientation include:
However, the increasing popularity of other forms of business orientation reflects the shift towards approaches centred on customer satisfaction and the overall customer experience. The disadvantages of production orientation include:
2. Product OrientationProduct orientation definitionWhen a business takes a product orientation approach, it focuses on its product or service’s quality and performance. This sounds similar to the production approach, but the main difference lies in the customer’s involvement. What is a product orientation approach?When businesses take this approach, their goals are product innovation and improvement. They might create high-quality new products to solve existing customer problems, or regularly survey customers to identify improvement areas. Moreover, they value their relationships with customers and strive to meet their needs effectively. Product orientation strategies focus on:
The company invests heavily in product research and development, guided by customer needs. It emphasises continuously improving and refining its offerings to ensure they remain competitive in today’s consumer-driven society. Thus, they aim to develop products that bring long-term value to the company, and recognise that copycat products dilute the market and erode market share due to price competition.
Source: Photo by Michał Kubalczyk on Unsplash Product-oriented companies are tech-savvy. They can innovate with new technologies to address customer needs—even if they are unknown—and generate market demand. The primary goal is to delight the customer with a high-quality product that caters to their needs better than those offered by competitors. Apple can be labelled as a product-oriented company. Apple focuses on its quality and relies on innovation to enter new markets and create demand. Apple’s product-oriented approach allows them to address the unanswered or unarticulated customer wants and needs with attractive and innovative electronics that offer a competitive advantage over similar products from rivals. Although Apple combines product and marketing orientations, its state-of-the-art tech gadgets are the reason it’s one of the world’s leading companies, second only to Amazon. That being said, Apple leverages customer service and business marketing strategies to drive customer satisfaction and boost brand loyalty even further.
How will our leaders take us forward? Read ‘The role of leadership’ eBook. Download the eBook Advantages of product orientation include:
Disadvantages include:
Image source 3. Sales OrientationSales orientation definitionSales orientation refers to a business strategy in which a company focuses on selling its products to potential customers in target markets. Typically, sales teams will use outbound sales tactics to promote products and drive revenue. What does a sales-oriented business do?Sales orientation emphasises strategies and tactics that push people towards buying a product or service. Often, sales-oriented businesses aren’t focused on long-term results but rather on achieving immediate sales. The focus isn’t on determining consumer desires or catering to customers’ needs, but on building profit margins. Sales representatives in call centres will usually employ outbound cold calling techniques to deliver a sales pitch or inform customers about discounts and promotions. Today, customer demands have changed, and consumers are no longer as accepting of outbound sales methods. Instead, consumer empowerment (across all industries) initiated a shift towards inbound sales/marketing approaches that emphasise building trust and improving the customer experience to boost sales and brand engagement. Image sourceThis approach can be lucrative in insurance, lifestyle products, or automotive industries, commonly implemented. Typically customers don’t seek out these products or services—maybe they’ve never even thought about them—so they’re more likely to allow themselves to be guided towards a sale by a knowledgeable sales rep. The main advantage of sales orientation is that it leads to immediate, short-term sales. On the other hand, disadvantages include a loss of customer confidence, high costs, and the fact it’s not always sustainable in the long run. 4. Market OrientationMarket orientation definitionThis approach prioritises identifying consumers’ needs and delivering products and services to satisfy them. How does it work?The primary focus of sales orientation is on pleasing existing customers and generating sales, and a marketing orientation aims to promote products to attract new customers. A market-oriented business is outward-looking. It focuses on fulfilling its target markets’ wants and needs to achieve success. Resultantly, any customer demand shifts must be addressed and might reflect changes in product or service offerings. For instance, a business with a marketing orientation recognises that customer service demands are continually evolving. Consumers demand more personalisation from businesses, alongside omnichannel support strategies that allow communication across digital channels, including phone, email, and social media. As a result, that business might implement a contact centre solution to serve their customers better. Essentially, market orientation is a customer-first approach as the offering is produced in regards to how it meets customer’ demand and expectation. Image sourceIn today’s competitive environment, most markets are shifting towards a market-oriented approach. As customers have become more knowledgeable and demand better quality and customer service, businesses must adapt their strategies to remain competitive. In other words, their operations can be defined as service businesses, with customer service at the forefront. Key features of a market orientation approach include:
The advantages of this approach include:
However, there are some disadvantages:
A good example of a company that uses this approach is the Coca Cola company. Although we can consider Coca Cola as a company that merges approaches, their market orientation is a key factor in their success. The company has produced numerous memorable marketing campaigns that link the soft drink to experience. Customers no longer drink Coca Cola simply for the taste, but because of what it means to drink it. We can also consider the brand’s response to shifts in consumer health concerns and the development of sugar-free products like Coke Zero that catered to this market.
Photo by Bradley pisney on Unsplash 5. Societal marketing orientationThe final approach is the newest addition to business orientation: societal marketing orientation. Societal marketing definitionWhen a business uses this approach to inform their business strategies, they decide to put human welfare before profits and customer demands. This type of organisation emphasises social responsibility, arguing that to achieve long-term success, their marketing strategy should provide value to customers and improve society’s wellbeing.
How does it work?Societal marketing is a philosophy that focuses on creating a favourable image of a brand or organisation to increase sales. It calls for socially and environmentally responsible marketing that sustainably meets consumer needs while, at the same time, considering how it benefits society as a whole. This approach’s main advantage is that companies can craft a positive public image through ethical, moral, and socially responsible business marketing methods. As the world increases its focus on sustainable ways of living, consumers are more inclined to buy products, which is —of course— the company’s goal. However, this business philosophy does come with some calculated risk and often added costs that come with manufacturing and marketing sustainable products and services. A good example of this type of company is The Body Shop. This UK skincare, cosmetics, and perfume company emphasises that it champions human, civil, and animal rights alongside environmental issues. Moreover, it only uses natural materials in the production of its products. Image sourceIdentifying which approach best fits your businessPerhaps, after reading this post, you’re asking yourself how you can choose the best approach for your small business. The thing is, in today’s modern business landscape, you don’t have to choose just one. These business orientations reflect changes in business and marketing thinking over the last century. Today, businesses can’t afford to concern themselves with manufacturing in-demand products at a low cost. Instead, more and more businesses adopt a holistic approach that focuses on incorporating various aspects of each orientation. There’s no one-size-fits-all when it comes to business. Your orientation approach forms around your business. The way you run your business depends on how your organisation operates, the products or services it offers, its challenges, and the philosophies that you adhere to. One thing’s for certain, today’s age of digital transformation and a global shift towards remote work have changed the way businesses do sales, customer service, and marketing, amongst many other processes. Business leaders must rethink their strategies to align with shifting consumer expectations and demands, through exceptional service, innovative products, and personalised marketing that outshines that of competitors. Whether your business chooses to do this by leveraging new technologies to improve customer experience, inform product development, or develop attractive marketing campaigns to attract and secure leads, business orientation should focus on the customer. Meet your customers where they are, when they want, from wherever you are.
Author Matthew is one of the original Sales team in the EMEA region. He’s worked across all verticals and channels and delivered RingCentral’s solutions to local, regional and international companies headquartered in the UK. More recently Matt has become aligned to RingCentral’s strategic partners success globally supporting large Enterprise deployments to the cloud. Matthew has worked on 3 continents in the SaaS, telecommunications and collaboration space for companies such as NTT Arkadin, BT and Orange Business Services. He’s an Engineering graduate with a curious enthusiasm for technology, customer success and problem solving and a stubborn approach to marathon running. Matthew’s passions are family, musical theatre and rugby. He takes special care to maintain the equilibrium. What is the difference between production orientation and marketing orientation?A product-oriented company can save costs on market research and streamline the production process for its products or services. With a market-oriented approach, companies may be able to increase their customer satisfaction, which can lead to other benefits, like brand loyalty.
What is the difference between marketing and production?The production function focuses on creating new products, managing the quality and quantity of the products, and arranging deliveries. Yet, marketing function concentrates on satisfying customers and meeting their needs.
Which of the following is a difference between productA. A product-oriented organization makes what it can sell; while a market-oriented organization sells what it can make.
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