Marketing orientation is the business approach that governs all processes within a company. Marketers and marketing teams, rather than the marketing orientation of the organization, dictate marketing strategies. It describes how the company’s core offering is presented to users, as well as how marketing teams are empowered. Although marketing teams have a say in marketing strategies, upper-level management priorities determine marketing orientation.
These approaches determine the organization’s priorities and processes, as well as, perhaps more importantly, how the organization takes its core offering to market and empowers its marketing teams. An organization’s (and thus its marketing’s) focus is centered on five key categories, which are classified into five orientation groups: Production Orientation, Product Orientation, Sales Orientation, Societal Orientation, and Market Orientation.
Production Orientation
A production-oriented organization typically employs a mass production model and streamlines the manufacturing process for its product offering. Because this orientation approach assumes that its customers value price, it focuses on lowering production costs to meet the price needs of this customer base. This price is thought to be the main value proposition of the production-oriented organization’s key offering, with resources focused on operations and key marketing communications centered on price-based messages.
However, because the approach does not necessitate learning anything about the customer base, the assumption that price is king is not always indicative of the needs and desires of the target audience. It assumes that its customers want the cheapest product possible and will work hard to achieve that price. Production orientation dominated the business landscapes of the industrial revolution and the mid-nineteenth century; this is where a company is heavily focused on streamlining production processes and improving efficiencies with little focus on anything else.
Advantages
- Economies of scale
- Efficiency
- Low cost to customers
Disadvantages
- Disregards customer needs
- Set-up costs are usually high
Product Orientation
Product orientation is a business strategy that focuses on constantly improving and refining its products. Every effort is made to improve the product. A product orientation approach is sometimes mistaken for a production orientation approach. This, however, is not the case. This business strategy is concerned with its products and is constantly improving and refining them so that the product is always superior to its competitors. As a result, whereas the previous orientation was focused on price, product orientation is focused on quality, which frequently raises the price. Premium products fall into this category, but the approach does not always provide what the target audience desires or take into account the factors that the audience uses to make a purchasing decision. Product Orientation disregards external factors in favor of producing a high-quality, premium product that is superior within the market in which it operates and competes.
Advantage
- Focus on quality
- Innovation
- Skills development/outsourcing
Disadvantage
- Potential missed market opportunities
- Obsolescence
Sales Orientation
A sales-oriented company devotes the majority of its resources to selling its products and services to its target market. It does prioritize its customers in some ways, but not in the sense of listening to their needs and desires; it simply wants to sell to them. Existing products are typically assigned to sales and marketing teams, who are tasked with locating buyers for those products, wherever and whomever they may be. Some businesses see their main problem as not selling enough of their existing products or services, so they focus primarily on sales and selling techniques. As a result, these organizations function as Sales Oriented businesses. Many businesses will believe they are not selling enough of their products and will, as a result, employ sales-oriented techniques to focus the organization on selling more and increasing profit margins.
A sales-oriented company is more concerned with selling than with customer needs and desires. Disregarding customer needs and employing aggressive outbound sales techniques is a strategy that rarely works in the long run. This is especially true now that the general “customer” (regardless of industry) is more empowered than ever before and values relationships in sales processes, particularly in B2B pharma sectors. That is not to say that organizations cannot succeed with this approach. In today’s sales-oriented organizations, the inbound sales/marketing approach has emerged as appealing. A company’s ability to profit is based on its ability to persuade people to buy its products rather than on customer needs.
Advantages: Immediate short-term sales are generated.
Disadvantages
- Risks customer confidence
- Costs
- Not always sustainable
Societal Orientation
As people become more aware of their surroundings, the world, and the societies in which they live, the societal orientation approach has emerged, providing organizations with a new organizational philosophy. The societal orientation organization, in terms of product, process, and marketing, focuses on the impact its organization and products have on the societies in which it operates, as well as the larger environment. This type of ethical consideration has grown in popularity in the pharmaceutical and life science industries. However, in competitive markets, this approach can be difficult to sustain, particularly for small to medium-sized businesses where profits and customer satisfaction can influence how the environmental and societal orientation approach is implemented.
Advantages
- Image is enhanced
- Appeals to upcoming markets
- Ethical
Disadvantages
- Marketing message is sometimes distorted
- Limited budget
Market Orientation
Market orientation is a business strategy in which product development and creation processes are centered on meeting the needs of consumers. It is a marketing orientation technique that designs products with desirable qualities for consumers, which differs significantly from the traditional marketing approach. This is a cultural process, not an individual one. It is the norms, mindsets, values, and behaviors of employers, as well as the organization’s structure, systems, and control. Marketing-oriented businesses define their activities as service activities geared toward customer satisfaction.
A market-oriented organization examines the market and its target audience before beginning any production or sales activities to learn what potential customers want from organizations. A marketing-oriented approach implies that businesses respond to what customers want. Decisions are made based on information about customers’ needs and desires, rather than what the business believes is best for the customer. The majority of successful businesses take a market-oriented approach. As a result, the product or service offering is designed with the customer in mind, resulting in a truly customer-first approach. In the traditional approach, the company prioritizes the promotion of existing products by developing features that can be key selling points. Market orientation principles are used by companies such as Amazon and Coca-Cola, whereas luxury goods companies such as Louis Vuitton and Chanel take a more traditional approach.
Market orientation, in marketing strategy terms, commonly revolves around culture, values, and other internal behaviors aimed at satisfying customer needs that have typically been well-researched in advance. Market orientation is more of a product design approach than a promotion approach. It means that instead of engaging in any promotional or sales activity, the priority is to analyze the target audience and determine their needs. The needs are considered when developing and improving the product offering. A customer-centered approach is taken by a market-oriented organization, which means that the consumer base’s most pressing concerns, immediate needs, and personal preferences must be researched. The strategy must be centered on the values, culture, and other behavioral characteristics of the consumer base. As a result, the organization’s development efforts are focused on the most widely demanded characteristics. This allows businesses to adapt to different markets and increase their competitiveness.
Most markets are shifting toward a more market-oriented approach as customers become more knowledgeable and demand greater variety and higher quality. Businesses must be more sensitive to their customers’ needs in order to compete; otherwise, they will lose sales to competitors. Although this clearly has advantages, it can also be costly to organizations because it puts them on the defensive, always reacting to customer demands rather than anticipating or shaping them with innovative products and services. Having said that, most markets are shifting toward a more market-oriented approach as customers gain greater access to information about what they want to buy.
Advantages
- Customer satisfaction
- Loyalty
- Continual investment in research
- Product differentiation
Disadvantages
- Reactive
- Not always innovative
- Market always changing
Examples of Market-Oriented Companies
Amazon is constantly changing the virtual marketplace and adding features to address consumer concerns. One such feature is the online retailer’s rating and review system, which was implemented to increase credibility. To address issues with delivery charges, the company launched Amazon Prime. Furthermore, it developed the Amazon Locker, a self-pickup service for customers who may not be present at the shipping address specified at the time of delivery.
Coca-Cola invests heavily in research to create new flavors for its customers. For users concerned about sugar content, the company introduced zero-calorie Diet Coke and made several acquisitions of “healthy” brands such as Dasani, among others.