Product orientation v Production orientation

Product orientation and production orientation are closely related concepts. However, one has more to do with the actual product in focus, while the other has more to do with the production of the product. Additionally, product orientation is typically used more in marketing strategy discussions, whereas production orientation is more of a manufacturing concept.

Production Orientation

Production orientation is a general approach to business that focuses on the manufacturing and production processes. Companies that make these processes primary focuses tend to make operational efficiencies and production optimization key objectives in improvement processes. This orientation was prominent during the industrial era and in the capitalism period of the 1950s. Says Law suggests that if a company produces good products, demand will naturally arise.

Traits

With production orientation, the focus is more on the processes of production than what is actually produced. Narrow product lines, pricing based on production costs, technical product research, packaging focused on product protection, and minimal marketing are all common traits associated with a production orientation. These traits are all opposite a marketing orientation, where the company attempts to drive demand through marketing efforts.

Product Orientation

Whereas production orientation exists when management is more concerned with production efficiency, a product orientation is when management is more concerned with product quality. Managers are often obsessed with their products when a product orientation exists. Managers typically believe their products are unique and offer distinct benefits. They focus on consistent improvement of the product with the belief that an ideal product will effectively sell itself.

Challenges

Product orientation does have challenges and is often downplayed by marketing professionals. Management that is overly focused on technology development and endless pursuit of an optimized product may lose touch with the marketplace. Market-oriented companies research and stay connected with changing consumer tastes. This puts product-oriented companies at a special disadvantage in rapidly changing marketplaces where customer needs and product offerings are constantly evolving.

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Sales Oriented Business

Sales-oriented businesses differ significantly from market-oriented business. Bethe Hart, marketing professional and adjunct professor at both Rutgers University and Immaculata College, explains that a sales-oriented business approach has several defining characteristics that set it apart from a market-oriented business. These include the need for aggressive selling methods, a tendency to plan for the short-term rather than the long-term, the need for heavy promotion and the assumption that consumers will buy the product if the company makes it.

Internet Marketing

One example of a sales-oriented business is an online Internet marketing company that attempts to sell consumers any number of different products. This could be, for instance, a business that attempts to sell software to consumers and other businesses to meet their needs. These types of businesses create products that are based on the assumption that the product will meet the need of the business or individual, whether they have expressed a need for the product or not.

Business-to-Business Sales

Business-to-business sales also provide another example of a sales-oriented business approach. Companies develop products that may benefit a business and then rely heavily upon aggressive marketing tactics to sell them. Examples of products sold in this type of market can include advertising sales or technologies such as point-of-sale software and machinery that will allow the business to run more efficiently and profitably. Chances are the business owner was not initially looking for the product, but did so because the salesperson showed him some benefit to buying it.

Door-to-Door Sales

Another traditionally sales oriented-business model that is similar to the business-to-business model is the door-to-door sales method that some companies rely upon to sell their products. These companies will create a supposedly superior product that can be demonstrated in the home and try to show the potential consumer how it will benefit her in the long run. For example, a salesman selling the "world's greatest vacuum cleaner" may attempt to sell the product to the housewife who has a toddler crawling around on the dirty carpet.

Home Improvement

Various types of home improvement products can also provide the occasion for the establishment of sales-oriented business approach. These, too, are sometimes sold on a door-to-door basis, but they are often peddled over the phone first to get the interest of the homeowner and establish an appointment to show the product. While many consumers do have a need or even a desire for such products and may seek them out in a large retail home improvement store, some will inevitably buy products because aggressive sales and marketing professionals approached or contacted them.

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Sales Orientation v Product Orientation

A sales-oriented company focuses on strategies and tactics that push people toward buying products, while a product orientation tries to pull people into buying. Offering discounts is an example of a sales tactic, while adding a new feature to a product to increase demand is an example of a product-oriented strategy.

Sales Orientation

Sales strategies are often referred to as “gimmicks” because they don’t try to create a long-term demand for a product or service by improving a company’s offering. Many salespeople prefer tools such as discounts, buy-one-get-one-free promotions, free website banners when a customer buys a print ad or other means of stimulating sales. Improving the circulation of a magazine increases the quality of the magazine for advertisers as a whole, but a 25 percent discount to a particular advertiser may seem like a more direct benefit to a less sophisticated buyer.

Product Orientation

Product-oriented companies keep in mind the adage, “Build a better mousetrap and world will beat a path to your door.” This strategy assumes that if you offer a superior product or service, customers will buy from you without your having to resort to discounts or other gimmicks. Product-oriented companies work with marketing departments to learn what the marketplace wants, developing or modifying products to meet these needs. A pizzeria that offers pies with real cheese and fresh toppings might not have to offer two-for-one or other discounts if its competitors sell lower-quality pizzas.

Long-Term Effects

Sales-oriented companies can generate positive short-term sales since customers initially feel good that they are getting more for less. As customers realize they are paying less but getting less, they eventually realize they are not making a good purchase. Discounting your product may eventually cheapen its reputation in the marketplace. Product-oriented companies may take longer to generate sales, but their sales may be more stable long-term because buyers come to believe they are getting the value they need from a product or service. A product-oriented approach to sales might take too long to help a company struggling financially, while a sales orientation might result in fewer long-term customers and eventual financial instability.

Sales Tactics

Product-oriented companies that sell to business often train their salespeople in consultative marketing, which requires the salesperson to learn about the business of a potential customer. This allows the salesperson to better explain to potential clients why a product or service is best for the client. Sales-oriented companies often provide their sales force with discounts, expense accounts and other sales tools, encouraging their staff to “smile and dial.” This means calling potential clients, telling them what they want to hear and offering a benefit beyond the product. A key difference in these two sales strategies is that a sales orientation often attempts to get people to buy things they don’t really need or want, while a product orientation focuses on getting people to buy things they are looking for.

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Market v Production Orientation

Marketing theory has undergone several changes since the birth of capitalism. There are several marketing terms that describe the primary focus of a company's energy and theories behind a certain type of business model. Marketing orientation and production orientation are two of these terms.

Basic Focus

The basic focus of a company with a production orientation is toward maximizing production output. Under a production orientation, a company is succeeding when it is manufacturing as many products as possible at the cheapest possible price. In contrast, a company with a marketing orientation is squarely focused on the consumer. Market-oriented companies respond to marketing research and tailor their products in accordance with what they perceive to be the demands of the market.

Approach to Customers

A business with a marketing orientation is essentially led by the needs of its customers. Marketing research outcomes determine how much of a product is produced--old products may be discontinued and new products invented based on the needs or desires of consumers. In contrast, a production-oriented company does not pay close attention to the needs of its customers and is focused primarily on making the maximum number of products. If customers are dissatisfied with its product, a business with a production orientation is more likely to look for a new set of customers than to alter its product.

Approach to Advertising

A production-oriented company does not focus a great deal of energy on advertising. A business with a production orientation sees itself as fulfilling a need and assumes that as long as customers are aware of their product and can afford, they will buy it. In contrast, market-oriented companies spend a great deal of money on advertising. A market-oriented company carefully cultivates a brand in the minds of potential customers in an attempt to influence them to buy its products instead of a competitor's products.

Stages

Production orientation and marketing orientation describe different stages in the evolution of modern business marketing. Until the early 1900s, many products were scarce and companies could therefore sell as many as they could make. This made advertising and marketing research relatively unnecessary; the way to make money was to manufacture a lot of goods as inexpensively as possible. Most companies began to adopt a marketing orientation during the 1960s. Many companies were manufacturing the same types of product, and customers were able to choose between them; therefore, companies needed to distinguish themselves from their competitors by branding, advertising and introducing new and better products.

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Orientation

Market and sales orientations are different philosophies about how to align and organize a business. Market orientation looks outward toward the customer and focuses all aspects of a business -- not just the marketing department -- on satisfying her needs and wants. Sales orientation looks inward at the business and its need to sell products or services. Market orientation assumes that customers make buying decisions; sales orientation assumes that the customer is reluctant to purchase. Both orientations affect the strategy, processes, organization and culture of a business.

Market Orientation

The key feature of market orientation is the collection and dissemination of customer information throughout the business. Each functional or organizational unit collects and shares buyer influence and customer information. Because knowledge sharing is so important, strategic and day-to-day decisions are made inter-departmentally. Often a market-oriented company creates a highly personalized customer experience.

Market Orientation Approaches

Some business leaders see market orientation as an interchangeable approach to customer orientation. However, Richard Heiens writes in a 2000 “Academy of Marketing Science Review” article that there are differing approaches to market orientation. For example, some market oriented businesses emphasize competitors in their external market analysis. These businesses are called “marketing warriors.”

Market Orientation Concerns

In the desire to serve the customer, a market-oriented business may implement processes and policies that don’t make financial sense or have long-term viability. As such, the decisions a market-oriented company make must serve both the customer and the business. A good way to protect the bottom line is to assess the decisions, processes and policies on a regular basis.

Sales Orientation

Sales orientation focuses on selling products or services rather than on satisfying the wants and needs of customers. This philosophy assumes that people will buy if aggressive sales techniques are used. And as the authors point out in the book “Essentials of Marketing,” this orientation often assumes that sale prices of high value equate to substantial profit.

Sales Orientation Tactics

Because a sales-oriented business is so focused on pushing its product out to the customer, it must rely on aggressive sales techniques. These include intensive promotion, such as advertising, and price-focused strategies. The sales-oriented business also relies on the strength of its sales force to move its products or services.

Sales Orientation Concerns

Some sales-oriented businesses are so focused on the sale they fail to see what is important to the customer. The “Marketing Essentials” authors contend that if the product and services for sale aren’t wanted or needed, an effective sales force just won’t be successful. For example, many dot-com businesses went under in the 1990s because they focused on technology and not selling what the customer wanted.

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