A Comprehensive Analysis of Marketing Orientation and Product Orientation: Pros and Cons

By Ahmad Fuad

​Introduction

​There are two distinct approaches that companies apply: the market orientation approach and the product orientation approach. The product orientation approach is based on manufacturing high-quality products, while the market orientation approach relies on producing products based on customers’ needs and wants.

This report aims to determine the benefits and drawbacks of product orientation and market orientation strategies. The report also includes a SWOT analysis, and the conclusion will evaluate which approach is better, more efficient, and more likely to achieve long-term profit.

Advantages of Marketing Orientation
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“Customer orientation is based on an ‘outside-in’ perspective and is rooted in the cultural belief of putting the customer and his/her needs first” (Buttenberg, 2017). By making consumers’ needs a priority, firms are more likely to create services that meet those needs.

This means consumers will be more satisfied with the service, which eventually increases the likelihood of repeat purchases and reinforces brand loyalty. Based on SWOT analysis, this is considered a strength for marketing-oriented companies. With a constant consumer focus, firms can make modifications over time and respond to market demands to improve services and products.

In addition, market orientation strategies require a harmonized effort across the business. Different departments, such as production, finance, and human resources, must work together from a marketing perspective to ensure they continue to meet clients’ needs. This helps clarify the roles of staff members.

For example, marketers conduct thorough research to identify needs and deliver messages that clarify how products match customers’ needs. Furthermore, the production department focuses on modifying products to meet consumer demands.

Additionally, support and service teams must be able to gather feedback from consumers and report it to production and research departments. Hence, this strong collaboration between departments is considered a strength according to SWOT analysis.

Furthermore, market-oriented companies can achieve financial sustainability. A study based on data from the largest microfinance institution in Malaysia found that companies applying the market orientation approach are more likely to achieve financial sustainability (Shuhidan et al., 2016). This is considered a strength in SWOT analysis.

Moreover, when a company consistently offers what customers truly need and want, it can generate long-term profit, which is also considered a strength. For example, a firm can turn one-time consumers into loyal customers over time.

Loyal customers purchase repeatedly and in larger amounts, are willing to pay higher prices, and are less likely to switch to competitors. Thus, a firm has a higher probability of remaining viable and prosperous as long as it applies the marketing orientation (Kokemuller, 2018).

Disadvantages of Marketing Orientation

Excessive commitment to clients and market demand can lead a firm to follow trends too closely, especially for manufacturers of luxury goods. This can reduce the company’s ability to differentiate its products from competitors.

For instance, if the trend in women’s fashion watches favors a specific design and gold finish, watchmakers might produce watches with identical appearances. As a result, products look alike, leading to a loss of brand identity. According to SWOT analysis, this is a weakness that marketing-oriented companies should be aware of. Additionally, it can obstruct brand recognition for new businesses.

Marketing-oriented businesses must also spend heavily on research to understand customers’ needs. If a company lacks in-house expertise, it may need to hire a marketing research company or consultant. Both in-house and outsourced research are expensive and time-consuming.

Small companies often cannot invest in this type of research due to limited capital, and attempting to apply this approach can create difficulties. Therefore, according to SWOT analysis, this is a weakness for small businesses (Burch, 2018).

Additionally, market orientation requires companies to adapt quickly to changing client demands. This may force companies to abandon a product or service in which they have invested significant time and money. Frequent changes to internal processes can also create challenges for employees, which is considered a weakness according to SWOT analysis. Companies that fail to adapt risk losing market share to competitors (Joseph, n.d.).

Advantages of Product Orientation

“Product-oriented companies offer specific ranges of products, often based on a structure that allows solutions to be repeated” (Lessing and Brege, 2015). One benefit of a product-orientation approach is that it allows a company to focus on product quality.

“In production-oriented businesses, provider and customer communicate through the products themselves” (Gebauer, Joncourt, and Saul, 2016). With the product-orientation approach, companies focus on creating a perfect product rather than prioritizing customer needs.

A small company can concentrate its resources on service quality, which is a strength according to SWOT analysis. Moreover, it encourages technological innovation. For instance, Sony, a product-oriented company, created the Walkman as an innovative product. Sony did not develop it according to consumer needs, yet it succeeded. The technology was later used to produce other music devices (Bender, n.d.), demonstrating that advanced technology is a strength based on SWOT analysis.

Another benefit is that economies of scale can be developed more easily. Companies applying product orientation focus on specific products, so producing more units reduces the cost per unit. This enables large-scale production at a lower cost, which is considered a strength in SWOT analysis.

Product orientation also allows companies to outsource production efficiently. For example, a company can focus on perfecting one product and then transfer its design to another manufacturer to produce it at a larger scale and lower cost (Bender, n.d.).

Disadvantages of Product Orientation

If a company focuses its brand and sales message solely on product quality and features, new competitors can reduce the current product’s selling advantage, potentially putting the company out of business. This is a threat according to SWOT analysis.

For example, without a brand image showing the benefits offered, consumers may doubt whether the company meets their needs. Additionally, companies using a market orientation approach often gain opportunities for add-on sales to existing customers.

Satisfied consumers value opportunities to suggest solutions to businesses they know, trust, and like. Product-oriented companies may miss these opportunities. Limited attention to customer needs can lead to a decline in loyal customers, which is a weakness according to SWOT analysis.

A major drawback of product orientation is that if a company’s main project fails or becomes less relevant, the company may struggle. Product-oriented companies often neglect market changes and customer needs, and if a product cannot sell itself, they face significant challenges (Kokemuller, n.d.).

Conclusion

In conclusion, “the contention that firms must identify and satisfy customer needs more effectively than their competitors has long been a hallmark of the marketing concept” (Line and Wang, 2015). The market orientation approach is more effective than the product orientation approach because it increases repeat purchases, boosts brand loyalty, and uses market insights to improve products.

Additionally, it can achieve financial sustainability and generate long-term profit. However, companies may benefit from applying elements of both approaches to create a comprehensive marketing strategy (Kenton, 2018). Nevertheless, businesses should prioritize the market orientation approach above others.

Resources

• Bender, J. (n.d.). The Advantages of Product-Oriented Businesses. Chron.
• Burch, J. (2018). Advantages & Disadvantages of Having a Marketing Orientation in an Organization.
• Buttenberg, K. (2017). Development of customer orientation, brand orientation, and business performance within the first ten years of the firm.
• Gebauer, H., Joncourt, S., and Saul, C. (2016). Services in product-oriented companies: past, present, and future.
• Joseph, C. (n.d.). Disadvantage of Market Orientation. Chron.
• Kenton, W. (2018). Market Orientation. Investopedia.
• Kokemuller, N. (n.d.). The Disadvantages of Product Orientation to a Business.
• Lessing, J., and Brege, S. (2015). Business models for product-oriented housebuilding companies.
• Line, N., and Wang, Y. (2015). Market-oriented destination marketing: An operationalization.
• Shuhidan, S., Said, J., Mokri, S., and Kazemian, S. (2016). Market Orientation within Technological Companies: Risk-Based Approach.