Differences in Product Orientation vs. Market Orientation

By Indeed Editorial Team

Published May 2, 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Certain practices can assist a business in focusing more on what customers want or need, or how to improve a product. Market and product orientation enable businesses to concentrate their efforts on a single growth aspect. Knowledge of what both marketing strategies entail can assist you in making good business decisions. In this article, we explain the difference between product orientation vs. market orientation, discuss the meaning of both types of orientation, and provide tips to help you determine your target market.

Product orientation vs. market orientation

Here are some distinctions between product orientation vs. market orientation:

  • Definition: A product orientation is a marketing strategy in which a company focuses exclusively on a single product, putting the most significant emphasis on the product's quality and performance. Market orientation is a business culture that emphasizes customer satisfaction.

  • Focus: While product orientation remains entirely focused on the product's quality, market orientation concentrates entirely on the customer's needs and satisfaction.

  • Organizational aim: A business that follows a product orientation strategy strives to create high-quality products that attract consumers. A company using the market orientation strategy seeks to discover consumers' needs and respond to the needs in the best possible manner, hence satisfying the customers.

  • Tools used: Product orientation utilizes various tools, including product research, product testing, and product focus. Market orientation utilizes market testing, market research, and customer focus tools.

  • Advantages: The pros of a product-oriented approach include the reduction of costs associated with researching customer preferences, the ability of a company to focus exclusively on a product resulting in superior quality, and the simplification of the manufacturing process. The benefits of a market orientation strategy include the advancement of customer loyalty through client satisfaction, the probability of long-term business development strategies through impractical consumer suggestions, and production flexibility.

  • Disadvantages: The disadvantages of a product orientation strategy include the fact that products may require improvements each time changes in technology occur and can cause numerous missed market opportunities to exploit. Disadvantages of a market orientation strategy include high market research costs, continuous internal change that may be disruptive, and future uncertainty.

Product orientation

A product-oriented business exerts focus on its products rather than on customer needs. Products are a critical component of a business's function, and a focus on products can cause increased innovation within the organization. Product-oriented businesses frequently operate on a mass-production model or one that focuses on producing as much of a product as possible to meet demand. By concentrating on producing in mass, manufacturing companies offer lesser prices for their goods, attracting additional customers. To accomplish this, you can use fundamental tools such as:

  • Product exploration

  • Product evaluation

  • Product focus

Benefits of a product-oriented approach

Many entrepreneurs get motivated by their commitment to their products. Numerous restaurateurs offer their services to showcase their outstanding cuisine. When individuals pursue this passion, a number of benefits accrue. If you're already familiar with the industry, for instance, you may have a good idea of which products can sell well.

Product-oriented businesses typically concentrate on their strengths and manufacturing products they excel in producing. If you have a loyal customer base that likes and respects your work, you may be able to sell products with little marketing, thereby lowering your marketing costs. Reliance on consumer trends and market surveys can result in creating products that are not a good fit for your business, something you want to avoid when you already have an established customer base.

Related: What Is an Orientation Checklist, and How Do You Write One?

Market orientation

Market orientation is a business philosophy that focuses on the customer's needs and desires. Businesses that prioritize market orientation frequently work to establish a company culture that prioritizes the needs and desires of their customers. By demonstrating to customers that they are a priority and that the business exists to serve them, a market-oriented approach can help a company earn their trust and loyalty.

Market orientation concerns itself with the following:

  • What customers desire

  • Developing and maintaining customer relationships

  • Keeping track of data used for evaluation and research

  • Establishing a link between customer requirements and organizational capabilities

You can use the following tools to accomplish this:

  • Market analysis

  • Market testing

  • Customer focus

Types of market orientation

Market orientation is a broad term that encompasses several distinct business orientations, including the following:

Societal orientation

The societal orientation approach places a premium on the impact of the business on the world around it. These businesses develop products and services that benefit the environment, specific demographic groups, or the community in which they operate. By accepting social responsibility and promoting social causes that empathize with its customers, a societal orientation can benefit the business' image.

Sales orientation

A sales-oriented approach exerts its focus on selling products to the customer. While sales orientation is somewhat customer-centric, the business' primary aim is to generate revenue and move inventory. This approach benefits the business by increasing profit margins and increasing its appeal to the target audience, though some customers may view this as uncaring or negative. To address this, many businesses may adopt a hybrid model in which market and sales orientations coexist to create a culture that prioritizes customer needs and the bottom line.

Benefits of market orientation

Adopting a market orientation strategy for your business may provide numerous benefits, including the following:

Increased customer confidence and loyalty

Customers may develop a greater trust in a brand if it meets their needs explicitly. When a business adapts its products, services, or practices to meet the needs of its customers, it may feel more valued and important. When a business treats its customers well and works to meet their needs, it may experience significantly increased loyalty from those customers who choose the brand over other competitors.

Related: How to Create a New Employee Orientation Program in 8 Steps

Increased capacity to meet needs

Frequently, customers express their needs explicitly. For instance, a customer who wishes to see a brand use higher-quality materials in its shoes may express this desire in a review or directly to its customer service team. Some customer needs are implicit and thus more challenging to satisfy. Often, even the customer is unaware of the extent to which those needs exist. By establishing a market orientation for the business, the brand can research market trends, customer trends, needs, and customer service history to identify and meet unspoken needs.

Enhancement of brand image

The image of a brand gets determined by how the customer perceives it. A brand's image can influence the brand's market success and the number of new customers who purchase from the company. By focusing exclusively on customer needs, the company can help reinforce a brand image that emphasizes customer service, community involvement, and a commitment to continuous improvement. This can contribute to the development of a positive brand image, thereby increasing customer confidence in the company and its products and driving traffic to the company's website or storefront.

Enhancement of product quality

Market-oriented brands typically respond to customer needs with higher-quality products and services. While these products and services may be more expensive for customers, they are purchasing an item made of durable materials. This builds customer confidence in the business and helps differentiate it from the competition in the larger market.

Healthier company culture

Market-oriented brands may adopt a social company culture for their employees, resulting in a positive, customer-focused culture. This can boost employee confidence and improve customer-employee interactions. Employees may concentrate on memorizing customers' names, recalling their preferred products, or attempting to meet all the customers' needs.

Related: What to Expect From a Job Orientation (With Different Types)

Tips for defining your target market

Here are a few methods for identifying and defining your target market:

  • Examine your current customer base. Consider your existing customers and why they purchase your goods and services. Look for common characteristics among customers who are interested in your goods and services.

  • Analyze your competitors. Determine your immediate competitors' target market and why they are their ideal customers. Determine a comparable niche market by examining how they promote product features and benefits.

  • Analyze your product or service thoroughly. List the features and specifications of your product to understand better what motivates consumers to buy from you and get a better sense of who can benefit most from your business. Determine the need that your product or service fulfills and consider how your product might help your consumer overcome a challenge.

  • Recognize ideal customer groups. Once you've defined your ideal customer, look for groups that share all or some of these characteristics. Create a list of prospective customers and companies whose wants your product or service may meet.

Explore more articles