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.
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.
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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In general, the phrase marketing orientation is a marketing term, whereas market-oriented is typically an economics term. Marketing orientation means a company operates with a market- or customer-first approach. Market oriented is used in marketing, but it more typically describes a free enterprise economy where businesses and consumers are able to buy and sell freely.
Marketing Orientation Basics
When a company has a marketing orientation, it makes meeting the needs or wants of its target customers its primary business motivation. This includes responding to stated consumer needs by developing new products, improving on exist products or improving services. Companies with especially strong marketing orientation may even detect consumer needs before the general market is aware of them. These companies are usually cutting-edge innovators that try to give customers what they want faster than competitors.
Versus Product Differentiaton
To better understand marketing orientation, you can compare it to product orientation. Companies with a marketing orientation are commonly called customer-centric, but companies with a product orientation are called product-centric. One difference is that marketing-oriented companies make marketing research and responding to customers the focus. Product-oriented companies typically make product research, development and improvements the focal point, and then market the results to consumers.
The phrase market-oriented is used in marketing conversations as an adjective describing a company with a marketing orientation. Market orientation more describes the company's approach to doing business. Market-oriented defines the company itself. If a company is market-oriented, its board and executive leadership believe that the best way to succeed is to prioritize the marketplace above products. This usually goes over well with customers, but the company also must have adequate research and development to provide what the market wants.
Though the phrase market-oriented is used in casual conversation to describe a company with a marketing orientation, this phrase is more often considered an economics phrase. A market-oriented economy or system, like the United States free enterprise system, allows for a generally free market for companies to sell and consumers to buy. Politicians or economists who believe in less government involvement and regulations in business are often referred to as market-oriented economists. They typically support a more open business environment where the marketplace dictates whether companies succeed or fail.
About the Author
Neil Kokemuller has been an active business, finance and education writer and content media website developer since 2007. He has been a college marketing professor since 2004. Kokemuller has additional professional experience in marketing, retail and small business. He holds a Master of Business Administration from Iowa State University.
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