Business orientations are classified into the following groups: Production Orientation, Product Orientation, Sales Orientation, and Market Orientation.
Production orientation dominated the business landscapes of the industrial revolution and mid-1900’s; this is where a company is heavily focused on streamlining production processes and concentrating on improving efficiencies with little focus on anything else. Scenario: we can build a car for you, but it comes in black only.
Production orientation is an approach to business that centres its activities on continually improving and refining its products. All efforts are put into making the product better. Scenario: we can offer you non-chip paint on your car.
Some businesses see their main problem as not selling enough of the product or services which they already have available, hence predominantly focusing on sales and selling techniques. As a result, these organisations operate as Sales Oriented companies.
A sales orientated business pays little attention to customer needs and wants and is more concerned about selling. Scenario: if you sign up for the car now we’ll throw in a sunroof.
When a business bases its ability to make profits by using powerful selling techniques to persuade people to buy its products, rather than on customer needs.
This is a culture rather than an individual process. It’s the norms, mindsets, values and behaviours of employers; alongside the structure, systems and control of the organisation. Marketing oriented businesses define their activities as service activities carried out towards the satisfaction of their customers.
In other words, they define their operation as a service business with customer service being the most important activity. They are driven by customer needs which are identified in their objectives. Scenario: we’ll make your car in whatever colour you choose.
A marketing orientated approach means a business reacts to what customers want. The decisions taken are based on information about customers’ needs and wants, rather than what the business thinks is right for the customer. Most successful businesses take a market-orientated approach.
Most markets are moving towards a more market-orientated approach because customers have become more knowledgeable and require more variety and better quality. To compete, businesses need to be more sensitive to their customer’s needs; otherwise, they will lose sales to competitors.
Take the current global car markets; the idea that car manufacturers can create a product and sell its features to the eagerly waiting buying public is no longer an option. With an increasingly global economy and more and more choices for consumers, companies must be willing to adapt their market orientation to stay competitive.
When to use it?
Use market orientations when you want to understand, anticipate and satisfy your customer needs. You may already be operating somewhere in-between orientations. Companies can be anywhere on the spectrum as well as having different products at different orientations.
What does it achieve?
- A sense of what customers want
- Links customer’s needs to company capabilities
- Builds relationships
- Creates vision
- Greater internal marketing and communications
- Tracking and information systems for further research and evaluation
- Audit and analyse the current orientation
- Decide on strategy
- Implement a full marketing mix
- Evaluate and control
Being marketing orientated is more than just being customer-led. It requires the full support of the organisation in order to be fully implemented in the long term and may need a complete change in a company’s culture.