Businesses that favor the product orientation philosophy assume that product quality is a determinant of demand in the market. In other words, they believe customers will purchase a product based on superior quality, performance, or features – regardless of whether the product suits their individual preferences. Therefore, Product orientation is a marketing management philosophy where the promotion of high-quality products is used to generate sales.
Product orientation is design-focused and commonly associated with research and development, so it is perhaps no surprise that many product-oriented companies are tech companies.
They can innovate with new technologies to address customer needs and generate market demand. Sometimes, the customer needs are unknown or yet to be identified.
Product orientation is sometimes called the “no fear strategy” because there is the implication that the business is bold, proactive, and comfortable with risk.
By prioritizing what it is good at, the business also assumes customers will adapt to whatever product it releases on the market.
Examples of product-oriented companies
Some examples of mostly product-oriented companies include:
Apple – a company famous for envisioning products before consumers knew they needed them. Apple relies on quality and innovation to enter new markets and create demand with products such as the iPod, iPhone, and iPad.
Netflix – though technically a service, Netflix made companies such as Blockbuster obsolete by giving consumers easy access to movies and television shows. The company capitalized on faster data speeds and recommendation algorithms to provide something consumers would not have thought possible.
Robinhood – the Robinhood investing app revolutionized trading for the average investor by making the market more accessible. The company developed an innovative product by removing the once prohibitive brokerage fees for retail investors and enabling them to trade in smaller increments.
Advantages and disadvantages of the product orientation approach
Advantages
Higher product quality – businesses that use the product orientation approach devote less time and energy to marketing and sales and more to product development. Product teams with a quality-first mindset are also free to work without restrictive deadlines that cause development to be rushed.
Continuous innovation – by its very nature, continuous innovation enables a business to become the first mover in a new industry and importantly, maintain that advantage. What’s more, businesses that demonstrate the ability to innovate regularly tend to enjoy a brand following that is hard to replicate.
Disadvantages
Competition – while Apple will always have the premium end of the consumer electronics market cornered, there do exist individuals who balk at the price tag of Apple products. This has allowed competitors like Samsung and Sony to leverage Apple’s innovation and introduce cheaper alternatives.
Product failure – the product orientation approach can be successful, but it is by no means infallible. With less credence given to consumer feedback, there is a risk the new product fails when released to the market. Ultimately, trends do sell, and some businesses make money by simply giving consumers what they asked for.
Product orientation vs. market orientation
Whereas in a product-oriented approach, the company focuses on growing its customer base with a set of new products.
In a market-oriented approach, the company focuses on understanding what product might help develop a whole new market.
The difference might seem subtle, yet in a product-oriented company, growth happens bottom-up by shaping customers’ behavior as they use a product.
In a market-oriented approach, a company also tries to shape demand by changing consumer behaviors.
Both approaches, depending on the market’s landscape can be effective.
And indeed, using a hybrid formula with a product-oriented approach, where you build the “bottom-up engine” and then infuse it with demand generation can be a powerful formula for scaling a company.
Product orientation examples
Let’s now discuss some additional product orientation examples
Airbus
The products Airbus sells need to meet consumer needs like any other company.
Unlike most other companies, however, Airbus operates in the dynamic aviation industry where research, development, and innovation are key to remaining competitive.
Airbus commercial aircraft are made from premium materials and components to increase the two important metrics of performance and safety.
This culture of innovation positions the company as one that is concerned about passengers and indeed the Earth on which we live.
Happily, these are also desired by the company’s commercial clients who desire faster, more efficient ways of transporting customers around the world.
It has also developed the Trent XWB turbofan which is lighter and more economical than its predecessors.
The success of products in the Defence and Space portfolio (such as satellites and on-ground infrastructure) also rely on Airbus’s product-centric approach underpinned by premium materials and high precision and functionality.
Dyson
Home appliance multinational company Dyson was established in 1991.
However, the impetus for the company came in 1974 after eventual founder James Dyson experienced a loss of suction from his Hoover vacuum cleaner.
Frustrated at the performance decrease, Dyson took the machine apart and noticed that a layer of dust inside the vacuum bag was impeding suction across the fine mesh.
While working in an unrelated role, Dyson then observed centrifugal separators that were used to collect dirt and dust in industrial contexts such as sawmills.
Despite claims from some that the separators would not be cost-effective if applied on a smaller scale, Dyson nevertheless constructed a prototype, connected it to his Hoover, and found that it worked satisfactorily.
Over the next five years, he refined his prototype but struggled to find a licensee in the United States.
Indeed, most considered his product a threat to the profitable vacuum bag market which was then worth around $500 million.
Dyson would eventually find a licensee in Japan by the name of Apex Ltd. in March 1985.
Using income from the deal, he founded Dyson Appliances Limited in 1991 with the first vacuum cleaner sold in the UK in January 1993.
Dyson’s product-oriented approach continues to this day and has been applied to develop other household items such as bladeless fans, heaters, air purifiers, and lights.
Over recent years, however, the company has also incorporated aspects of market orientation to better serve and satisfy its customers.
Gillette
Gillette has been around for more than 100 years, and one of the keys to its success is its product-orientated approach.
The company is best known for inventing the first safety razor with disposable blades in around 1895, a product so visionary and innovative that it did not encounter serious competition until 1962 when Wilkinson Sword released a similar blade.
When Wilkinson Sword later merged with Schick, it became Gillette’s primary competitor and caused a substantial decrease in market share.
Under successive CEOs in Vincent Ziegler and Colman Mockler, Gillette doubled down on product orientation.
In more recent times, the company has managed to maintain its dominant position with a strategy based on model improvements released every decade or so.
The popular Mach3 was launched in 1998 touting three blades set on tiny springs that provided a closer shave and less skin irritation.
Decades later and locked in bitter competition with Schick, the company reasserted itself once more with the release of the Fusion that featured a fifth blade on the back of the cartridge for mustaches and sideburns.
With a considerable brand following and pedigree in personal care products, Gillette can be reasonably confident that when it leads with new products, its customers will follow.
Product orientation vs. market orientation
Whereas product orientation is a marketing philosophy skewed toward developing high-quality products, to generate sales.
In a market orientation approach, the company focuses on customers, thus understanding them, to generate demand and distribution.
Thus, product orientation believes in creating distribution by focusing on product development.
Market orientation believes in enabling distribution or demand to find its market.
Both focus on the product and understanding the market makes it possible for companies to build competitive moats.
Key takeaways
Product orientation is a marketing management philosophy where the promotion of high-quality products is used to generate sales. Product orientation is designed-focused and commonly associated with tech companies that innovate with new technologies to address customer needs and generate market demand.
Product orientation is otherwise known as the “no fear strategy” because there is an implication that the business is bold, proactive, and comfortable with risk. Some of the businesses embodying these traits include Netflix, Apple, and Robinhood.
Product orientation results in higher product quality and continuous innovation, which can build a loyal and devoted brand following. However, innovation can be leveraged by competitors and there is also a risk that the innovative product is not what consumers wanted.
Product development, known as the new product development process comprises a set of steps that go from idea generation to post-launch review, which help companies analyze the various aspects of launching new products and bringing them to market. It comprises idea generation, screening, testing; business case analysis, product development, test marketing, commercialization, and post-launch review.
In the 1970s, Bruce D. Henderson, founder of the Boston Consulting Group, came up with The Product Portfolio (aka BCG Matrix, or Growth-share Matrix), which would look at a successful business product portfolio based on potential growth and market shares. It divided products into four main categories: cash cows, pets (dogs), question marks, and stars.
You can use the Ansoff Matrix as a strategic framework to understand what growthstrategy is more suited based on the market context. Developed by mathematician and business manager Igor Ansoff, it assumes a growthstrategy can be derived by whether the market is new or existing, and the product is new or existing.
The term “user experience” was coined by researcher Dr. Donald Norman who said that “no product is an island. A product is more than the product. It is a cohesive, integrated set of experiences. Think through all of the stages of a product or service – from initial intentions through final reflections, from first usage to help, service, and maintenance. Make them all work together seamlessly.” User experience design is a process that design teams use to create products that are useful and relevant to consumers.
A cost-benefit analysis is a process a business can use to analyze decisions according to the costs associated with making that decision. For a cost analysis to be effective it’s important to articulate the project in the simplest terms possible, identify the costs, determine the benefits of project implementation, assess the alternatives.
Empathy mapping is a visual representation of knowledge regarding user behavior and attitudes. An empathy map can be built by defining the scope, purpose to gain user insights, and for each action, add a sticky note, summarize the findings. Expand the plan and revise.
Perceptual mapping is the visual representation of consumer perceptions of brands, products, services, and organizations as a whole. Indeed, perceptual mapping asks consumers to place competing products relative to one another on a graph to assess how they perform with respect to each other in terms of perception.
Value stream mapping uses flowcharts to analyze and then improve on the delivery of products and services. Value stream mapping (VSM) is based on the concept of value streams – which are a series of sequential steps that explain how a product or service is delivered to consumers.
Gennaro is the creator of FourWeekMBA, which reached about three million business students, executives, and aspiring entrepreneurs in 2021 alone | He is also Head of Enterprise Sales for a high-tech startup, which he helped grow at a double-digit rate since the onset | In 2012 Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
