product-orientation

What Is Product Orientation? Product Orientation In A Nutshell

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. 

Understanding product orientation

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:

  1. 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.
  2. 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.
  3. 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. 

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. 

Connected Product Development Frameworks

product-development
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 analysisproduct development, test marketing, commercialization, and post-launch review.
bcg-matrix
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.
ansoff-matrix
You can use the Ansoff Matrix as a strategic framework to understand what growth strategy is more suited based on the market context. Developed by mathematician and business manager Igor Ansoff, it assumes a growth strategy can be derived by whether the market is new or existing, and the product is new or existing.
user-experience-design
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.
cost-benefit-analysis
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
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.

Read the remaining product development frameworks here.

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Published by

Gennaro Cuofano

Gennaro is the creator of FourWeekMBA which reached over a million business students, executives, and aspiring entrepreneurs in 2020 alone | He is also Head of Business Development for a high-tech startup, which he helped grow at double-digit rate | Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy | Visit The FourWeekMBA BizSchool | Or Get The FourWeekMBA Flagship Book "100+ Business Models"