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.
Product orientation remains a successful strategy today – particularly in product areas where quality and innovation are of the utmost importance.
Since consumers are not aware they need a product or indeed that such a product can even exist, extensive research is required to ensure that an invented concept can translate to a product that sells.
Many of the products consumers take for granted in the modern era were developed in this way. Think televisions, cars, MP3 devices, computers, smartphones, and even the internet itself.
History of product orientation
Product orientation began to emerge in the late 19th and early 20th centuries in response to increased competition among businesses and strong consumer demand.
Before this period, businesses catered to demand with mass-produced, low-cost items that did not cater to customer needs and wants. Products were also of a dubious quality.
When consumers became more discerning, businesses faced declining sales and were forced to become more customer-focused.
Price as a market differentiator thus became replaced by an inward focus on product quality.
General Motors (GM) was one of the first companies to adopt a product-focused, customer-centric approach.
It introduced new features such as power steering and air conditioning in its vehicles and released a range of models to suit different tastes.
In 1927, GM also became the first automotive manufacturer to standardize the design process in product development.
The product orientation approach gained momentum in the 1950s and 1960s as mass production matured to a point where innovative products could be made at scale.
During this period, companies started to focus on developing products that were not only high quality but also technologically advanced.
They also realized the importance of investment in research and development to stay ahead of their competitors.
This period also marked the point at which the post-war production boom caused supply to outpace demand.
Consumers had become tired of the hard sell tactics prevalent before the war where they were marketed products they didn’t necessarily want or need.
In response, product orientation took somewhat of a backseat after companies became more aware of identifying customer needs before the product was developed.
However, several successful product-oriented companies did operate in this period. In 1964, for example, IBM introduced the revolutionary mainframe computer known as the System/360 which, in the company’s words, was “revolutionary in concept and unprecedented in scope.”
As technology became more advanced in subsequent decades, product orientation became an increasingly important driver of business success.
Examples of product-oriented companies
Some examples of mostly product-oriented companies include:
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.
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.
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 of the product orientation approach
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.
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.
When a company focuses on a limited range of high-quality products, it can sometimes streamline its production processes, reduce waste, and increase efficiency.
This can lead to lower costs, higher profitability, and faster turnaround times for orders.
Disadvantages of the product orientation approach
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.
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.
The product orientation approach can also be costly since high-quality products tend to be more expensive to produce.
These costs are passed to customers, which can make the company’s products less competitive.
Product orientation may also require a significant investment in research and development that may be problematic for smaller companies with limited funds.
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
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.
One of the many product innovations developed by Airbus is a sustainable aviation fuel that can reduce CO2 emissions by as much as 85%.
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.
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 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.
The company’s Atra razor released in 1977 featured a refillable cartridge and lubricating strip, with this model and the later Daisy razor for women increasing the company’s global market share to around 75%.
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.
In fact, the product was so popular that the company sold $1 billion worth in the first 18 months.
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.
A proper business strategy needs to leverage both to create an effective marketing strategy.
Both focus on the product and understanding the market makes it possible for companies to build competitive moats.
- 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
Visual Marketing Glossary