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.
Innovation
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:
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.
Increased efficiency
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
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.
Cost
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
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.
Account-based marketing (ABM) is a strategy where the marketing and sales departments come together to create personalized buying experiences for high-value accounts. Account-based marketing is a business-to-business (B2B) approach in which marketing and sales teams work together to target high-value accounts and turn them into customers.
Ad Ops – also known as Digital Ad Operations – refers to systems and processes that support digital advertisements’ delivery and management. The concept describes any process that helps a marketing team manage, run, or optimize ad campaigns, making them an integrating part of the business operations.
Venture capitalist, Dave McClure, coined the acronym AARRR which is a simplified model that enables to understand what metrics and channels to look at, at each stage for the users’ path toward becoming customers and referrers of a brand.
Affinity marketing involves a partnership between two or more businesses to sell more products. Note that this is a mutually beneficial arrangement where one brand can extend its reach and enhance its credibility in association with the other.
As the name suggests, ambush marketing raises awareness for brands at events in a covert and unexpected fashion. Ambush marketing takes many forms, one common element, the brand advertising their products or services has not paid for the right to do so. Thus, the business doing the ambushing attempts to capitalize on the efforts made by the business sponsoring the event.
Affiliate marketing describes the process whereby an affiliate earns a commission for selling the products of another person or company. Here, the affiliate is simply an individual who is motivated to promote a particular product through incentivization. The business whose product is being promoted will gain in terms of sales and marketing from affiliates.
The bullseye framework is a simple method that enables you to prioritize the marketing channels that will make your company gain traction. The main logic of the bullseye framework is to find the marketing channels that work and prioritize them.
Brand building is the set of activities that help companies to build an identity that can be recognized by its audience. Thus, it works as a mechanism of identification through core values that signal trust and that help build long-term relationships between the brand and its key stakeholders.
According to inbound marketing platform HubSpot, brand dilution occurs “when a company’s brand equity diminishes due to an unsuccessful brand extension, which is a new product the company develops in an industry that they don’t have any market share in.” Brand dilution, therefore, occurs when a brand decreases in value after the company releases a product that does not align with its vision, mission, or skillset.
The brand essence wheel is a templated approach businesses can use to better understand their brand. The brand essence wheel has obvious implications for external brand strategy. However, it is equally important in simplifying brand strategy for employees without a strong marketing background. Although many variations of the brand essence wheel exist, a comprehensive wheel incorporates information from five categories: attributes, benefits, values, personality, brand essence.
The brand equity is the premium that a customer is willing to pay for a product that has all the objective characteristics of existing alternatives, thus, making it different in terms of perception. The premium on seemingly equal products and quality is attributable to its brand equity.
Brand positioning is about creating a mental real estate in the mind of the target market. If successful, brand positioning allows a business to gain a competitive advantage. And it also works as a switching cost in favor of the brand. Consumers recognizing a brand might be less prone to switch to another brand.
Business storytelling is a critical part of developing a business model. Indeed, the way you frame the story of your organization will influence its brand in the long-term. That’s because your brand story is tied to your brand identity, and it enables people to identify with a company.
Content marketing is one of the most powerful commercial activities which focuses on leveraging content production (text, audio, video, or other formats) to attract a targeted audience. Content marketing focuses on building a strong brand, but also to convert part of that targeted audience into potential customers.
One of the first mentions of customer lifetime value was in the 1988 book Database Marketing: Strategy and Implementation written by Robert Shaw and Merlin Stone. Customer lifetime value (CLV) represents the value of a customer to a company over a period of time. It represents a critical business metric, especially for SaaS or recurring revenue-based businesses.
Customer segmentation is a marketing method that divides the customers in sub-groups, that share similar characteristics. Thus, product, marketing and engineering teams can center the strategy from go-to-market to product development and communication around each sub-group. Customer segments can be broken down is several ways, such as demographics, geography, psychographics and more.
Developer marketing encompasses tactics designed to grow awareness and adopt software tools, solutions, and SaaS platforms. Developer marketing has become the standard among software companies with a platform component, where developers can build applications on top of the core software or open software. Therefore, engaging developer communities has become a key element of marketing for many digital businesses.
A digital channel is a marketing channel, part of a distribution strategy, helping an organization to reach its potential customers via electronic means. There are several digital marketing channels, usually divided into organic and paid channels. Some organic channels are SEO, SMO, email marketing. And some paid channels comprise SEM, SMM, and display advertising.
Field marketing is a general term that encompasses face-to-face marketing activities carried out in the field. These activities may include street promotions, conferences, sales, and various forms of experiential marketing. Field marketing, therefore, refers to any marketing activity that is performed in the field.
interaction with a brand until they become a paid customer and beyond.
Funnel marketing is modeled after the marketing funnel, a concept that tells the company how it should market to consumers based on their position in the funnel itself. The notion of a customer embarking on a journey when interacting with a brand was first proposed by Elias St. Elmo Lewis in 1898.
Funnel marketing typically considers three stages of a non-linear marketing funnel. These are top of the funnel (TOFU), middle of the funnel (MOFU), and bottom of the funnel (BOFU). Particular marketing strategies at each stage are adapted to the level of familiarity the consumer has with a brand.
A go-to-market strategy represents how companies market their new products to reach target customers in a scalable and repeatable way. It starts with how new products/services get developed to how these organizations target potential customers (via sales and marketing models) to enable their value proposition to be delivered to create a competitive advantage.
The term “greenwashing” was first coined by environmentalist Jay Westerveld in 1986 at a time when most consumers received their news from television, radio, and print media. Some companies took advantage of limited public access to information by portraying themselves as environmental stewards – even when their actions proved otherwise. Greenwashing is a deceptive marketing practice where a company makes unsubstantiated claims about an environmentally-friendly product or service.
Grassroots marketing involves a brand creating highly targeted content for a particular niche or audience. When an organization engages in grassroots marketing, it focuses on a small group of people with the hope that its marketing message is shared with a progressively larger audience.
Growth marketing is a process of rapid experimentation, which in a way has to be “scientific” by keeping in mind that it is used by startups to grow, quickly. Thus, the “scientific” here is not meant in the academic sense. Growth marketing is expected to unlock growth, quickly and with an often limited budget.
Guerrilla marketing is an advertising strategy that seeks to utilize low-cost and sometimes unconventional tactics that are high impact. First coined by Jay Conrad Levinson in his 1984 book of the same title, guerrilla marketing works best on existing customers who are familiar with a brand or product and its particular characteristics.
Hunger marketing is a marketing strategy focused on manipulating consumer emotions. By bringing products to market with an attractive price point and restricted supply, consumers have a stronger desire to make a purchase.
Integrated marketing communication (IMC) is an approach used by businesses to coordinate and brand their communication strategies. Integrated marketing communication takes separate marketing functions and combines them into one, interconnected approach with a core brand message that is consistent across various channels. These encompass owned, earned, and paid media. Integrated marketing communication has been used to great effect by companies such as Snapchat, Snickers, and Domino’s.
Inbound marketing is a marketing strategy designed to attract customers to a brand with content and experiences that they derive value from. Inbound marketing utilizes blogs, events, SEO, and social media to create brand awareness and attract targeted consumers. By attracting or “drawing in” a targeted audience, inbound marketing differs from outbound marketing which actively pushes a brand onto consumers who may have no interest in what is being offered.
Integrated marketing describes the process of delivering consistent and relevant content to a target audience across all marketing channels. It is a cohesive, unified, and immersive marketing strategy that is cost-effective and relies on brand identity and storytelling to amplify the brand to a wider and wider audience.
The marketing mix is a term to describe the multi-faceted approach to a complete and effective marketing plan. Traditionally, this plan included the four Ps of marketing: price, product, promotion, and place. But the exact makeup of a marketing mix has undergone various changes in response to new technologies and ways of thinking. Additions to the four Ps include physical evidence, people, process, and even politics.
Marketing myopia is the nearsighted focus on selling goods and services at the expense of consumer needs. Marketing myopia was coined by Harvard Business School professor Theodore Levitt in 1960. Originally, Levitt described the concept in the context of organizations in high-growth industries that become complacent in their belief that such industries never fail.
Marketing personas give businesses a general overview of key segments of their target audience and how these segments interact with their brand. Marketing personas are based on the data of an ideal, fictional customer whose characteristics, needs, and motivations are representative of a broader market segment.
Meme marketing is any marketing strategy that uses memes to promote a brand. The term “meme” itself was popularized by author Richard Dawkins over 50 years later in his 1976 book The Selfish Gene. In the book, Dawkins described how ideas evolved and were shared across different cultures. The internet has enabled this exchange to occur at an exponential rate, with the first modern memes emerging in the late 1990s and early 2000s.
Microtargeting is a marketing strategy that utilizes consumer demographic data to identify the interests of a very specific group of individuals. Like most marketing strategies, the goal of microtargeting is to positively influence consumer behavior.
Multichannel marketing executes a marketing strategy across multiple platforms to reach as many consumers as possible. Here, a platform may refer to product packaging, word-of-mouth advertising, mobile apps, email, websites, or promotional events, and all the other channels that can help amplify the brand to reach as many consumers as possible.
Multi-level marketing (MLM), otherwise known as network or referral marketing, is a strategy in which businesses sell their products through person-to-person sales. When consumers join MLM programs, they act as distributors. Distributors make money by selling the product directly to other consumers. They earn a small percentage of sales from those that they recruit to do the same – often referred to as their “downline”.
The Net Promoter Score (NPS) is a measure of the ability of a product or service to attract word-of-mouth advertising. NPS is a crucial part of any marketing strategy since attracting and then retaining customers means they are more likely to recommend a business to others.
Neuromarketing information is collected by measuring brain activity related to specific brain functions using sophisticated and expensive technology such as MRI machines. Some businesses also choose to make inferences of neurological responses by analyzing biometric and heart-rate data.
Neuromarketing is the domain of large companies with similarly large budgets or subsidies. These include Frito-Lay, Google, and The Weather Channel.
Newsjacking as a marketing strategy was popularised by David Meerman Scott in his book Newsjacking: How to Inject Your Ideas into a Breaking News Story and Generate Tons of Media Coverage. Newsjacking describes the practice of aligning a brand with a current event to generate media attention and increase brand exposure.
A microniche is a subset of potential customers within a niche. In the era of dominating digital super-platforms, identifying a microniche can kick off the strategy of digital businesses to prevent competition against large platforms. As the microniche becomes a niche, then a market, scale becomes an option.
We can define pull and push marketing from the perspective of the target audience or customers. In push marketing, as the name suggests, you’re promoting a product so that consumers can see it. In a pull strategy, consumers might look for your product or service drawn by its brand.
Real-time marketing is as exactly as it sounds. It involves in-the-moment marketing to customers across any channel based on how that customer is interacting with the brand.
Relationship marketing involves businesses and their brands forming long-term relationships with customers. The focus of relationship marketing is to increase customer loyalty and engagement through high-quality products and services. It differs from short-term processes focused solely on customer acquisition and individual sales.
Reverse marketing describes any marketing strategy that encourages consumers to seek out a product or company on their own. This approach differs from a traditional marketing strategy where marketers seek out the consumer.
Remarketing involves the creation of personalized and targeted ads for consumers who have already visited a company’s website. The process works in this way: as users visit a brand’s website, they are tagged with cookies that follow the users, and as they land on advertising platforms where retargeting is an option (like social media platforms) they get served ads based on their navigation.
Sensory marketing describes any marketing campaign designed to appeal to the five human senses of touch, taste, smell, sight, and sound. Technologies such as artificial intelligence, virtual reality, and the Internet of Things (IoT) are enabling marketers to design fun, interactive, and immersive sensory marketing brand experiences. Long term, businesses must develop sensory marketing campaigns that are relevant and effective in eCommerce.
Services marketing originated as a separate field of study during the 1980s. Researchers realized that the unique characteristics of services required different marketing strategies to those used in the promotion of physical goods. Services marketing is a specialized branch of marketing that promotes the intangible benefits delivered by a company to create customer value.
Sustainable marketing describes how a business will invest in social and environmental initiatives as part of its marketing strategy. Also known as green marketing, it is often used to counteract public criticism around wastage, misleading advertising, and poor quality or unsafe products.
Word-of-mouth marketing is a marketing strategy skewed toward offering a great experience to existing customers and incentivizing them to share it with other potential customers. That is one of the most effective forms of marketing as it enables a company to gain traction based on existing customers’ referrals. When repeat customers become a key enabler for the brand this is one of the best organic and sustainable growth marketing strategies.
360 marketing is a marketing campaign that utilizes all available mediums, channels, and consumer touchpoints. 360 marketing requires the business to maintain a consistent presence across multiple online and offline channels. This ensures it does not miss potentially lucrative customer segments. By its very nature, 360 marketing describes any number of different marketing strategies. However, a broad and holistic marketing strategy should incorporate a website, SEO, PPC, email marketing, social media, public relations, in-store relations, and traditional forms of advertising such as television.
Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
