Product orientation, Sales orientation, Marketing orientation. Development and movement over time. Explain how they focus on customers.
In the marketing history there are three types of orientation which are production, sales and marketing orientation. These are depending on the product life cycle, the level of competition within the market and external factors such as the economic.
Companies are likely to modify their market orientation over the life cycle of a particular product, and it is common for a single company to have different products with different orientations. There is no one orientation that is appropriate for all products, and the changing environment and global market in which today’s companies operate mean that orientations are likely to undergo by customers’ needs and wants. Even though the importance that market orientation acting in a company’s success, many companies are unaware by managing the orientation and the associated activities, they can improve their performance.
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Production orientation was the major marketing approach by the late 1950s, until the late 20th century many firms were product-orientated. This approach is where the main focus is the product and not the market. A product is made for its own needs and not that of the markets. A good example could be Ford Motor Company. The company method was to focus on production. Manufactured products like the unprecedentedly cheap Model T car had great demand and producers could sell all they could produce. Customers had the choice of “any colour” as long as it is black, take it or leave it. Therefore a product depended on producing as much as possible and failed to understand the changing needs of their customers.
At Business dictionary (2010) website defines sales orientation as a business approach or philosophy that concentrations on pushing sales of whatever the firms’ makes or supplies, through promotions and sales calls. Around 1950s, some businesses were realising the way to sell their products and the consumption power. The focus here is to make the product, and then try to sell it to the target market. Though, the problem could be that consumers do not like what is being sold to them. Many of the businesses was focused this marketing approach till the early 1970s, Economy watch (2010).
Nowadays, a firm has known the finger of its target audience, unless they will hardly to be succeeded. Most organisations in the world invest a lot of time, effort and funds to manage the process of understanding their customers’ needs and wants while pursuing the objective of success. This approach is called marketing orientation. Cramman (2010)
A marketing oriented is the one that allows customers’ needs and wants. Talloo (2007, p 145-146) states that the idea of marketing orientation was developed at Harvard University around 1965. He also mentions that the marketing orientation can be focus on consumers by three basic steps. In order to introduce a product or service in a market, firstly, an organisation needs to research its customers’ need and want. By doing this, they require using some techniques like surveys and questionnaires. Those are examples of quantitative marketing research. Another useful method is beta testing. For instance, a food production company want introduce a new product in to market. Before manufacture this, it is a good idea to invite a group of people to taste the product. Then analysis the information and products are developed. Finally, study customers’ satisfaction and improvement is made if required.
The researched (Talloo, 2007) demonstrated that a marketing oriented firm normally has particular characteristics. They widely use several marketing research techniques, as some examples are discussed above. Moreover, they believe that benefit of consumer’s product is more important than to product features. So, they always try to innovate their product. By offering additional services, including, finance availability, door to door delivery and installation as well as guarantee for their product to fulfil customers’ satisfaction. Not only doing these but also observe customs’ satisfaction and complaints by suggestion box or letter and online or telephone information hotlines to improve a company profitability. While most organisations are using marketing orientation in decades, many organisations are still experienced with product orientated style. This means they develop a product and then look for a market to sell to.
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By studying the case of Kellogg’s, it is market orientated firm. The company focuses on of its consumers. Therefore they are demanding to classify consumer needs before they introduce a new product. The Company is the world’s leading producer of cereals. Its products are manufactured in 17 countries and market in more than 180 countries. Over 100 years, Kellogg’s has been a leader in diet and nutrition over providing consumers with a different range of cereal products. These are designed to be part of a balanced diet and meet the different tastes of consumers, Kellogg’s (2010). As they always looking for ways to meet consumer needs, Kellogg’s able to be expanded its product portfolio and maintained at a certain level of growth.
Market research adds value to businesses like Kellogg’s by identifying consumers’ needs. It helps Kellogg’s to plan ahead, for example, looking at what products or extensions it should develop and for whom. It focuses the business on the needs of its consumers. An organisation that does this can improve its competitive advantage.
In an established market, such as breakfast cereals, there is little room to increase the overall sales in the market. Kellogg’s is therefore always looking for ways to strengthen its own portfolio. Designing new products is a good way of doing this. However, this can take a long time and may involve considerable costs. In addition to the resources required during development, suppliers must produce an advertising campaign to raise awareness of the product among consumers and encourage retailers to stock the product. Launching a new product can be a risky business.
Of the hundreds of products launched every year in consumer goods markets, very few reach significant market share. In order to reduce risks, market research is, therefore, essential. A product extension is a less risky way of increasing market share by providing consumer products with new features under an existing brand. New product extensions give more choice to consumers and help them to feel more favourably about the existing brands.
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