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Product orientation vs. customer (market) orientation

Business Studies Notes and

Related Essays


 A Level/AS Level/O Level

Your Burning Questions Answered!

Explain the key differences between a product orientation and a customer (market) orientation in business strategy.

Discuss the advantages and disadvantages of adopting a product orientation versus a customer orientation.

Analyze the impact of external factors, such as market competition and technological advancements, on the choice between a product and customer orientation.

Evaluate the role of market research and customer feedback in shaping a business's orientation.

Discuss ethical considerations related to the adoption of a product orientation or a customer orientation.

Markets: Where Goods and Services Meet Needs

Imagine you're hungry. You need a pizza. Where do you go? You probably think of your favourite pizza place, or maybe you ask friends for recommendations. That's a market at work!

1. What is a Market?

A market is simply a place where buyers and sellers meet to exchange goods or services. It's where needs and demands connect with products and solutions. Think of:

  • Farmers' markets: Farmers sell fresh produce directly to consumers.
  • Online marketplaces like Amazon: You buy everything from clothes to electronics.
  • The Stock Market: Investors buy and sell shares of companies.

2. Types of Markets:

Markets can be classified in many ways:

  • By product: Think of the "smartphone market" or the "luxury car market".
  • By geographic location: The "local market" (your neighbourhood) or the "global market" (the whole world).
  • By size: A "mass market" (targeting everyone) or a "niche market" (targeting a specific group).

3. Market Research: Understanding Your Audience

Before jumping into a market, businesses need to understand who their customers are and what they want. This is market research, and it involves:

  • Identifying customer needs: What are people looking for?
  • Analyzing competitors: What are other businesses offering?
  • Finding market trends: What are the changing tastes and preferences?

Think of the rise of plant-based food products. Companies like Beyond Meat and Impossible Foods did a lot of research to see how many people were interested in vegan and vegetarian options.

Product vs. Customer Orientation: Who's in Charge?

Imagine two different pizza places:

  • Pizza Palace: They focus on making the best pizza, using the finest ingredients and the most innovative recipes.
  • Pizza Planet: They focus on what customers want, offering a variety of toppings, delivery options, and even fun games for kids.

This illustrates the difference between product orientation and customer (market) orientation.

1. Product Orientation: The Product Comes First

  • Focus: Creating a high-quality product, often with a focus on technical features and performance.
  • Example: A luxury watch brand might prioritize its craftsmanship and materials over what customers are actually looking for.
  • Risk: Businesses can lose sight of customer needs and end up with a great product with no market.

2. Customer (Market) Orientation: The Customer is King

  • Focus: Understanding, meeting, and exceeding customer expectations.
  • Example: A budget airline focuses on low fares, frequent flights, and convenience to appeal to price-sensitive travelers.
  • Risk: Businesses can sometimes sacrifice quality or innovation to cater to the lowest common denominator.

3. The Winning Approach: Hybrid Orientation

The best companies find a balance between product and customer orientation. They strive to make high-quality products that customers truly want and need.

Think Apple: Apple is known for its beautiful design and innovative technology, but it also listens carefully to its customers, offering a range of products and services that meet different needs.

By understanding the differences between these approaches, businesses can make smarter decisions about how to develop, market, and sell their products or services in a way that resonates with their target audience.

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