Why Is Positioning Necessary When A Company Is Marketing A New Product Or Service?
Production orientation is a business strategy that focuses on developing and designing loftier-quality products that generate need. In other words, a production-oriented business has an "if you build information technology well, sales will come" blazon of mentality.
On the reverse side of the coin is a strategy called market orientation. The biggest difference is that production-oriented companies build products that they believe are strong plenty to inspire public interest, while market-oriented companies build products designed to cater to public interests that already be. Learn more virtually product orientation by reviewing definitions and examples of companies that use this strategy.
Product-Oriented Activities
Up until the mid-20th century, product orientation was fairly standard simply because consumers didn't take too many choices when it came to certain products. One famous example of this sentiment comes from an early 1900s Henry Ford announcement: "Any customer can have a car painted any color that he wants then long every bit it is blackness."
Every bit the marketplace continued to evolve, however, business strategies were forced to grow forth with consumer demands. Equally lack of contest has become rarer in most industries, many successful businesses now apply a combination of market- and product-oriented approaches. While information technology's yet common for some companies to lean more than heavily towards one side or the other, few tend to use either exclusively.
Regardless, production orientation still plays an important office in virtually companies' market strategies. During the product orientation stage of developing goods, at that place'due south a large focus on production inquiry, product development and product focus.
Product Enquiry
If you're looking to open a concern or launch a new product, product research plays an important role and gauges your odds of success. Product research can include a variety of activities, such as evaluating and testing product concepts, evaluating how much competition y'all'll take, figuring out potential costs to brand the product and pricing the product in a fashion that you'll be able to generate a profit.
Product Development
If a business organisation is heavily focused on product orientation, then this is a big part of the procedure. Though many different activities are involved in this stage, the focus is on making the strongest possible process to ensure demand. Evolution typically involves creating and designing a new product or figuring out updates to an existing one. Information technology can also include building and testing said product and subsequently producing, marketing and distributing it, besides.
Product Focus
Product focus involves mapping out things like selling strategy, manufacturing and metrics. By focusing on the product, companies aim to continually improve their offerings to stay competitive in their industry.
Product Orientation Examples
While we mentioned that many companies use a mixture of market orientation and product orientation, at that place are some that lean more towards the product orientation angle. These companies tend to exist innovators that make it on the scene with hot new products that consumers had no thought they wanted. Some examples include:
Apple
Earlier Steve Jobs and the Apple team shot to the level of tech stardom the company possesses today, no one had really envisioned the iPod, iPhone, iPad — iAnything. Yet by developing these and other revolutionary new products, Jobs and his squad were able to cash in by offer products that they correctly predicted would create a great bargain of demand.
Netflix
Netflix's product is technically more of a service, but by providing customers with easy access to the latest movies and Telly shows, Netflix made big video rental stores like Blockbuster obsolete. Once again, the visitor'south success was based on identifying a convenient option that the public hadn't yet realized was even possible.
Robinhood
Robinhood is an investing app that transformed the world of market place trading. Less than a decade agone, the stock market was still largely inaccessible to everyday participants, as investing came with a high cost of brokerage commissions. Then, Robinhood developed a trading platform that private investors could use to get in on the activity, commission-costless.
The service proved to be so popular that ultimately other brokerages like TD Ameritrade and Etrade were as well forced to become commission-free in order to keep up. Robinhood's product orientation-mode approach was the event of identifying a problem in a specific industry and and then fixing information technology in a manner that no other company had either considered or tried to try.
Advantages and Disadvantages of Product Orientation
Companies that lean towards product orientation tend to operate with a different set of rules than those that revolve around market orientation. Marketing and product orientation-heavy business concern models come up with their own sets of pros and cons.
Innovation
As mentioned, product-oriented companies often provide innovative new products or services that fill an existing need in the marketplace. At least in their initial phases, their ability to exist the first to offer a product or service oft means beingness the simply business that does. This was the case for Netflix in the early on 2000s when it added a digital streaming option to its existing mail-delivery DVD-rental service.
The downside of innovation is that, when something works, more businesses jump to offer information technology. By 2008, Netflix's streaming service already had competition from Hulu. Today, these companies compete with a diverseness of other streaming options ranging from Amazon Prime number to services from individual networks and studios similar Disney+ and Peacock — the point being that innovation can only take you lot so far.
Consumer Feedback
Production-oriented companies don't take to be as concerned every bit market-oriented companies exercise with the thought that "the customer is e'er right." This gives them the liberty to take public feedback with a grain of table salt and releases them from the pressure to keep up with constantly evolving trends.
The downside, however, is that trends do sell. Market-oriented businesses are frequently able to make a great deal of coin simply by giving customers what they want. Rather than having to guess whether a new product or service volition fill a hole in the market, they heed to public feedback and deliver products that are already in demand to encounter that need.
Quality
Quality tends to be a primary consideration for production-oriented businesses. Because they count on a production to sell itself to some extent, these companies are well aware that it needs to exist a adept one. While this approach comes with the benefit of saving money on advertising, it doesn't ever accept other factors into account.
While Apple will e'er accept a large customer base of operations due to its premium-quality iPhones, not all consumers are swell on the devices' notoriously loftier price tags and frequent upgrades. This has created ample room for competitors like Samsung to offer comparable smartphones at lower prices and with features iPhones lack.
Why Is Positioning Necessary When A Company Is Marketing A New Product Or Service?,
Source: https://www.reference.com/business-finance/examples-production-orientated-companies-ede1b5685d301f30?utm_content=params%3Ao%3D740005%26ad%3DdirN%26qo%3DserpIndex
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