hello everyone welcome to business school 101 for years Tesla's CEO Elon Musk claimed that he despises marketing instead Tesla uses money that other automakers spend on marketing or advertising to improve their products in contrast as one of the world's most valuable sports equipment Brands Nike spends a huge amount of money on marketing and advertising each year both Tesla and Nike are indisputable leaders in their representative Industries but they represent two different business approaches product orientation and Market orientation to sell their products and develop their organizations in this video I will introduce both market and product
orientations with their advantages disadvantages and real-world examples I will also discuss the major differences between them and factors companies need to be concerned about regarding which strategy they should focus on section one what is product orientation product orientation is a business approach where companies focus on their products organizations with a product-oriented approach strive to create products or Services of the highest quality possible here are three product oriented companies number one apple apple is 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 number two Tesla Tesla Incorporated is an automotive and Energy company it designs develops manufactures sells and leases electric vehicles energy generation and storage systems the products of Tesla include many Cutting Edge electronic cars such as the model X model S and cyber truck Vehicles number three Netflix Netflix Incorporated provides internet entertainment services for watching movies and television shows the company offers TV shows and movies such as original series documentaries and feature films through an internet subscription on TV computer and mobile devices section 2 pros and cons
the product orientation approach has the following advantages Advantage number one Higher product Quality Companies that apply the product orientation approach devote less time and energy to marketing and sales and more to product development Advantage number two continuous innovation continuous innovation enables a business to become the first mover in a new industry and importantly maintain that Advantage however the product orientation approach also suffers from some disadvantages disadvantage number one 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 disadvantage number two product failure the product orientation approach can be successful but it is by no means infallible with less Credence given to Consumer feed back there is a risk the new product fails when released to the market Section 3 what is market orientation Market orientation is an approach to business that prioritizes identifying the needs and desires of consumers and creating products and services that satisfy them companies that have a market orientation consider the opinions and needs of their target
market as a critical component of their research and development for new products here are two examples of Market orientated companies number one Nike as one of the most famous shoe brands in the world Nike has also followed the marketing orientation approach and identified its Niche that focuses on customer satisfaction and fulfilling their demands in the most diligent and well-mannered way number two Coca-Cola Coca-Cola is another company that is famous for its Market orientation it conducts considerable research to identify new flavors that consumers will actually like it also acquired Brands including Dasani Honest Tea Minute Maid
and vitamin water to attract health conscious consumers section 4 pros and cons the market orientation approach has the following advantages Advantage number one customer satisfaction the availability of products allows people to have more choices to satisfy their needs and wants it should lead to a better quality of life Advantage number two Customer Loyalty by satisfying customers companies can create loyalty it is critical to secure sales and profits in the long run again to generate greater loyalty they must do better than competitors Advantage number three more ideas market research allows companies to gather feedback from consumers
it is useful for improving the quality of an existing product or in developing the next new product however the market orientation also has some disadvantages disadvantage number one more complex companies applying the market orientation must consider broader aspects to generate profits from Market needs and business operations to competitive Maps they must make sure the product satisfies the customer in a profitable way disadvantage number two must be flexible companies applying the market orientation must be able to adapt to changing customer tastes in the Dynamics of competition failing to do so they could lose sales and cannot
secure profits in the long run Section 5 differences between product and Market orientation here are two major differences between product orientation versus Market orientation number one resources allocation companies that focus on product orientation often use different tools and resources than those organizations that prioritize Market orientation a business that's product oriented primarily invests in product research and development such as by testing new product materials conducting focus groups and analyzing customer feedback on specific products or Services market-oriented organizations typically spend more on market research and testing number two departments different approaches may affect different operations or departments
within an organization product oriented strategies tend to most impact research and development production and quality control teams in contrast a market-oriented business may find that this approach affects more on their marketing research advertising and sales team section 6 factors need to concern here are three factors to consider when deciding whether to focus on strategies related to Market or product orientation number one organizational goals think about your current departmental or organizational goals and how a product or market-oriented tactic could help them companies looking to reduce operational costs or increase the performance of their products or Services
May benefit from incorporating product orientation techniques into their business an organization primarily interested in raising customer satisfaction might prefer to devote more money and energy to Market orientation number two strengths consider your organizational strength along with areas you might improve product orientation and Market orientation strategies can help businesses develop different aspects of their operations for example a company that wants to enhance its research and development team might focus on product orientation while a business interested in strengthening its marketing initiatives may prefer a market-oriented strategy number three resources evaluate your currently available resources and the cost
or time investment of obtaining additional resources both product and Market orientation use different resources so it's important to have an accurate understanding of what you already have or might need to acquire before deciding on which approach to focus for example businesses with more manufacturing resources may want to prioritize product orientation while companies with better access to customer research might focus on Market orientation all right that's all for today's topic if you have any questions regarding this video please leave your thoughts in a comment below I hope that you guys have enjoyed this video and if
you did make sure you give it a thumbs up and subscribe to my channel thanks for watching and I will see you next time
