A company that arranges its products, services and activities such that they are pertaining to the demand and needs of the consumers is called a market-oriented company. On the other hand, a product driven company is one that makes interesting and intriguing products. It is believed that for a company to be successful, it could follow either of the two approaches. However, product orientation approach is believed to be harder. It is brilliant to design innovative goods but until and unless there are customers to use them, the products remain valueless and incompetent. Because of this, businesses that seek to maximize their profits by assuring that they have an enthusiastic clientele. (THE TIMES 100, Market and product orientation, not dated)
Almost all the successful companies in today’s competitive business world follow a well-blended combination of the two. Coca-Cola, Travis Perkins, and Gillette are few examples of such companies. These companies conduct market research about consumers’ interests. This process involves testing different markets to find out about acceptability of certain goods and services. These demographic surveys help businesses in acquiring a target market. It enables businesses to calculate the portion of population that will be interested in buying the product, on the basis of their income levels, gender, location, age, and other such factors. Companies also get to learn about the likes and dislikes of their clients. Moreover, these surveys also help in learning about the past, present, and potential future consumers. (THE TIMES 100, Market and product orientation, not dated)
The results ascertained by the market research are then used to conduct product research, such that it is pursuant to the market research. For successful companies, to keep their profits and share of he market intact, it is important that they remain constantly involved in qualitative market research. This helps in evaluating customers’ views and opinions about the new products and ideas. It is also wise to test a new product in smaller markets before launching them in a large-scale market. (Wise GEEK, What is Market Research?, 2009)
Gillette is an example of one such company that has been introducing a variety of razors and improving the existing product range. It uses its own workforce for testing and trials of new products and gets feedback and different ideas from them. (THE TIMES 100, Market and product orientation, not dated)
Product-driven companies use quality controls to maintain and improve their standard and quality. These quality controls are meant to fulfill certain criterion, such as satisfaction from the product, dependability, and if the product is fiscally sound. Products are examined and are supposed to satisfy at least the set minimum criteria. If some problems are found, they are to be fixed. Just how quality controls are carried out for products, quality assurance is done for services or the processes. Quality assurances are to make sure that services provided are efficient in meeting their objectives. In other words, quality assurance focuses on the processes of production, implementation, manufacturing, or creation; whereas, quality controls are for the evaluation of final products. (Wise GEEK, What is Quality Control?, 2009)
Engineers and Marketers have been fighting the battle for sometime. Marketers insist that it is essential to take into consideration the external factors such as needs, competitors, and consumers. Whereas, Engineers believe that making the best product is enough to guarantee success. Engineers hold the view that a product should be so brilliant that it should not need marketing or sales to be successful, and its quality should speak for itself. (Web Strategy by Jeremiah, Is your company Market Driven or Product Driven?, 2008)
Google, the most popular online brand, is an example of one such company that relies on heavy engineering and did not do much marketing, and yet remains over the top amongst all online brands. On the contrary, there are examples of companies such as Coke, who too have gained the status of being a top brand, but it took them a significant portion of their corporate budget to get there with efficient marketing. (Web Strategy by Jeremiah, Is your company Market Driven or Product Driven?, 2008)
Take for instance Apple, a producer of best quality goods in the respective industry, doing well-designed and sophisticated marketing and forming a brand image. Its emotional branding inspires and compels people to adopt a ‘be different’ lifestyle. It would however be wrong to say that Apple’s success is solely due to its brilliant marketing strategies, but it is undoubtedly producing very solid and finest products indeed. (Web Strategy by Jeremiah, Is your company Market Driven or Product Driven?, 2008)
Myriads of companies all over the world are also using social computing to advertise their products with the help of blogs or SalesForce’s Ideas or Uservoice. They are also used to get customers views about features they want to see in the new products. It is very difficult to say that which of the two approaches is going to be more beneficial for the company, and it is evident that a balance of both in accordance with the nature of the product can yield best results. Marketers need engineers and vice versa for the success of any good or service in today’s competitive world. (Web Strategy by Jeremiah, Is your company Market Driven or Product Driven?, 2008)
Dell launched its website “Ideal Storm” which allowed consumers to vote for the products and features that people wanted available in the market. Starbucks also launched ‘My Starbucks Ideas’ where clients can suggest and vote for desired improvements in the products and services. Starbucks has worked on getting ‘punchcards’ or providing free wireless facility at their stores after considering the progress on the website. (Web Strategy by Jeremiah, Build you own “IdealStorm” with UserVoice, 2008)
An economy and its industries’ classification may be studied and done using either of the two approaches. For instance, the older Standard Industrial Classification follows product-driven approach, while the North American Industry Classification System (NAICS) applies market oriented approach. (Nigel Brooks, Products and – Or Services – Defining “Service-Oriented” Products and the Related Role of Technology, not dated)
Market driven approach covers goods and service producing industries in the economy. Examples of goods-producing industries are construction, mining and natural resources, and manufacturing. Transportation, financial activities, hospitality and leisure, education and health services, wholesale and retail trade (and warehousing), information, business and professional services, public administration, and utilities are some examples of service-producing industries in an economy. (Nigel Brooks, Products And – Or Services – Defining “Service-Oriented” Products and the Related Role of Technology, not dated)
On the other hand, production-driven approach includes service-driven and product-driven industries. Any business, whose primary activity is to hold inventories for the purpose of sale, whether transformed or not, falls under the category of product-driven industry. Food service industries, retail, and wholesale industries are product-driven. Such businesses are likely to have operations practices for the management of stocks and inventories, and comprehensive cost accounting. (Nigel Brooks, Products And – Or Services – Defining “Service-Oriented” Products and the Related Role of Technology, not dated)
References
THE TIMES 100, Market and product orientation, not dated. Web.
Wise GEEK, What is Market Research?, 2009.
Web Strategy by Jeremiah, Is your company Market Driven or Product Driven?, 2008.
Web Strategy by Jeremiah, Build you own “IdealStorm” with UserVoice, 2008.
Nigel Brooks, Products And – Or Services – Defining “Service-Oriented” Products and the Related Role of Technology, not dated. Web.
Wise GEEK, What is Quality Control?, (2009).