Disadvantages of Product Orientation

Until the late 20th century many firms were product-orientated and failed to understand the changing needs of their customers in an increasingly competitive marketplace. A major swing towards market-orientation has led to intensified marker research and product ranges carefully designed to fir customer preferences.

A product-oriented approach to business focuses on building a superior product or service, which will pull customers to you because you have what they need. This differs from a sales-oriented approach, which relies on branding and communications strategies to pull customers to you by making them believe you have something they want.

·        Obsolescence

If you focus your brand and selling message only on your product’s construction, features, cost, quality or other hard facts, a new competitor, change in technology or other market factor that devalues your current product’s selling point can put you out of business.

·        Narrow Branding

If you don’t develop a brand with a benefits message or clear image, you might be limited as to what you can sell. For example, if you sell shoes using a product-oriented approach that focuses on the construction, value, price and style of your footwear, you might have a difficult time introducing a line of handbags if that product is more of an impulse buy or one driven by taste. If your shoe business has a brand that sends a subjective message to women, you can use your position in the marketplace to introduce new products with that image.

  Low Return on Marketing
 

Companies with a product orientation spend their marketing budgets promoting products that may not meet customer needs. That means wasted expenditure on creative services and media, because companies are not communicating information that is important to the market. Basing marketing communications on research into customers’ attitudes and needs likely will improve the return on marketing investment.

 
 Loss of Competitive Advantage

Maintaining investment in existing products can hand an advantage to competitors. Companies with a strong product orientation may lose customers and market share to competitors who offer a more relevant product to the market. Declining product revenue and the loss of important customers can damage a company’s profitability and, ultimately, its survival.

·        Poor Responsiveness

A company that is not in tune with the marketplace is unlikely to be aware of changing trends and may lose business to competitors who are able to respond quickly to new opportunities. Companies must collect data that allows them to monitor and react to changing market conditions. A change may be as simple as introducing a new colour or offering a product in smaller pack sizes, but without market awareness, a company may miss the opportunity.