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.

AMAZON INDIA MARKETING STRATEGY

Mission – “To be Earth’s most customer-centric company, where customers can find and discover anything they might want to buy online, and endeavours to offer its customers the lowest possible prices,”

Vision- “To leverage technology and the expertise of our invaluable employees to provide our customers with the best shopping experience on the internet”

Tagline – “#Aur Dikhao” in India.

                 “From A to Z” globally.

A decade into the new millennium, India, with its billion-plus people and largely untapped e-commerce market, beckoned. The country posed a classic case of good news, bad news. The good news included a very young populace — more than 65% under age 35 — rising levels of disposable income, and ubiquitous cell phone ownership (80% of the population, by one estimate).

The bad news: 67% of the population lives in rural areas characterized by an underdeveloped infrastructure. Only about 35% of India’s population is connected to the internet. Cash, not credit cards or checking accounts, is still the rule. And, determined to protect its own, India enacted a rigid FDI policy restricting foreign multibrand retailers from selling directly to consumers online. That meant any venture would basically be a third-party seller for Indian-made products.

To respond to these challenges, after launching its Indian website in 2013, Amazon developed a program to recruit an army of suppliers and convince them it was a trustworthy partner that could help them increase the market for their products. Amazon wheeled out a program called Amazon Chai Cart: mobile tea carts that navigated city streets, serving refreshments to small-business owners while teaching them the virtues of e-commerce. The Chai Cart team reportedly traveled more than 9,400 miles across 31 cities and engaged with more than 10,000 sellers. To help these sellers get online quickly and address their objections to e-commerce, last year Amazon created Amazon Tatkal, a self-described “studio on wheels” that provides a suite of launch services, such as registration, imaging, cataloging, and sales training.

The company also localized its fulfillment platform in India by introducing Easy Ship and Seller Flex. With the former, Amazon couriers pick up packaged goods from a seller’s place of business and deliver them to consumers. With the latter, vendors designate a section of their own warehouses for products to be sold on Amazon.in, and Amazon coordinates the delivery logistics. This “neighborhood” approach is convenient for sellers and has benefited Amazon by speeding up delivery of some products.

Amazon has contracts with a number of major delivery services in the country, including India Post and cargo airline Blue Dart. Last year it set up a subsidiary, Amazon Transportation Services Private Limited, to augment delivery. And it utilizes bicycle and motorbike couriers for last-mile deliveries in both urban and rural communities. But rural areas, which often are literally off the beaten path, pose special challenges.

Instead, Amazon has enlisted mom-and-pop store owners as partners in its delivery platform. In small villages and remote areas where few people have internet access, residents can go to their local store and use the owner’s internet connection to browse and select goods from Amazon.in.

Adidas: Market or Product orientated?

Market Orientation - Market orientation is outward looking where the business focuses on market research, meaning to understand their consumers' needs and wants.

Product Orientation - Product orientation is inward looking, focusing on research and development to come up with innovative products for their market.

 
Adidas: Market or Product orientated?

Adidas has taken a more marketing approach in its development of the sports apparel industry. Adidas highlighted in its 2011 annual report that “a profound understanding of the consumer and customer” is essential to achieving their goal.

Adidas focused its investments on high-potential markets, in particular China and Russia. The company strives to “fully exploit market opportunities” by presenting their brands to the consumer in the most impactful way. In the sports industry, customers and consumers tend to know what they want (whether it be running shoes, basketball, badminton racket etc.) which makes Adidas more focused on satisfying the needs and wants of the consumer.

However, there are instances where Adidas lean towards product-orientation where they invest in their research and development to experiment with new technologies to create a lightweight shoe, or better cushioning for the soles. However, Adidas is mostly market-oriented in that the company focuses on their target market (e.g. basketball players, runners, football players, athletes of various ages etc.).

They are more market orientated than product orientated, which means they put emphasis on market research. This is shown in their 2012 Annual Report, "Inspired by our heritage, we know that a profound understanding of the consumer and customer is essential to this goal."

They "push the boundaries of products, services and processes to strengthen our competitiveness and maximise the Group's operational and financial performance". They focus on satisfying the needs and wants of their customers by continuously striving to create a culture of innovation.

At the very heart of ‘Creating the New’ is the brand Adidas. The brand is what connect them with their consumers; therefore, the success of the brand defines the success of their business. Through their unique portfolio, they cater for the needs and desires of more consumers than any of their competitors. 

Accelerating journey towards digital banking with a 'Bank within a Bank' model

Businesses across various and diverse industries have seen rapid disruption in the past few years. One of the major drivers for this disruption is the consumer and how they are coming to expect a Frictionless approach. Some have called it the Uber effect. No cash is needed, it is on demand and simple to use. That experience is what customers are now expecting when interacting in the Ecommerce world.  Many traditional corporates are playing catch-up and some like Sears, JC Penny's, American Eagle, Sports Authority and Barnes & Noble cannot pivot fast enough, leaving them in a position of reporting negative growth or closing all together. Players like Amazon are disrupting their business models by leveraging the latest in technology and rolling out customer centric digital offerings. These offerings appealed to the digitally savvy customers and those companies have grown rapidly over the past few years. 

The world of banking has seen its own share of disruption. The current business models, organizations structure, culture, processes and technology platform at conventional banks were not designed for this digital era and hyper connected environment. However, many progressive banks have started getting their act right for the new banking ecosystem and digital transformation is now a priority for most banks. Our recent research found that 78% banks want to create a customer centric organization as a priority for digital transformation. Progressive banks have realized that a truly digital strategy is not just adding new channels or enhancing the same old banking business models with digital technology. They understand that they need to rethink their entire business, their organization, indeed their very identity, to align with digital age realities.

Some banks are approaching the digital transformation journey by forming or acquiring digital oriented subsidiaries, a bank within a bank model. According to our recent research, approximately 60% of banks are launching or considering launching a digital only bank as a strategy for dealing with digital transformation. Banks have the right reasons for opting this route as well - over 80% of these banks said that the digital only banks allows them to offer new products & services quickly & leverage modern technologies to design processes that will give them the required agility. This helps them to expand into new customer segments as well.

One such promising example is Marcus, a brand of GS Bank, providing products to help people manage their finances. The first product from Marcus is a fixed-rate, no-fee unsecured personal loan that enables customers to tailor their monthly payment options to fit their schedule and budget. Marcus provides consumers with a transparent and simple approach to consolidate their high-interest credit card debt.

I am delighted that Marcus has deployed the Finacle solution to manage the complete consumer loan-servicing life cycle. Marcus is now able to deliver extensive self-service capabilities on digital channels to design truly personalized products. The system will give end-consumers the flexibility to choose lending terms such as repayment amount and tenure. I feel Marcus by Goldman Sachs is displaying exemplary vision in creating new business opportunities by leveraging modern technology.

Time is of the essence for banks to get their digital strategy and execution in place. It is important that banks also take the lead in identifying emerging and unmet consumer needs and leverage technology to capitalize on the opportunities quickly. The approach should be to build on existing strengths of scale, reputation, brand, trust and customer relationship, and in parallel, experiment with new technologies, innovations and business models befitting the digital age. The bank in a bank model will help banks to relook at the business afresh, upend legacy practices, and generally help think like a startup clearly. 

Brand Managers vs. Product Managers: What’s the difference?

"For lots of companies, their central product is also, in a sense, their brand."

This can be confusing, because products and brands aren’t the same thing. And product managers and brand managers don’t do the same thing. So how are these positions different—and how do they work together?

Products vs. Brands

To understand these two roles, we first need to understand what it is they’re actually managing. As we’ve already explored, a product is a good or service offered to customers for benefits. It can be a tangible or virtual item (a good), or a package of activities (a service).

A brand, on the other hand, is a much more abstract concept. A brand is the “what” and “why” of an organization. It refers to how an organization is perceived—an inevitably abstract metric.  “A brand is the set of expectations, memories, stories and relationships that, taken together, account for a consumer’s decision to choose one product or service over another.”

PMs vs. BMs: Their responsibilities

So how do product managers and brand managers spend each day? Let’s take a look at where they funnel their energy.

Product managers focus on the design and features of a particular product. Their work can be highly logistical and (at least somewhat) technical, involving close horizontal collaboration with executives, developers, sales and marketing. They aim to improve, upgrade and maintain fluid functioning of their product, with a strong emphasis on how customers actually interact with it and how it fits into the market. They deliver the products that people use.

Brand managers focus on the maintenance and perception of a particular brand. Their work is often strategic, involving high-level curation of both their company’s image and the practical steps it will take to maintain that image. Brand managers often work at consumer product companies with mass-market output. They aim to enhance, maintain and inspire interest in their brand, with a strong emphasis on marketing and how their overall organization is viewed. They inspire feelings, reactions and loyalty.

Different value propositions

Another way to distinguish between product managers and brand managers is to understand their divergent value propositions.

“A value proposition is a business or marketing statement that summarizes why a consumer should buy a product or use a service.”

Product managers create value propositions that convey tangible rewards. They build products with the goal of offering measurable value: to make you more productive, to improve communication, to make beautiful roadmaps quickly.

Brand managers also create value propositions, but theirs are more intuitive. Brand managers spark perceived value—a sense that “buying in” to the brand will have a payoff. The nature of that payoff is more abstract. It could be something tangible (like actual, increased productivity) or it could simply be the feeling of increased productivity that the brand inspires.

Different pain points

Different jobs, different stressors. Because product managers are responsible not just for the development, but also the ongoing health and well-being of their product, they must constantly triage and address new requests, releases and bugs. Their job is far from finished once a product is launched. And while their product may operate on a long life-cycle, they must constantly and creatively come up with new versions and upgrades that will keep their product competitive.

Brand managers, on the other hand, typically work on shorter cycles. They are responsible for product line depth, width and extensions, and often experience more day-to-day urgency. Because it’s up to them to prevent brand obsolescence, they must constantly and creatively come up with new products that will keep the brand top-of-mind and top-of-market. Their function is much more than simply PR—they strategize how to keep the business (and the brand) current across every channel.

So how do they feed each other?

Guess what! Brand managers and product managers don’t operate in a vacuum. Their functions are interrelated.

The product manager supports—and sometimes helps create—the brand. Product managers are responsible for consistently building and maintaining products that serve as a tangible touch-point to that brand.  “Everything you say and do, and everything you don’t say and don’t do, communicates.” Products communicate, and product managers are responsible for making sure they communicate the right brand.

The brand manager, meanwhile, creates a mind-space for the product. Since brand managers are concerned about brand obsolescence—or rather, avoiding obsolescence—they need to drive the introduction of new products into the marketplace. While product managers might be responsible for the upkeep of one product, brand managers cultivate the soil in which new products can grow.