When it comes to the fundamental strategy of running a business, most entrepreneurs follow an orientation that matches one of the following three categories: product-oriented, sales-oriented, or market-oriented.
Product Orientation
Business with a product orientation emphasizes on the product itself rather than on the consumers' need. The typical mentality is that a good product will sell itself. For a product-oriented firm, the focus is first on the production of goods or services, then look for people who will buy them. Such strategy is very limiting. It often runs into trouble when the producer’s rates and values of his products are not same as that of the market.
Sales Orientation
Although a firm with sales orientation is still quite product-oriented, it recognizes that the world will not beat a path to its doors to buy its products. Therefore, the firm relies on hard sell campaigns to convince consumers to purchase the goods it produces. The get-the-customer-to-fit-the-company’s-offerings strategy often results in high costs of selling and low customer loyalty.
Market Orientation
More and more companies have found that the product and sales orientations are quite limiting. Therefore, a firm with market orientation focuses first on discovering what customers want and then making products to satisfy their needs. This strategy is based on the concept developed by Peter Drucker, John B, McKitterick and Ted Levitt that the purpose of business is to create satisfied customers. Consumers will demand products that meet their needs. Market orientation strategy, at the extreme, can make selling effortless. Market orientation is an improvement from the product and sales orientations.
Many small business owners may think that their expertise in their products or their good sales skill is an advantage. But in many cases, their expertise and sales skill are actually a liability because they tend to be product oriented or sales oriented.
