Marketing can be defined as the company satisfying customer and market needs by creating value through communicating and working with customer. Different company have their different business strategies. Marketing can be classified into many types of, such as consumer orientation, marketing orientation, demand orientation and production orientation. An explanation of the academic meaning of marketing orientation and production orientation will be shown in this essay and then their main difference. Marketing orientation is when a company finished some researches of the customer and society needs before them producing products for the markets. Production orientation is when a company manufacture goods for the market without doing any researches. An example of the Champagne markets in French has succeeded in use marketing orientation, wine industries use production orientation to develop their markets. There are four main differences between marketing orientation and production orientation will be discussed in the following words. First of all, their cores are different. Secondly, their selling means are different. Thirdly, their marketing strategies are different. In the end, their goals are different.
Marketing orientation refers to an organization in accordance with market demand to develop the business plan. Business objective should be to satisfy customer needs, not just using the existing production equipment or raw materials. An oversupply in the market, industry competition, consumer products or services required for its wide range of choices has been a market context, business managers how to adapt and meet consumer requirements? Enterprises should in-depth analysis of the markets information and change production planning. And then actively develop some new markets. However, business can stimulate consumption and increase profit by follow these findings to product goods and services. Enterprises have to know the sufficient information before they develop a new product. They need to give full consideration to the interests of customers and society.
Marketing orientation contains two major components: competitor-focus and customer-focus (Heiens, R 2000). In marketing orientation, its’ marketing concept is put the interest of consumers first. Many academic marketing researchers think customer-focus is one of the most important aspects of marketing orientation (Heiens, R 2000). Because it stimulate a company has foresight of their planning. A long-term business may more interest in customer-focus than short-term business. Also a customer-focus company can gain large profits and succeed by pay attention on consumer needs (Heiens, R 2000). A competitor-focus business can easily to identity their goodness and weakness through they compete with other strong contenders. Aim is they can always stay at the top in the industry and become a giant corporation in the future. Thus, business can choose to focus on customer needs in a growing market or on competitors in stable markets.
If a company only use one orientation may caused an economic policy that is doomed to failure. For example, marketing orientation and consumer orientation always coexist in market. Both of them considered customer and competitive first. Customer orientation means an enterprise to meet customer needs and improve customer value for the business starting objective. In the process of marketing, businesses need to pay attention to consumer preferences and consumer behavior. Business need to attach importance to new product development, marketing innovation and then adapt changefully customer requirements. Consumer orientation is a significant basis for marketing orientation for commodity economy. Business must consider customer’s spending power or behavior before doing survey and researches to find consumer demand. Hence, there is interaction between the two orientations.
Production orientation means company will focus primarily on improving yield, and reducing costs through mass production and compression costs to economies of scale. Ultimately achieve the goal of increasing profits. Although the production orientation is the early stages of development in the commodity economy, the lack of integrated marketing sense. But it still is the most important of the marketing concept for some small companies. It is difficult for them to compete with a big company or huge multinationals. Enterprises will try to find some methods to selling their products, such as advertising. They attracted the attention of consumers by putting advertisings on newspapers or TV ads.
There is an example of the small champagne producers in the Champagne region of France. The Champagne region of France has been built for around 1500 years. It’s so popular in making wine in the world. At this wine region, over 34,000 hectares have been planted grapes. Most of the larger and well-known producers have set up at Reims and Epernay, centre of the Champagne region. There are also some small growers in the vineyards, each with around two hectares of land. Most of the biggest sized producers are family enterprises, the largest one producing 1.5 million bottles per year and the smallest only 2000.
The global wine industries face a more challenging trading environment in nowadays. Wine products have already exceeded consumption in the last twenty years (Osmond & Anderson, 1998). There is a general decrease in the French wine industry. However, champagne market still success, both in import and export markets. This success can be believed that champagne producers satisfying international customer demand (Lockshin, L 2002). Meanwhile, the international consumption has decline in the traditional wine producing areas of Europe. Champagne producers have a clear growth strategies and a collaborative approach. They should attach importance to the needs of customers and competitors. They strive on customer needs or tastes and competitors to seek a balance between the marketing concepts, known as “marketing orientation”. Champagne producers use marketing orientation for their main selling policy. So the key success factors for their enterprise because they understood market demand and helpful to customers. Customers have been considered to be the primary focus of a marketing orientation (Payne, A 1988). Satisfying customer should be the primary task of any business (Levitt, H 1960). Champagne producers investigate and study the market potential demand for. Ideally, they understand both of the customer and market needs, competitors’ information, the current wine market trends.
There are some benefits of marketing orientation can be shown through the Champagne market. Champagne producers have the opportunity to understand the current market demand and customer requirements. They are allowed timely to develop and improve new technology and machinery. So the effect of marketing orientation on producing products is increasing effectiveness and efficiency. The main benefit of this approach not only satisfying consumer needs and tastes but also Champagne producers’. Businesses want to make maximize profits from sale wine. Thus, an increasing profits through the increasing customer satisfaction. So profits will increase by consumption increase. So the Champagne producers seem to be absolutely succeeded. If one company insisted on using this strategic approach, his products are likely to survive longer in Champagne market.
Why many wine industries props up enterprises have no market focus? Most of wine industries are family enterprises. They improve producing efficiency and quality of production and then reduce cost of materials, this marketing concept known as “production orientation”. Wine producers do not care about customer or society needs, the production based solely on production plans without consider the possibility to sell them. They have produced wine for more than hundred years. They won’t change technology or selling policy. And they don’t research customer tastes and market demand. In a seller’s market conditions, producers need not worry about wine sales do not sell out. Production orientation is an old kind of business philosophy. Because of this, wine industry began to decline. But champagne market is booming. Therefore, enterprise managers start to recognize that in such a market context, how to adapt to consumer needs and how to achieve customer satisfaction is the most effective planning foundation. It can be believed have very good far-reaching effects to a business (Heiens, R 2000).
There are also some downsides of production orientation are shown through wine industries. Production orientation concept is a basic operating guideline in the early development of commodity economy. During this period, most of the wine industries lacks of productivity. So the deflation occurred in the markets, industry cannot produce enough wines. Supply of goods is less than consumer requirements. Customers can only passively accept the goods on the market, thus forming a seller’s market. Customers will change their behaviour all the time. Thus, these wines may do not meet the customer tastes. They don’t understand customer
The foregoing example suggests that there are many differences between marketing orientation and production orientation. Production orientation is a typical feature of a planned economy. Business producing products based on production plans without regard the possibility to sell them, the product improvements or return of profits. Marketing orientation is based on customers demand and produce marketable products for the purpose of profit. Marketing orientation makes the products are improved constantly in order to meet the market demand.
Firstly, difference between their cores. In production orientation, wine industries sale wine what are they produced. Businesses may not do any survey to research customer tastes and demand. They used traditionally technology and grapes to product wines in many years. Wine producers never care about sales rate and profits. They believed that customers loyalty to the brands. But in marketing orientation, champagne producers produce products what they will sale. Business managers will make an investigation on customer demand and focus on consumer tastes. They product champagne what are consumers demand. Therefore, champagne producers will obtain the maximum profit.
Secondly, difference between their selling means. In production orientation, wine producers may use sales promotion and strong merchandising so as to increase profits. During the period of selling a new product, business put the new characteristics of the product on TV ads. The purpose is to allow more consumers know information of new products. In marketing orientation, champagne producers use a marketing concept “Marketing Mix”. Marketing mix means that a company selected the target markets with an integrated consideration of environmental, capacity and competition (Neil, H 1984). Using all of the factors to be the best combination and use to complete the business purpose and mission (Neil, H 1984). Marketing mix can be considered as an important component of marketing strategy.
Thirdly, differences between them use marketing strategy to promote the products. In production orientation, wine producers do not actively investigate customer preferences and needs. They use the wine’s tastes or wine of a good year to attract customers. In marketing orientation, champagne producers spend a long time doing researches and find customer demand. They meet customer value. Customer value refers that suppliers bring benefits to their customers. Companies will produce what is consumer really needs. Champagne markets can still booming because they satisfied buyers.
Finally, their ultimate goals were different. In production orientation, company gain profits through selling products. They only focus on improving quality of commodities and services and reducing production costs, whatever can they sale out. In marketing orientation, company satisfy customer needs in order to gain profit. They will produce the popular products which are the customer really want to buy, even though some commodities may too expensive.
In conclusion, wine production is an interaction of the producer’s purposes. Their market focus, their marketing background, and the changes in the industry generally. Additionally, market strategies depend on how the owner views him/herself.