Production Orientation
Production orientation follows the premise that any product of high quality can be readily sold.
LEARNING OBJECTIVES
Demonstrate the characteristics of production orientation from an economic and marketing perspective
KEY TAKEAWAYS
Key Points
Prior to the 1950s, the production orientation generally held true due to the growing numbers of affluent and middle class people that capitalism had created.
Say’s Law states that the “production of commodities creates, and is the one and universal cause which creates, a market for the commodities produced”.
The emphasis of firms adopting a production orientation of marketing would have been based on the theory of economies of scale, which are the cost advantages that an enterprise obtains due to expansion.
Key Terms
minimum efficient scale: The smallest output that a plant (or firm) can produce such that its long run average costs are minimized.
Production Orientation
The evolution from production-oriented organizations to marketing-oriented organizations was driven by a shift toward a marketplace that catered to meeting customer wants and needs rather than strictly delivering product features and functionality. In today’s business world, it can be argued that customer desires, concerns, and opinions, rather than industry profits, are the driving force behind many strategic business decisions.
However, until the 1950s, organizations relied on the assumption that their businesses would be profitable so long as they produced high quality products that were durable and worked well. This business model — also known as production orientation — soon became outdated as the marketplace turned into an increasingly crowded and global one. In the decades since its introduction, marketing orientation has been the model of choice for brands looking to sell products that compete effectively for consumer attention and brand loyalty.
Economies of Scale in Production-Oriented Organizations
During the Industrial Age of the 18th and 19th centuries, production-oriented companies thrived due to both the scarcity and high demand for mass-produced, high quality goods and services. Industrial firms focused on production orientation models that exploited economies of scale to reach maximum efficiency at the lowest cost. This business practice can also be explained by Say’s Law, which states that “products are paid for with products” and that “production of commodities creates, and is the one and universal cause which creates a market for the commodities produced.
Product Orientation
A firm employing a product orientation is chiefly concerned with the quality of its product.
LEARNING OBJECTIVES
Describe the basis for a company using product orientation as its marketing premise
KEY TAKEAWAYS
Key Points
A firm employing a product orientation would assume that as long as its product was of a high standard, people would buy and consume the product.
Under the product orientation, management focuses on developing high quality products which can be sold at the right price, but with insufficient attention to what it is that customers really need and want.
Product orientation assumes a developing or closed economy where few, if any, choices are available.
Key Terms
Market Share: The percentage of some market held by a company.
Selling Orientation
As opposed to production or product orientation, a sales orientation focuses primarily on the selling and promotion of a particular product.
LEARNING OBJECTIVES
Outline the methodology and importance of selling orientation as it relates to product inventory
KEY TAKEAWAYS
Key Points
A sales orientation entails simply selling an already existing product and using promotion techniques to attain the highest sales possible.
Such a modern day orientation may suit scenarios in which a firm holds dead stock, or otherwise sells a product that is in high demand, with little likelihood of changes in consumer tastes that would diminish demand.
Selling orientations of marketing became popular after the untapped demand following World War II was saturated in the 1950s, when products were not selling as easily as they had been.
Key Terms
dead stock: Merchandize that had been removed from sale, now offered for sale at a later date.
Selling Orientation
As opposed to production orientation or product orientation, a firm using a sales orientation focuses primarily on the selling and promotion of a particular product. The successful management of the relationship between the company and its customers defines the act of sales or selling. It creates value for customers. Emphasis is not placed on determining new consumer desires, as such. Consequently, this entails simply selling an already existing product and using promotion techniques to attain the highest sales possible. Such a modern day orientation may suit scenarios in which a firm holds dead stock, or otherwise sells a product that is in high demand, with little likelihood of changes in consumer tastes that would diminish demand.
Approaching marketing with a selling orientation was popular for companies in the 1950s and 1960s. Up to this point, a growing population and lack of significant competition combined to create an environment in which production and product orientations could lead to success. However, after the untapped demand caused by the second World War was saturated in the 1950s, it became obvious that products were not selling as easily as they had been. The answer was to concentrate on selling. The 1950s and 1960s are known as the sales era, as the guiding philosophy of business at the time was the sales orientation.
A marketing orientation centered around sales represented a major milestone in modern business. The amount of competition being realized at that point was unprecedented, and the scale of consumerism was rising. For the first time, a more significant effort had to be made to understand the desires of potential customers. In today’s realm of marketing, selling has developed into a holistic business system required to effectively develop, manage, enable, and execute a mutually beneficial, interpersonal exchange of goods and services for equitable value. In other words, the importance of selling makes it indispensable to modern business, and it has subsequently evolved into a complex system. Effective selling requires a systems approach, at minimum involving roles that sell, enable selling, and develop sales capabilities.
Sourses: courses.lumenlearning.com
Production orientation follows the premise that any product of high quality can be readily sold.
LEARNING OBJECTIVES
Demonstrate the characteristics of production orientation from an economic and marketing perspective
KEY TAKEAWAYS
Key Points
Prior to the 1950s, the production orientation generally held true due to the growing numbers of affluent and middle class people that capitalism had created.
Say’s Law states that the “production of commodities creates, and is the one and universal cause which creates, a market for the commodities produced”.
The emphasis of firms adopting a production orientation of marketing would have been based on the theory of economies of scale, which are the cost advantages that an enterprise obtains due to expansion.
Key Terms
minimum efficient scale: The smallest output that a plant (or firm) can produce such that its long run average costs are minimized.
Production Orientation
The evolution from production-oriented organizations to marketing-oriented organizations was driven by a shift toward a marketplace that catered to meeting customer wants and needs rather than strictly delivering product features and functionality. In today’s business world, it can be argued that customer desires, concerns, and opinions, rather than industry profits, are the driving force behind many strategic business decisions.
However, until the 1950s, organizations relied on the assumption that their businesses would be profitable so long as they produced high quality products that were durable and worked well. This business model — also known as production orientation — soon became outdated as the marketplace turned into an increasingly crowded and global one. In the decades since its introduction, marketing orientation has been the model of choice for brands looking to sell products that compete effectively for consumer attention and brand loyalty.
Economies of Scale in Production-Oriented Organizations
During the Industrial Age of the 18th and 19th centuries, production-oriented companies thrived due to both the scarcity and high demand for mass-produced, high quality goods and services. Industrial firms focused on production orientation models that exploited economies of scale to reach maximum efficiency at the lowest cost. This business practice can also be explained by Say’s Law, which states that “products are paid for with products” and that “production of commodities creates, and is the one and universal cause which creates a market for the commodities produced.
Product Orientation
A firm employing a product orientation is chiefly concerned with the quality of its product.
LEARNING OBJECTIVES
Describe the basis for a company using product orientation as its marketing premise
KEY TAKEAWAYS
Key Points
A firm employing a product orientation would assume that as long as its product was of a high standard, people would buy and consume the product.
Under the product orientation, management focuses on developing high quality products which can be sold at the right price, but with insufficient attention to what it is that customers really need and want.
Product orientation assumes a developing or closed economy where few, if any, choices are available.
Key Terms
Market Share: The percentage of some market held by a company.
Selling Orientation
As opposed to production or product orientation, a sales orientation focuses primarily on the selling and promotion of a particular product.
LEARNING OBJECTIVES
Outline the methodology and importance of selling orientation as it relates to product inventory
KEY TAKEAWAYS
Key Points
A sales orientation entails simply selling an already existing product and using promotion techniques to attain the highest sales possible.
Such a modern day orientation may suit scenarios in which a firm holds dead stock, or otherwise sells a product that is in high demand, with little likelihood of changes in consumer tastes that would diminish demand.
Selling orientations of marketing became popular after the untapped demand following World War II was saturated in the 1950s, when products were not selling as easily as they had been.
Key Terms
dead stock: Merchandize that had been removed from sale, now offered for sale at a later date.
Selling Orientation
As opposed to production orientation or product orientation, a firm using a sales orientation focuses primarily on the selling and promotion of a particular product. The successful management of the relationship between the company and its customers defines the act of sales or selling. It creates value for customers. Emphasis is not placed on determining new consumer desires, as such. Consequently, this entails simply selling an already existing product and using promotion techniques to attain the highest sales possible. Such a modern day orientation may suit scenarios in which a firm holds dead stock, or otherwise sells a product that is in high demand, with little likelihood of changes in consumer tastes that would diminish demand.
Approaching marketing with a selling orientation was popular for companies in the 1950s and 1960s. Up to this point, a growing population and lack of significant competition combined to create an environment in which production and product orientations could lead to success. However, after the untapped demand caused by the second World War was saturated in the 1950s, it became obvious that products were not selling as easily as they had been. The answer was to concentrate on selling. The 1950s and 1960s are known as the sales era, as the guiding philosophy of business at the time was the sales orientation.
A marketing orientation centered around sales represented a major milestone in modern business. The amount of competition being realized at that point was unprecedented, and the scale of consumerism was rising. For the first time, a more significant effort had to be made to understand the desires of potential customers. In today’s realm of marketing, selling has developed into a holistic business system required to effectively develop, manage, enable, and execute a mutually beneficial, interpersonal exchange of goods and services for equitable value. In other words, the importance of selling makes it indispensable to modern business, and it has subsequently evolved into a complex system. Effective selling requires a systems approach, at minimum involving roles that sell, enable selling, and develop sales capabilities.
Sourses: courses.lumenlearning.com