What Is a Business Orientation?

Business leaders are faced with numerous decisions every day. The options and strategies are countless – and without deliberate planning, they are left always guessing at what to do. The way a company approaches its strategies for success is called its business orientation. There are four types of company orientation and strategic planning that help define a business. The four are production, product, marketing and sales orientation.

Production Orientation

In production orientation, managers focus heavily on manufacturing. The operations of the business are the focus as the strategy becomes attaining price leadership in the niche, meaning offering the cheapest products. If a company can reduce costs to sell the lowest priced manufactured product on the market, it can win against competitors selling the same or similar products. The strategy looks to save money in the production and cost of goods sold.

Leaders might try to get their raw materials cheaper by purchasing in larger quantities or finding different suppliers. The company might innovate to use cheaper materials that provide the same quality. Automation in manufacturing might reduce payroll costs. All of these strategies fall under production orientation strategy.

Product Orientation

Product orientation is often about innovation. This strategy seeks to take existing products and make them better or to innovate new products to solve existing problems. When business leaders are in a product orientation mode, they focus heavily on the features and benefits of products. A company selling workout clothing might constantly seek better material to wick sweat off the body, for example. This improvement allows the company to stay ahead of the competition and remain relevant.

Strategies with product orientation focus on customer satisfaction, feedback and newly identified needs. The business will regularly survey existing customers and seek focus groups to identify what makes customers happy. By solving specific consumer needs, the company develops strong relationships and customer loyalty.

Marketing Orientation

This business orientation model looks at flooding the market with ads and brand placements. Marketing orientation focuses on the brand staying “top of mind,” so when customers think about buying that type of product or service, the company’s product is the first one they consider. Consumers aren’t looking to buy insurance every day, yet State Farm’s logo appears behind home plates, along end-zones and by shot clocks. The company wants consumers to remember it when they decide to shop for new insurance.

Marketing orientation also seeks to help customers associate the company’s products with specific feelings and positive solutions. A commercial for a cup of Campbell’s Soup stokes memories from childhood like being sick with your mom taking care of you. It brings good feelings – even if your mom didn’t give you Campbell’s Soup. Consumers start to associate the soup with getting better, Mom’s caring touch and the comforts of home.

Sales Orientation

The sales strategy is transactional in design. A sales orientation is about moving product and generating cash flow. This is often a short-term solution for businesses – thus the relationships sought in all the other strategies are ignored. A company might run promotions that essentially break even or lose money to drive traffic through the doors. The goal is to build market share, even if there is a sacrifice in long-term customer loyalty and profitability.

Because this strategy doesn’t focus on the customer’s needs, it does lead to customer turnover. Companies using this strategy must transition into loyalty programs with the market share already captured. The sales orientation is effective for creating awareness and taking consumers from competitors, but the company must find a way to keep them. Amazon started out as a cheap place to buy books online. This strategy made it very popular and allowed it to capture a huge market share, so it transitioned into other sales niches and multibillion dollar profits. It would not have survived as just the cheap book vendor.