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Balancing Customer and Product Orientation in Business Strategy

In today's competitive market, businesses must decide between customer orientation and product orientation. Customer orientation focuses on understanding market demands, allowing businesses to provide products and services that meet existing needs through research and customer feedback. Conversely, product orientation emphasizes innovation, encouraging businesses to develop products based on their understanding of consumer desires, often requiring significant investment in R&D. Successful companies typically blend these approaches, assessing risks and rewards to determine the best strategy for sustainable growth.

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Balancing Customer and Product Orientation in Business Strategy

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  1. Customer and Product Orientation

  2. Providing the market. • Businesses have to decide what product / services to provide next for the market. • They have to decide between: • Giving more of the same, or • Something new / different.

  3. Customer / Market Orientation • Allows customers to determine what market provides. • Most business follow this method. • Identified through ‘requests’ and demand for other existing products / services as well as market research • Tend to carry out if not able to take high risks and happy playing safe. • Examples • Celebrity love island – Celebrity Big Brother – Celebrity Family Fortunes – Celebrity Who Wants to Be A Millionaire – Get Me Out Of Here.

  4. Product Orientation • Involves developing and providing products in the hope that customers want them. • Businesses believe they know what customers want. • Customers need persuading • Creates innovation and risk taking in the market. • Means businesses have to invest heavily in R&D and stay ahead of the competition. • However reward can be massive and create new markets for exploitation • Example. • Nintendo Wii • Pixar – Toy Story • Big Brother • E-Bay • Sinclair C5Vid

  5. In Reality • Business have to choose when to be customer or product orientated. • Risk and rewards in each. • Usually a mixture of the two is used. • Customer Orientation with an USP

  6. Task

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