Orientations and Core Competencies

Mrs. Brown wants a new kitchen table. She opens the phone book to find a list of local furniture companies and calls them to inquire if they have a 64" oval table.

1. A representative at the first company says, "We have state-of-the-art mill work equipment and produce more than 12,000 tables every month. Our equipment is set-up to make only square tables and I have 50 64" tables in stock right now. I can give you the best price in town and you can pick up your new table in 1 hour.
2. A sales associate from the second company says, "Our family has been making tables for more than 125 years. We have one 64" oval table right now - it's an Empire style mahogany pedestal table with a quadraform base and a rose colored Carrara marble top. My uncle is working on a new 64" oval table right now using a rare Brazilian walnut in the French style and it will be completed in about six weeks.

3. The manager at the third company says, "We 1,500 stores nationwide and are the leading retailer of furniture for more than sixty different manufacturers. We also have a fleet of trucks and can deliver your table to your home."

4. A sales person for the forth company says, "Before I tell you what we have, help me to understand what your requirements are. How do you plan to use this table? What style is your other furniture? How large is your dining area? How many people would you like to seat?

These responses represent the four different marketing orientations.

1. Production. The first response is indicative of a "production" orientation, because the company's marketing activities are limited by its manufacturing capabilities and capacity. It's difficult for production oriented companies to change their specifications and processes quickly, so marketers for these companies have to focus on availability and price. Establishing a large distribution network and achieving economies of scale are important for these companies, which include most large manufacturers and farmers. Once Ford sets up a production line, it's difficult for Ford to change the shape of a car. Likewise, if a farmer has 1,000 acres of Granny Smith apple trees, it cannot switch over to Fuji apples quickly.

2. Product. The second response indicates a "product" orientation, because the company's marketing efforts are limited by the skill of its workforce and the quality of its materials. Product oriented companies invest in expertise, which is expensive, and product development is usually time-consuming, so marketers for these companies have to focus on quality and set higher prices. Product oriented companies include luxury brands, pharmaceutical companies and engineering firms. At the Louis Vuitton workshop in Asnieres-sur-Siene, for example, artisans have to complete several years of apprenticeship before they graduate to the atelier and are allowed to build LV's famous steamer trunks. The wood for the trunks is okoume, a hard, lightweight wood from Africa. Each trunk takes several weeks to complete and sell for more than $10,000 each.

4. Sales. The third dialog above is typical of a "sales" orientation, because the company's advantage is its footprint, i.e. the number of locations or sales people it has. The customer advantage is convenience. Insurance companies like State Farm, financial service providers like AG Edwards, and retailers like the GAP are typical sales oriented companies. Marketers for

these companies invest mostly in the customer experience and training.

3. Marketing. The third response above represents a "marketing" orientation, because the company has the flexibility to change it's product line to match the customer's needs. The entertainment, fashion, and consumer electronics industries have to have a strong marketing focus, because their product life cycles are very short and if they do not have a good understanding of what customers want, they could easily miss a fad or trend. New technologies are enabling some manufacturers to be more marketing oriented. For example, digital printing presses and rapid prototyping equipment reduce set-up times and make the production of new products fast and affordable. Honda invested millions of dollars to convert one of its plants to a flex-plant. Whereas it used to take Honda 13 months to modify its production in response to sales trends, it now takes just minutes.

Academic literature will have you believe that a company has one

orientation. Actually all companies have a combination of orientations, which I call the "orientation mix." I use a mixing console akin to that you'd find a music studio to illustrate a company's orientations. Sam Adams prides itself foremost on the quality of its beer. It's brewing process, and the quality of its ingredients, which all speak to a product orientation. In recent years, Sam Adams has responded to the craft brew trend with an ever-growing line of specialty beers, thus indicating a marketing orientation. Sam Adams must have a small sales force and certainly has a brewery, but it's growth is not predicated on its capacity, price, or availability.

The academic literature will also have you believe that the marketing orientation is best or preferred. This is not true. Remember, it is our job as marketers to match the company's resources with the most profitable opportunities. If the company you work for has made enormous investments in machinery for manufacturing a specific part, that part is all you can market - for the time being. Naturally, you should constantly monitor the marketplace to identify new opportunities and threats, but understand that your company's ability to respond to changes in demand may be limited by it's core competency.

In addition to helping you understand how your company can grow, orientations determine the type of partnerships you seek. For example, if you have mass production capabilities, you need a partner that has a very strong sales orientation, i.e. a huge distribution network. See the posting titled "Partnerships and Channels."