The market orientation that a firm adopts varies depending on the product life cycle, the level of competition within the market, and external factors such as the economic environment. Companies are likely to modify their market orientation over the life cycle of a particular product, and it is common for a single company to have different products with different orientations. There is no one orientation that is appropriate for all products, and the changing environment and global market in which today's companies operate mean that orientations are likely to undergo rapid change. Despite the importance that market orientation plays in a company's success, many companies are unaware that their products have a particular orientation, or that by managing the orientation and the associated activities, they can improve their performance. This research considers the four types of market orientation--production orientation, product orientation, selling orientation and marketing orientation--and considers when it is appropriate to engage in each.
The product life cycle is a model that predicts the sales of a product over time as an S-shaped curve. The area under the curve is divided into four sections: introduction, growth, maturity and decline (Rink, Roden & Fox, 1999). During the introduction phase, unit sales increase as the product gains acceptance in the market. During the growth phase, unit sales increase rapidly as the product expands its market share. Increased competition is seen during this phase as other companies seek to profit from the product. During the maturity phase, unit sales begin to decline, there is a saturation of competitive and substitute goods, and profit margins fall. During the decline phase, unit sales drop off significantly, competition lessens, and the product is eventually phased out of the market unless there is some type of intervention (O'Connor, 2002).
Production orientation is, as its name ...