Product Market Reorientation

A strategic managerial response to market needs by offering improved and diversified products to increase competitive advantage

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What is Product Market Reorientation?

Product market reorientation is a turnaround strategy for a business that prioritizes strategies that reflect the consumers’ needs and desires. It offers improvement in the ability of a company to provide consumer value through various marketing concepts.

Product Market Reorientation

The approach is typically employed where a fundamental cause of a company’s decline lies in its lack of competitiveness in a particular product market segment. In such a situation, a company refocuses its business strategy to achieve a sustainable recovery.


  • Product market reorientation is a strategic managerial response to market needs by offering improved and diversified products to increase competitive advantage. 
  • Product market reorientation results from a responsive market that matches customers’ expressed desires and eventually develops new and innovative products to achieve a competitive advantage. 
  • By improving customer service about product development, product market reorientation can reduce or prevent competition from rival firms.  

How Product Market Reorientation Works

A product market reorientation is a customer-focused approach that uses knowledge-based competency to design a product. It uses market intelligence to determine what customers view as their current and future needs and competitors’ strategies and capabilities within a particular product category.

Companies may additionally use data analysis to collect market information that reveals the trend and desires of the current and prospective customers, which are not specifically expressed. The collected information about these trends is diffused into departments to help product developers to induce a proper reaction that meets or anticipates consumer preferences.

Companies with a responsive product market reorientation tend to focus specifically on customer responses to attain a sustainable recovery. It allows companies to focus their product development efforts on product features with high demand.

Product market reorientation also involves companies gathering anticipatory market intelligence. It is a proactive market orientation that seeks to identify the consumers’ latest and future needs and choices, while proactively pursuing market opportunities that are not evident to competitors. Products that fulfill such needs delight customers, and consequently, inspire loyalty to generate an incremental competitive edge.

A proactive market reorientation is more likely to lead to radical innovation. Companies actively pursue to redefine the market structure and bring an innovative value proposition that increases competitiveness and sustained recovery.

How Product Market Reorientation Works

Product Market Reorientation Techniques

Companies experiencing declining financial performance and who are at risk of failure tend to pursue various improved performance approaches. At one end of the spectrum, companies achieve product market reorientation through improvement and innovation.

1. Create a compelling value proposition

To be successful, companies can either introduce a compelling value proposition to existing and prospective customers or improve the efficiency of their business processes. It allows businesses to re-fashion and capture established markets, thereby converting losses into profits.

For example, a company that deals with consumer products may enable recovery through new and improved value proposition by radically reworking its price structures to provide customers with more options.

2. Leverage brand equity

Product market reorientation can also be achieved through leveraging of brand equity. Under such an approach, companies invest in improving their reputation. A typical case is where a company decides to reposition its brand according to its new efforts for improved customer service.

Amazon illustrates the concept through its market-oriented strategies. The company’s constantly added new features and processes that reflect the consumers’ concerns and desires to increase its competitiveness.

3. Overhaul existing leadership

Alongside the abovementioned approaches, companies can overhaul their leadership and introduce fresh ideas to attempt new management strategies and work on the improved business model that reflects the customers’ responses in product development.

4. Extension and expansion

At the other end of the spectrum, companies achieve product market reorientation through extension and expansion. Unlike in the improvement and innovation cases, extension and expansion do not need a radical market overhaul or corporate restructuring, especially if a company is committed to a service-oriented culture. Improved profits from the extended product line or market segment can offset any unforeseen downturns.

Similarly, aggressive access to new market segments may also increase a company’s competitiveness based on the boundary breaker strategy. Under such an approach, a company adopts a winning business formula from one geographically defined market to another.

To achieve success with the strategy, a company may use a leadership team that is well conversant with expansion and promotion of brand quality and committed to giving priority to gathering information that is focused on matching strategy. Such a company will improve its image through the services it offers.

Coca-Cola Company is an example of a company that recently achieved market reorientation. The growing health consciousness concerns among consumers compelled the company to acquire other brands, such as Dasani, VitaminWater, Odwalla, Simply Orange, and Smartwater, among others. The company’s efforts introduced innovative value propositions that enable it to reduce or avoid competition.

Advantages of Product Market Reorientation

Market reorientation usually leads to improved customer service and product development that address customer desires and competitors’ strategic approaches. As a result, customer satisfaction remains a priority among companies while promoting brand loyalty.

In some cases, product market reorientation may reveal the customers’ potential desires that cannot be expressed, resulting in the implementation of meaningful and new marketing models that meet customer expectations.

It is important to note that in a worst-case scenario, product market reorientation may reveal market needs and competitors’ strategies that are not cost-effective. Companies must then find viable alternatives that meet customer expectations in a cost-effective manner.

More Resources

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