August 24, 2016

Production concept

When the production concept was found, a production orientation business dominated the market from the beginning of Capitalism to the mid 1950’s. During the era of the Production concept, Business concerned itself primarily with production, manufacturing, and efficiency issues. This view point was encapsulated in Says Law which states Supply creates its own demand (from the French economist Jean – Baptiste Say.) To put it another way, If a product is made, somebody will want to buy it. The reason for the predominance of this orientation is there was a shortage of manufactured goods (relative to demand) during this period so goods sold easily.

Production concept

The basic proposition of the production concept is that customers will choose products and services that are widely available and are of low cost. So business is mainly concerned with making as many units as possible. By concentrating on producing maximum volumes, such a business aims to maximise profitability by exploiting economies of scale. Managers try to achieve higher volume with low cost and intensive distribution strategy. This seems a viable strategy in a developing market where market expansion is the survival strategy for the business. Companies interested to take the benefit of scale economies purse this kind of orientation.

In a production-orientated business, the needs of customers are secondary compared with the need to increase output. Such an approach is probably most effective when a business operates in very high growth markets or where the potential for economies of scale is significant. It is natural that the companies cannot deliver quality products and suffer from problems arising out of impersonal behavior with the customers.

Also read – Company orientation towards the marketplace

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About Hitesh Bhasin

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  1. sethulakshmi says:

    excellent,terms can be easily understood, I can make my students to go through this website and browse for required information

  2. Renu manki says:


  3. I really loved your articles and i would not hide my thanks to you.

  4. nandini says:

    hello everyone
    i want to ask a question

    • nandini says:

      if we want to start a new job portal we require resumes and job postings how can we market new website pls tell me the ways

      • Frankly online marketing is a huge huge topic. I have not covered it yet because of lack of time. However, please specify whether you want to start a job portal (many paid softwares available) or a new website (needs designers)

    • You can ask the same at or you can also ask in comments.

  5. Adnan Shah says:

    Can you explain it with example of a company, why it is a product oriented company?

    • Well, there are very few companies following the production concept nowadays. Most of them are actually customer and marketing oriented. Production concept was used when there were very few options in the market.

      • Anand R Babu says:

        give me some examples on production concept

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