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Home » Marketing » What is Production concept?

What is Production concept?

January 11, 2019 By Hitesh Bhasin Tagged With: Marketing

When the production concept was found, a production oriented business dominated the market. This was 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.

The reason that Production was given major importance was because of “Says Law” which stated that Supply creates its own demand (from the French economist Jean – Baptiste Say.)

“Says law” simply meant, If a product is made, somebody will want to buy it. Remember that this was a time when the means of communication were less and people travelled lesser distances too. Sales was mainly done by traveling salesman. And delivering the material after the sales was a hassle as well. There was a shortage of manufactured goods (relative to demand) during this period so goods sold easily.

What does Product Concept mean?

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 pursue 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.

Do note, the production concept is a thing of the past and was used when there was very less competition. At such times, the more you produced, the more will be the consumption of the product. An example in this case is FORD, which manufactured huge number of automobiles through its manufacturing assembly line which was the first of its kind.

Also read – Company orientation towards the marketplace

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About Hitesh Bhasin

I love writing about the latest in marketing & advertising. I am a serial entrepreneur & I created Marketing91 because I wanted my readers to stay ahead in this hectic business world.

Comments

  1. sethulakshmi says

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

    Reply
  2. Renu manki says

    understandablely

    Reply
  3. HABIMANA EVARISTE says

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

    Reply
    • Hitesh Bhasin says

      Thank you for your positive comment.

      Reply
  4. nandini says

    hello everyone
    i want to ask a question

    Reply
    • 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

      Reply
      • Hitesh Bhasin says

        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)

    • Hitesh Bhasin says

      You can ask the same at ask.marketing91.com or you can also ask in comments.

      Reply
      • Muhammad Ozair says

        Hello M. Hitesh Bhasin I’m M. Ozair
        Can You Tell me about the Marketing Myopia? What is Marketing Myopia?

  5. Adnan Shah says

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

    Reply
    • Hitesh Bhasin says

      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.

      Reply
      • Anand R Babu says

        give me some examples on production concept

      • Chandan Mitra says

        I think now a days most of the companies follow Societal Marketing Concept.

      • Hitesh Bhasin says

        I disagree. Many companies have CSR projects where they adopt villages and give back to society. Even the government has implemented measures so that corporates dont harm the environment. But the actual implementation in India is very poor. So many rivers and many land areas are polluted by chemicals. So i think the ideal phase where industrialists themselves take care of Environment and society is far away.

      • Ram says

        could you please give an example which company follow the production concept
        i really need your help

      • Hitesh Bhasin says

        Nowadays hardly any company is following the same. it used to exist when Manufacturing was everything. Ford was the company which started with the manufacturing concept. But nowadays maximum companies are using the “Customer concept”

  6. usman ghani says

    what is production concept
    in marketing

    Reply
  7. ika says

    can you put in the easiest example for it?

    Reply
    • Hitesh Bhasin says

      A live examples is very difficult because all the companies today believe in the customer concept as well as the marketing concept. However, if you see the rise and shine of FORD motor company, then you will know that ford actually established the moving assembly line back in 1913 and that is a perfect example of Production concept in action. Due its sheer genius in production, Ford became the leader of automobiles and amassed a fortune which catapulted it to fame. Much of the success of Ford is attributed to the fact that they can manufacture beautiful cars very fast.

      Reply
  8. kakai immy says

    i think most companies follow marketing concept mainly because of profits maximization goal

    Reply
    • kakai immy says

      i think most companies follow marketing concept mainly because of profits maximization goal
      with a wider market more profits are attained

      Reply
      • Hitesh Bhasin says

        Its not only about the market. There is one more concept which is gaining traction – which is the customer concept. Customers have become so informed nowadays due to the presence of the internet, that as a company, the marketing manager has to literally make customer profiles and then make marketing strategies based on each customer profile. Hence Marketing concept and Customer concept are both concepts in vogue.

  9. john tayrol says

    what philosophy should guide a company’s marketing efforts

    Reply
  10. romeonkamoto says

    how can i cite your writings boss

    Reply
  11. suraj says

    i wanted the name of todays company applying this concept

    Reply
    • Hitesh Bhasin says

      Dear Suraj, As i pointed out before, highly unlikely that any company today uses the production concept. Most of them use the customer concept or the societal marketing concept.

      Reply
  12. Moses Nathaniel says

    What are the two major attributes of installation

    Reply
  13. varun shah says

    could you please give an example of an online company following the production concept?

    Reply
  14. mbune franky r says

    good notes keep on posting

    Reply
  15. Khadijatu jalloh says

    Very good write up.
    But I want to know the differences between production vs marketing under these headings..
    Importance of profit
    Role of sales force
    Role of marketing research
    Inventory levels
    Cost

    Reply

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