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The Production Concept-Principles of Marketing| Management Notes

The Production Concept (1770-1820)
Principles Of Marketing
Management Notes

(Slogan: We can sell)
The Production Concept: This is an old marketing concept.It assumes that consumers will favour those products, that are available and affordable so they should focus on improving production and distribution efficiency.It focuses on mass production.
For e.g. Lenovo Computer maker

It’s goal is profit maximization through production efficiency.The industrial revolution (1770-1820 AD) focused on specialization of labour and enhanced production technologies and was the backbone of production concept. It resulted in higher productivity which decreased the cost of products dramatically. This effort continued till 1990s.Production concept assumes that as demand exceeds supply consumers have little product choice.

Underlying implicit premises of production concept

  • Consumers buy products that are available in the market.
  • Consumers buy products that are affordable ie; they prefer to buy low-priced products.
  • Consumers always try to know the prices of the competing products. Hence, price always is a critical marketing variable.
  • Consumers do not give more emphasis on non-price factors such as services, guarantee, quality, etc.

Basic Principles of Production Concept

  1. First of all, start business by establishing the factory to produce the desired product;
  2. Focus on producing the desired product as much as possible;
  3. Sale maximization must be achieved through maintenance of low price of products; (Affordable enough for customer)
  4. The goal of the marketer should be to maximize profit by efficiency in production.

Production concept is slowly losing its significance especially in developed countries where cheap products do not lead to sales.

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