Various concepts have evolved over time which have helped businesses expand and improve sales. The business-building concepts in practice today include the following:
- Production concept
- Production concept
- Sales concept
- Marketing concept
- Societal marketing concept
Among the above is the Production Concept which was the foremost, and which was the basis of the others, explained in this article.
What does the Production concept mean in business or marketing?
That's one common question most students and professionals in marketing, management, or entrepreneurship ask. You'll learn the meaning of the "production concept," and how it differs from the
“product concept”, and some practical examples of companies that have applied it.
Not only that, you'll discover how the production concept emerged, its influence on business practices, and its evolution into more customer-centric marketing approaches.
1. ’Production’ concept
The production concept is one of the marketing concepts that emerged around the mid-1800s when the Industrial Revolution kicked off in the United States. Even though most people still worked on farms at the time, the boom in business and industry brought millions of folks to cities and towns to work in factories.
Businesses produced more products faster than ever, and these products were distributed to people's homes quickly.
_What does the production concept as a marketing and business philosophy suggest? _
It implies that consumers are more concerned about a product's availability and price than its features and benefits. Based on this notion, many businesses in the past focused on large-scale or mass production and low cost. They believe that if they create products, people will come for them.
The production concept is said to have started after the Civil War and continued until the 1920s. For example, Samuel Colt's company began making revolvers in bulk in 1835. Another example is the Waltham Watch Company, the first to use division of labor to make watches and clocks in mass production.
2. ‘Product’ concept
Mass production was good but competition grew, and markets evolved to understand the need to differentiate their products. Hence the Product concept came about, wherein companies began to commit business resources and efforts to make superior products with more benefits and features for their customers. A typical example of a company that demonstrates this marketing approach is Apple.
That's because they focus on user experience when developing their products. Apple charges high prices for its products, yet its loyal fans are happy to pay more because they believe in the top-notch quality and user experience the company’s products provide.
Difference between Product Concept and Production Concept
As said, the production concept is a production-oriented marketing approach companies adopt. _It focuses on high-volume production, low commodity costs, and prices without prioritizing customers' needs. _
One advantage of the production concept is its mass production element so that consumers don't have to worry about a product shortage. Also, with the production concept in business, products are available at reasonable prices to customers. However, one significant disadvantage of this marketing concept is that it often leads to low quality.
On the other hand, the Product Concept as a marketing concept was more prevalent from the 1920s until the 1950s. This ideology made customers more concerned about superior products, benefits, and features; which made businesses recognize this need and move to a product-oriented concept.
The product concept focuses on satisfying the needs and wishes of a targeted market segment. That means businesses execute marketing campaigns through a personalized approach. Unlike the Production concept, this marketing philosophy thrives in a competitive market environment.
Thus, as a business owner, you must offer the best to stay ahead of your competitors. That is the crux of the product concept as a marketing theory or philosophy.
3. Selling concept
This marketing concept emphasizes that a company needs more than a product's availability and adequacy (regarding quality and benefits) to convince customers to purchase it.
This marketing theory holds that companies must employ specific techniques to persuade prospective buyers to buy a particular product. Promotion techniques founded on this marketing concept include Black Friday, Emails, or Phone calls offering special discounts or offers, etc.
Holidays like Halloween and Mother’s/ Father’s Day also evolved to generate a need to buy cards, gifts, and products to serve these holidays. Hence a new need was created.
4. Marketing concept
Marketing concept believes every business is founded on the needs of its audience. Before a company can develop a product or a service, it must research what its potential customers want.
Or else there would be no product. That's because this company sees prospective buyers as the market or life of their business. The phrase "Customer is King" is highly exalted by this marketing concept.
That's why freelancers building small and agile online businesses apply this marketing concept. They aim to create something better than their competitors through thorough findings of the needs of their ideal customers.
5. Societal Marketing Concept
You see how marketing has evolved from the "production concept" to the "product concept," "selling concept," and "marketing concept.", and now we have the "societal marketing concept."
This marketing idea works when a company aims to meet customers' needs and reach its goals without harming society. It's about doing business responsibly while making customers and the company happy. So, it's like hitting two birds with one stone—satisfying customers and achieving company goals, all while being mindful of society's safety.
Do Companies Still Use the Production Concept Today?
As the oldest marketing concept, the Marketing Tutor stated that the production concept remains valuable for businesses in two cases.
The first case for its application is when there's more demand for a product than supply. In this situation, management should determine how to make more of it.
Imagine a small bakery that suddenly gains popularity because everyone loves its cookies. However, due to its small oven, it only baked a limited amount daily.
In this case, the bakery should increase production by investing in a larger oven or hiring more staff to meet the high demand for their cookies.
The second scenario occurs when the product's cost per unit is too high. In this situation, management should make production more efficient to lower costs.
For example, let's say a company manufactures smartphones, but the cost to produce each phone is relatively high. As a result, there's a challenge to sell them at an affordable price.
Thus, to address this issue, the company might focus on improving its production process to become more efficient and reduce the cost per unit. That could involve using new technology or streamlining its manufacturing process.
In both scenarios, you'll realize that the production concept emphasizes meeting demand and controlling costs to ensure the business's success.
That said, you must note that we are in an era when companies make intelligent marketing decisions by considering these:
- What consumers want,
- What the company can do, and
- What's good for society in the long run
Interestingly, this marketing approach can be called a societal marketing concept. It highlights companies' responsibility toward society. As said above, it's about meeting customers' needs while also considering how marketing decisions affect the environment for future generations.
Practical Examples of Production Concept (in big brands)
You may not know it, but some big companies or brands you love are practical proofs of the production concept as a marketing theory. That's because their approach to marketing and production focuses on large-volume output and low costs or prices.
These business organizations include:
Wal-Mart
You may have shopped at Wal-Mart, which follows a typical production marketing concept. Their primary goal is to keep costs low while ensuring smooth operations. This way, Wal-Mart ensures customers get products at reasonable prices. They do this and ensure everything runs effectively by managing various inventories with suppliers.
Amazon
Another excellent example of a production concept in business is Amazon. Although it doesn't make most of the items it sells (except for Kindles), Amazon works closely with many suppliers. And through these sellers, they ensure everything is made and sent out quickly to customers at affordable prices.
McDonald's
McDonald's is known for its quick delivery of food. When they talk about their food, they say it's cheap, easy to get, and always the same. In other words, McDonald's is a practical example of a production concept. That's because their customers get their food fast at affordable prices while it tastes as expected. For example, McDonald's uses an assembly line in its kitchen. Each part has its job, like cooking burgers or putting together sandwiches, to make things fast.
Toyota
As an example of a production concept, Toyota manufactures its cars in a way that eliminates waste and achieves peak efficiency. They do this with a system they call lean manufacturing, also known as the "Just-In-Time" system. Essentially, Toyota wants its cars to be good quality but not too expensive. To that end, this production pattern is rooted in the production concept as a marketing philosophy.
Coca-Cola
Coca-Cola is a worldwide brand in the drink industry. With giant machines, it creates, sells, and distributes its drinks quickly. This is possible because they constantly improve their production and delivery to ensure that drinks get to their customers rapidly.
Remember that companies with a production concept business model focus on cost savings and satisfying customers with readily available products. However, note that for a successful marketing campaign or business operation, companies need to understand all the different concepts of marketing we've looked at.
by 
by 
by 
by 
by