Production Concept is the oldest of the concepts in business. It holds that consumers will prefer products that are widely available and inexpensive. In order to achieve desired exchange outcomes with target markets, it is vital to decide what philosophy or thinking should guide the marketing efforts of an organization. Managers focusing on this perception deliberate on achieving high production effectiveness, low costs, and mass allotment.
During the earlier days of the industrial revolution, the demand for industrial goods started picking up but the number of producers was limited. As a result, the demand exceeded the supply. Selling was no problem.
Anybody who could produce the goods was able to sell. The focus of business activities was, therefore, on the production of goods. It was believed that profits could be maximised by producing at large scale, thereby reducing the average cost of production. It was also assumed that consumers would favour those products which were widely available at an affordable price.
Thus, availability and affordability of the product were considered to be the key to the success of a firm. Therefore, greater emphasis was placed on improving the production and distribution efficiency of the firms.
The utility of this philosophy is apparent only when demand exceeds supply. Its greatest drawback is that it is not always necessary that the customer every time purchases the cheap and easily available goods or services.