Q.Distinguish between the product concept and production concept of marketing.
The production concept holds that consumers favour products that are widely available and affordable, so the firm concentrates on producing at large scale and cutting cost. The product concept holds that consumers favour products that are superior in quality, performance, and features, so the firm concentrates on continuous product improvement.
Both the production concept and the product concept are early philosophies in the evolution of marketing thought described in this CBSE Class 12 Business Studies chapter. They differ in what the firm believes is the key to success.
The Production Concept. This was the dominant thinking during the earlier days of the industrial revolution, when the demand for goods exceeded the limited supply and selling was no problem -- anyone who could produce goods was able to sell them. The focus of business activity was therefore on the production of goods. It was believed that profits could be maximised by producing at a large scale, which reduced the average cost of production, and it was assumed that consumers would favour products that were widely available and affordable. Thus availability and affordability of the product were seen as the keys to a firm's success, and greater emphasis was placed on improving production and distribution efficiency.
The Product Concept. As production capacity grew, supply increased over time, and mere availability and low price could no longer ensure increased sales. With more goods available, customers began to look for products that were superior in quality, performance, and features. The emphasis of firms therefore shifted from the quantity of production to the quality of the product. The focus of business activity changed to bringing about continuous improvement in quality and incorporating new features, so that product improvement became the key to profit maximisation under this concept.
Here is the essential contrast:
| Basis | Production Concept | Product Concept |
|---|---|---|
| Consumers favour | Products that are widely available and affordable | Products superior in quality, performance, and features |
| Focus of the firm | Large-scale production and distribution efficiency | Continuous product improvement |
| Key to profit | Availability and affordability (low cost, high volume) | Product quality |
| Typical setting | Demand exceeds supply; selling is easy | Supply has grown; customers seek quality |
The starting point differs. The production concept starts from the factory and asks how to make goods cheap and available; the product concept starts from the product and asks how to make it better in quality and features. Neither yet starts from the customer's needs -- that shift comes only with the later marketing concept.
The production concept assumes consumers prefer products that are widely available and affordable, so the firm focuses on large-scale, low-cost production. The product concept assumes consumers prefer products of superior quality, performance, and features, so the firm focuses on continuous product improvement.
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