Q.Explain the production concept and the marketing concept of business, bringing out the limitation of each.

These two concepts sit at opposite ends of marketing's evolution — one starts from what the firm can produce, the other starts from what the customer actually needs.

Production concept: this philosophy holds that customers will prefer products that are widely available and inexpensively priced, so the firm's task is to achieve high production efficiency, low unit cost, and wide distribution. It works reasonably well only in conditions where demand exceeds supply and customers have few alternative choices, so availability and price matter more to them than product variety.

Limitation of the production concept: once competition increases and customers have more choice, this concept fails, because it never actually asks what the customer wants — it only asks how to produce more, cheaply. A firm following it can end up efficiently producing a large quantity of something customers no longer particularly want.

Marketing concept: this philosophy reverses the starting point entirely — it holds that the key to achieving the firm's own goals (profit, growth) is to first determine the needs and wants of the target market, and then satisfy them more effectively than competitors do. Product, price, distribution, and promotion decisions all flow from this understanding of the customer, rather than from the firm's existing production capability.

Limitation of the marketing concept: genuinely knowing what customers need requires continuous, often expensive, market research, and demands that the whole organisation (not just the marketing department) stay oriented around the customer — a harder and more resource-intensive discipline to sustain than simply producing efficiently or selling aggressively.

Describing the marketing concept as simply "more advertising" — it is actually the opposite instinct: understanding and satisfying the customer's real need, of which advertising/promotion is only one downstream tool.