Production Concept is a belief that states that the customers would always acquire products which are cheaper and more readily available (or widely available). The production concept advocates that more the products or production, more would be the sales. In countries where labor is cheap and easily available, the production can be maximized while minimizing the costs, hence increasing the production efficiency.
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Production Concept is very important for an economy where certain commodities can be mass produced for consumers keeping the prices low. The supply is always high so shortage does not happen. Production concept is relevant in a new market which is not saturated with competition. More you produce, more customers you get. The market can still absorb more of the product and can earn profit but still keeping the prices low. It can help grow new categories in the market. Once the competition arrives then the focus can move away from the Production concept.
India and China are great examples of the Production Concept of marketing. China made sure that it increases its overall production through manual labor available by mass producing and distributing products across the world. Today China is one of the biggest exporter of its manufactured product across the globe. What China did in manufacturing, India did with information technology services by mass producing talent for IT. Today India is one of the biggest exporter of IT services.
The production concept can easily explain the above two examples. The production concept is one of the few orientations which a company has towards the market. Other being - The Product Concept, The Selling Concept, The Marketing Concept and the Holistic Marketing Concept.
Hence, this concludes the definition of Production Concept along with its overview.
This article has been researched & authored by the Business Concepts Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.
Browse the definition and meaning of more similar terms. The Management Dictionary covers over 2000 business concepts from 5 categories.
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