Production Concept Toward the Marketplace
The production concept is one of the oldest concepts in business.
The Production Concept holds that consumers will favor those products that are widely available and low in cost. Managers of production oriented organizations concentrate on achieving high production efficiency and wide distribution.
The assumption that consumers are primarily interested on product availability and low price holds in at least two situations.
The first is where the demand for a product exceeds supply, as in many developing countries. Here consumers are more interested in obtaining the product than in its fine points.
The supplier will concentrate in finding ways to increase production.
The second situation is where the product’s cost is high and has the decreased to expand the market.
Some service organizations also follow the production concept. Many medical and dental practices are organized in assembly line principles, as are some government agencies such as immigration offices and licenses bureaus.
While it results in handling many cases per hour, this management orientation is open to charges of impersonality and poor service quality.
Production Concept Toward the Marketplace
