Marketing Management 3(2+1)

Lesson 05 : The Marketing Concepts

The Production Concept

• This is the oldest concept in business, developed with a thought that consumers will favor those products that are widely available and are low in cost.
• This concept prevailed from the time of the industrial revolution until the late 1920's.
• Managers concentrated on achieving high production efficiency and wide distribution of their products.
• Managers organized the marketing activity in simple fashion who were unaware about the advertising, marketing research, and sales analysis.
• The limitation is that the managers would develop a narrow thinking and forget about customer satisfaction. The quality may also become an issue if it starts to decline.
• The sales manager was responsible for the sales in sales department and production planning and sales budgeting were handled in other departments
• It fails in serving consumers in the right philosophy of an enterprise.
• In the later stage of this concept, expanding markets encouraged manufacturer to have specialized marketing activities with separate divisions each assigned to separate executive.
• The company’s product was sold through ‘sales department’ with the chief executive heading the department called as sales manager or vice president of sales.