A production concept is the oldest of the concepts in business. Business concerned itself primarily with production, manufacturing, and efficiency issues. It holds that consumers will prefer products that are widely available and inexpensive. Managers focusing on this concept concentrate on achieving high production efficiency, low costs, and mass distribution. They assume that consumers are primarily interested in product availability and low prices. This orientation makes sense in developing countries, where consumers are more interested in obtaining the product than in its features. The basic proposition is that customers will choose products and services that are widely available and are of low cost. So business is mainly concerned with making as many units as possible. By concentrating on producing maximum volumes, such a business aims to maximize profitability by exploiting economies of scale. Managers try to achieve higher volume with low cost and intensive distribution strategy. This seems a viable strategy in a developing market where market expansion is the survival strategy for the business. Companies interested to take the benefit of scale economies purse this kind of orientation. In a production-orientated business, the needs of customers are secondary compared with the need to increase output. Such an approach is probably most effective when a business operates in very high growth markets or where the potential for economies of scale is significant. It is natural that the companies cannot deliver quality products and suffer from problems arising out of impersonal behavior with the customers. For example Maggi, Cintan and Indo-mee instant noodle products highly demanded by every household and these products are widely distributed in convenience stores, supermarkets, hypermarkets and even some retailing shops in Malaysia.
The product concept proposes that consumers will prefer products that have better quality, performance and features as opposed to a normal product. The concept is truly applicable in some niches such as electronics and mobile handsets. Two companies which stand apart from the crowd when we talk about the product concept are Apple and Samsung. Both of these companies have strived hard on their products and deliver us feature rich, innovative and diverse application products and people just love these brands. One problem which has been associated with the product concept is that it might also lead to marketing myopia. Thus companies need to take innovations and features seriously and provide only those which the customer needs. The customer needs should be given priority. On the other hand, innovating too soon becomes a problem. Several innovative products are marked as experimental in the market instead of being adopted as a result of which these products have less shelf life and might have to be taken off the market. Thus companies following the product concept need to concentrate on their technology such that they provide with excellent feature rich and innovative products for optimum customer satisfaction. 2. Discuss the element of social responsibility in the new marketplace landscape. (20 marks)
The social responsibility in the new marketplace landscape is every organization and individual responsibility. Every company should learn to balance the interest of the consumers, the company and the society in terms of long-term human welfare, while undertaking its marketing activities. It would be issues pertaining to environmental friendliness, health and safety, welfare of the society and general public are required to be incorporated into the organization’s goals and strategies. The first element would be environmental friendliness. As technology is progressing quickly, e-waste is piling up in our offices and homes, or worse, our landfills. According to the Environmental Protection Agency, over 200 million pieces of computer-related e-waste are being generated annually. Knowing the number...
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