- The production-oriented approach is a business philosophy that prioritizes maximizing production efficiency and minimizing costs. This approach is focused on producing goods on a large scale to achieve economies of scale and drive down costs.
- This approach was especially popular during the industrial revolution in Europe
- It is also popular with some Chinese manufacturing companies that make routine items like needles, plastic balls and pencils and sell them overseas to countries like Zimbabwe
- This is because there is little room for product differentiation and price is usually the most important thing
- It is less popular these days as competition has forced firms to try and differentiate their products from those of competitors
Features of Production-Oriented Approach:
- Production efficiency is the top priority.
- Emphasis on mass production and economies of scale.
- Focus on cost reduction through standardization and simplification of production processes.
- Limited product offerings with minimal variations.
- Minimal customization or personalization of products.
- Little to no market research to understand customer needs and preferences.
- Marketing and sales efforts are minimal.
- The goal is to produce as much as possible to meet demand.
- Limited innovation in product development.
- Little emphasis on customer satisfaction or building customer relationships.
Advantages/Benefits:
- Lower costs due to economies of scale and standardized production processes.
- Higher production efficiency and output due to streamlined processes and limited product variations.
- Reduced risk of overproduction and excess inventory.
- Easy to manage and control production processes.
- Easy to replicate and scale production processes.
Disadvantages:
- Limited product offerings can lead to decreased customer satisfaction.
- Minimal customization or personalization can limit customer loyalty.
- Minimal market research can result in products that do not meet customer needs or preferences.
- Limited innovation can make it difficult to keep up with changing market trends and consumer demands.
- Minimal marketing and sales efforts can result in low brand recognition and limited customer awareness.
