The product concept is a universal business hypothesis that assumes that customers desire products that have better features, performance and quality than the products that are already on the market. The product concept is a company's driving force to create cutting-edge products that are superior to other similar products.
For example, computer companies use the product concept to consistently develop new hardware components and software programs that perform better than their competitors' offerings. Car manufacturers, clothing designers, cell phone companies and cosmetic companies are all good examples of companies who use the product concept to constantly create products that outshine comparable products already on store shelves.
While the product concept is a springboard for innovation, it also causes a false sense of security within companies. For example, if a car manufacturer comes up with a new gadget to install in its car line, the manufacturer might falsely believe that the buying public is in need of the new gadget. Using this line of thinking, the company might build its whole marketing plan around that one gadget only to find out that the customers who want and can afford the car are not at all impressed with the gadget. When this scenario is realized, marketing dollars are wasted and sales objectives are not met.