Transcript Chapter 2 – Business in the U.S. Economy

LESSON 2.1
BUSINESS ACTIVITIES
GOALS
 Identify the four kinds of businesses
 Describe each of the seven business
functions
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Kinds of Businesses
 Extractors
 Businesses that grow products or take raw materials from
nature.
 Farmers in Wisconsin
 Copper miners in Montana
 Oil companies in Texas
 Manufacturers
 Businesses that take the extractor’s product or a raw
material and changes it into a form that consumers cans
use.
 Also referred to as producers.
 Can produce final product or be part of a chain of
manufacturing processes
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Kinds of Businesses
 Marketers
 Businesses that are involved with moving goods from
producers to consumers.
 Transports and sells products
 Package goods to protect products and present them in attractive and
convenient sizes.
 Store goods until they are needed by other marketers or consumers.
 Marketers add value to products
 Service Businesses
 Businesses that do things for you instead of making or
marketing something.
 Respond to needs and wants of a consumer or other business.
 Travel Agent
 Information Systems company
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Business Functions
 Find Ideas
 Idea for a good service that will meet consumers’
needs and wants
 Raise Capital
 Personal funds, loans from financial institutions,
loans from individual investors.
 Whey do businesses need capital?
 Buy Goods and Services
 Products – clothing store (clothes, register, display
case, etc.)
 Services – web design, advertising space, etc.
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Business Functions
 Use Human Resources
 Recruiting, interviewing, and selecting employees
 Market Goods and Services
 Designing and developing products/services
based on needs and wants
 Produce Goods and Services
 Product/service must be produced at the desired
time, in the appropriate quantity and quality, and
at a competitive cost.
 Keep Records
 How much has sold, been returned, or owed.
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LESSON 2.2
BUSINESS OWNERSHIP
GOALS
 Describe the types of business ownership
and the specialized forms of business
 Identify each of the five business
management activities
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Types of Business Ownership
 Sole Proprietorship
 Owned by one person
 Keeps profit, but is liable for all debts.
 Partnership
 Owned by a small group (2-3 people)
 Share profits
 Unlimited liability for all debts
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Types of Business Ownership
 Corporation
 Owned by a number of people and
operates under special permission
from the state that charters it.
Certificate of incorporation.
Shareholders or Stockholders
Elect a board of directors.
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Types of Business Ownership
 Specialized Forms of Ownership
 Franchises
 A written contract granting permission to sell someone
else’s product or service.
 Specifies the manner, time period, and territory
 Cooperatives
 Owned by the members it serves and is manages in the
interests.
 Consumers’ cooperative and producers’ cooperative
 Non-Profit Corporations
 Provide a service, and earning a profit is not their primary
goal.
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U.S. Business Ownership
Millions of Businesses
16
15.8
14
12
10
8
6
3.8
4
1.5
2
0
Sole Proprietorships
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Corporations
Partnerships
Management Activities
 Plan
 Organize
 Staff
 Lead
 Control
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LESSON 2.3
EFFECTIVE MARKETING
GOALS
 Explain the marketing concept and the
steps in setting marketing strategy
 Identify the four elements of the
marketing mix
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Marketing Strategy
 Marketing Concept
 Considering the needs of customers
when planning, pricing, distributing,
and promoting their product or
service.
 Effective marketing leads to
satisfying exchanges between
businesses and customers.
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Marketing Strategy
 Involves 2 steps:
 Marketers must decide whose wants
or needs the business will try to
satisfy.
 Develop a marketing mix
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Marketing Strategy
 Target Market
 A group of individuals or businesses
that have similar product needs.
 Marketing Concept
 A statement of what the marketing
activities will achieve.
 Must be clear, realistic, and refer to
desired consumer actions.
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Marketing Strategy
 Marketing Mix
 Product
 The product or service offered to the target market to
satisfy needs for goods and services.
 Place
 The function of getting the product or service to potential
customers.
 Channel of distribution
 Direct channel – brings the product to the consumer directly form
the producer.
 Indirect channel – has one or more businesses that conduct
business in between the producer and the consumer.


Wholesaler
Retailer
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Marketing Strategy
 Price
 What you pay for goods and services
 Consumers do not always decide to buy at the lowest
price, because a higher price may mean better quality.
 Markup
 How much is added to the cost of producing a product.
 Must cover shipping, handling, storing, displaying, selling, rent, and
taxes.
 Wholesalers and retailers markup the price that they pay for a
product so that they can earn a profit.
 Promotion
 Advertising and other methods used to communicate the
benefits of the product or service to potential customers.
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Functions of Marketing
 Product/Service Management
 Marketers assisting with the design and development of a
product or service by gathering information and testing ideas
related to a product or service.
 Distribution
 The steps taken to get the product or service to potential
customers in the most efficient manner.
 Selling
 Any communication with customers to assess their needs and
wants.
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Functions of Marketing
 Marketing-Information Management
 The gathering and using of customer information.
 Financing
 Budgeting to support the purchase of products and services
needed to produce and market the products or services it sells.
 Pricing
 Determining the prices and value of products and services to
potential customers.
 Promotion
 Finding ways to communicate with consumers and encourage
purchases of the goods and services being placed on the
market.
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