Chapter 05 Section 5 1.ppt

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 Chapter 5 Business and Social Responsibility

Section 5.1 Defining Business

Marketing Essentials

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Chapter 5  Business and Social Responsibility 2

SECTION 5.1

What You'll Learn

 _{What is business?}

 _{The basic functions of a business}

 _{How to distinguish businesses from each} other based on general characteristics

 _{The importance of e-commerce}  _{The concept of derived demand}

 _{The six major types of business that} comprise the industrial market

Defining Business

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SECTION 5.1

Defining Business

Why It's Important

Why It's Important

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SECTION 5.1

Defining Business

Key Terms Key Terms  _business  _production  _marketplace  _management  _finance

 _{nonprofit organizations}

 _{public sector}

 _{private sector}

 _e-commerce

 _{industrial market}

 _{derived demand}

 _wholesalers

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SECTION 5.1

Defining Business

Business is all of the activities involved in

producing and marketing goods and services.

Business has two primary functions: The Functions of Business

 _{Production of goods and services}

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SECTION 5.1

Defining Business

The Functions of Business

Production

is the process of creating,

growing, manufacturing, or improving on goods and services.

Slide 2 of 2

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SECTION 5.1

Defining Business

Management

is the process of achieving

company goals (or running the business) by effectively using resources through

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SECTION 5.1

Defining Business

Finance

has several meanings in business. It can mean money or anything that can be sold very quickly to get money.

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SECTION 5.1

Defining Business

Businesses can be categorized in the following ways:

Types of Businesses

 _{By size}

 _{By profit orientation}

 _{By market served}

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SECTION 5.1

Defining Business by Size

•A small business is generally operated by only one or a few individuals

•Has less than 100 employees.

• About 95 percent of U.S. businesses are classified as small.

Large vs. Small

A

large business

generally employs over 1,000 people,is usually national or global,

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SECTION 5.1

Defining Business by where

they do business

Defining Business by where

they do business

Domestic business means doing business within a single country.

Domestic vs. Global

Global business means doing business among nations. The Internet makes global business easier. Domestic

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SECTION 5.1

Defining Business by

profit structure

Defining Business by

profit structure

Although profit is the

motivating factor in starting most businesses, this is not always the case.

Nonprofit

organizations

are not operated for the

purpose of making a profit. All profit goes to the

organization’s charitable cause.

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SECTION 5.1

Defining Business

Public sector agencies include local, state, and federal government agencies and

services. They are

not

intended to make a profit. They purchase one-third of goods and services in the U.S.

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SECTION 5.1

Defining Business by what

they sell

Defining Business by what

they sell

Businesses provide either goods such as the bread sold in the supermarket, or services like dry cleaning or security.

Goods or Services



Business services

_{include financial}

planning, insurance, real estate, transportation.



Professional services

_{include lawyers,}

doctors, and dentists.



Information services

_{include newspapers}

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SECTION 5.1

Defining Business by

what market they serve

Defining Business by

what market they serve

Consumer products satisfy our own needs and wants. The industrial market is business-to-business.

Consumer vs. Industrial

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SECTION 5.1

Defining Business

Wholesalers obtain goods from manufacturers and resell them to industrial users, other wholesalers, and retailers. Wholesalers are also called distributors.

Types of Businesses

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Wholesalers versus Retailers

Retailers

Sell 1-2 items to individuals

Individuals purchase for personal use

Wholesalers

Sell 50-100 items to other businesses

or retailers

Purchased usually for resell purposes

Manufactures

Sell 500 to 10,000 items to

Wholesalers or Large Retailers

Sells partial to full truck loads

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5.1

Graphic Organizer

Business Classifications

Industrial Goods

Profit Global

Large

Private Consumer

Services

Non-Profit Domestic

Small

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SECTION 5.1

Defining Business

E-commerce allows consumers to buy products over the Internet without ever setting foot in an actual store.

Traditional retailers are adapting their marketing to e-commerce. This is

E-commerce

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5.1

A

SSESSMENTSSESSMENT

Reviewing Key Terms and Concepts

1. What is a business?

2. What are the two primary functions of business?

3. List four ways that businesses can be categorized.

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5.1

A

SSESSMENTSSESSMENT

Thinking Critically

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Last year, 3M and the 3M Foundation contributed more than $48 million to

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End of Section 5.1