Goodheart-Willcox Publisher | Marketing Dynamics | Chapter 2

1
(No Transcript)
2
Objectives

• Identify economic needs and wants.
• Describe the three uses of money.
• Explain how business satisfies economic needs.
• Describe the three forms of business ownership.

3
Objectives

• Describe the difference between a for-profit
  corporation and a nonprofit corporation.
• List the four functions of business and give an
  example of each.
• Explain the role of marketing in business.

4
Marketing Terms

• business
• profit
• sole proprietorship
• partnership
• corporation
• nonprofit corporation
• production
• finance
• management

• need
• want
• economic needs and wants
• economic goods and services
• exchange
• money
• value

5
Economic Needs and Wants

• Need
• necessary for survival
• Want
• something you would like, but you could survive
  without it

6
Economic Needs and Wants

• Economic needs and wants can be satisfied
• by buying something

What are some of your economic wants and needs?
7
Economic Needs and Wants

• The items you buyto satisfy economic needs and
  wants
• are economic goods and services

Name some economic goods and services.
8
Economic Needs and Wants

• Some needs and wants cannot be satisfied
• by buying something

What are some needs and wants that cannot be
satisfied by buying something?
9
The Exchange

• An exchange is a trade
• Exchanges are the basis of all business

Describe an exchange you made.
10
Money

• Money
• consistent item
• that people accept in exchange for goods or work

Describe American money. How is it consistent?
11
Money

• Without money
• modern business could not exist
• Money is used in three ways
• medium of exchange
• unit of value
• store of wealth

12
Medium of Exchange

• Money is a convenient medium of exchange
• Paper money and coins are easy to carry

13
Unit of Value

• Money can express
• the exact value of an item
• the dollar is the unit of value in the United
  States
• The value of a product
• expressed in dollars
• is the price
• Marketers use price
• to set the value of a product

14
Store of Wealth

• Money is easy to store
• You can save money until you need it

Why do people save money?
15
What Is Business?

• Business
• general term for activities
• involved in the development and exchange of
  products
• The term business also refers to
• a person or group of people
• involved in the development and exchange of
  products

16
What Is Business?

• Other terms for business
• firm, company, organization, corporation, and
  enterprise

Describe some businesses in your neighborhood.
17
What Is Business?

• Business powers the economy
• Money flows from businesses to workers
• then from the workers back to the businesses
• Business provides
• goods and services you use everyday
• wages (money) people use to buy goods and services

18
Money
Payment for goods and services
Workers
Business
Money
Payment of salary, wages, and profits
19
Goal of Business

• Businesses aim to make a profit.

-
Costs andExpenses
Sales
Profit
What is profit?
20
(No Transcript)
21
Forms of Business Ownership

• Sole proprietorship
• business owned by one person
• who gets all profits and bears all risks
• Partnership
• owned by small number of people, usually two or
  three
• who share profits and risks

22
What Is a Corporation?

• A corporation is
• a legal entity established for the purpose of
  doing business
• exists separate from the people who own it
• is owned by stockholders

23
What Is a Corporation?

• A corporation can
• buy property, manufacture products, earn money,
  lose money, sue, and be sued
• A corporation offers limited liability to its
  shareholders
• if a corporation is sued, the corporation pays
  damages from its income
• the shareholders (owners) do not pay

Name some corporations.
24
What Is a Nonprofit Corporation?

• There are two types of corporations
• for-profit
• nonprofit
• Goal of a for-profit corporation is to make a
  profit for its owners
• Goal of a nonprofit is to benefit society

25
What Is a Nonprofit Corporation?

• A nonprofit corporation
• is a legal entity, like a for-profit corporation
• is established to provide a benefit to society
• can make a profit, but . . .
• any profit that a nonprofit corporation earns
  goes back to support its cause or benefit
• Examples of benefits or causes
• charity, education, medical research, youth
  activities, religion, and the arts

26
What Is a Nonprofit Corporation?

• Examples
• DECA
• American Cancer Society
• Goodwill

• Name some other nonprofit corporations.

27
The Functions of Business

• Four functions of business
• production
• making products
• finance
• handling money
• marketing
• focusing on customers
• management
• planning, coordinating, monitoring

28
Production

• For goods, production includes
• farming
• mining
• construction
• manufacturing

29
Production

• For services, production is often the service
  itself
• Examples
• TV production
• hair styling

Describe production that you have seen.
30
Finance

• Finance includes
• planning and budgeting
• accounting
• paying bills
• receiving payments
• keeping track of transactions

31
Marketing

• Marketing helps the business focus on the
  customer
• Marketing includes
• selling
• promotion
• pricing
• learning about customers

32
Management

• Management includes
• planning
• coordinating
• monitoring
• supervising
• Managers look at the big picture and lead workers
  to make the business better

33
Review

• Explain the three uses of money.
• What are the three forms of business ownership?
• What are the four functions of business?
• What is the role of marketing in business?

34
Glossary

• business. General term for all the activities
  involved in the development and exchange of
  products. Also used to refer to a specific person
  or group of people who are involved in the
  development and exchange of products also called
  firm, company, organization, corporation, or
  enterprise.
• corporation. Legal entity established for the
  purpose of doing business.

35
Glossary

• economic goods and services. Products that you
  buy to satisfy economic needs.
• economic needs and wants. Needs and wants that
  you can satisfy by buying something.
• exchange. To trade something of value for
  something you want.
• finance. The function of business that includes
  all activities involving money.

36
Glossary

• management. The function of business that
  includes all the activities required to plan,
  coordinate, and monitor a business.
• money. A consistent item that people accept in
  exchange for goods or work.
• need. Something that is necessary for survival.

37
Glossary

• nonprofit corporation. Legal entity, like a
  for-profit corporation however, instead of
  profit, its main goal is to achieve something to
  benefit society also called nonprofit, nonprofit
  organization, or not-for-profit organization.
• partnership. Business owned by a small number of
  people, usually two or three.

38
Glossary

• production. Any activity related to making a
  product (good, service, or idea).
• profit. Money that a business has left after all
  the expenses and costs of running the business
  are paid.
• sole proprietorship. Business owned by one
  person.

39
Glossary

• value. How much something is worth.
• want. Something you desire but you could function
  without.