The Role of the Consumer Entrepreneurship 3209 The Role of the Consumer

The Role of the Consumer Most businesses provide goods & services designed to satisfy consumer needs & wants Producers are the businesses that make goods or provide services that consumers need or want. Consumers are the people who purchase goods and services from producers. Companies that can attract more consumers to their business will have more opportunity to generate sales & increase profit

The Role of the Consumer A marketplace or location is where producers and consumers come together to buy and sell their goods and services What are some examples of marketplaces?

Mall Farmers Market Restaurant

Food truck Ebay Business Internet Site

The Role of the Consumer Businesses use consumer habits plus their own research to decide what quantities of goods and services they will provide to consumers. Some key questions that businesses might ask about themselves are: When do they want these goods and services? Where do they want them? How much goods or services do they want? What price will they pay for these goods & services?

The Role of the Consumer Stew Leonard’s, a chain of American supermarkets, has this message etched in stone in front of each store Do you agree that businesses really function this way? Can you suggest businesses that do not follow these rules?

The Role of the Consumer In today’s business climate, the consumer plays a vital role in influencing what businesses produce & how they deliver their products & services Consumer influence on products Consumer influence on price Consumer influence on service

Consumer Influence on Products In the past, businesses controlled what, when, and the amount of products and services available to consumers. Automaker Henry Ford is quoted as saying “People can have the model T in any colour ---- so long as it is black”

Consumer Influence on Products With increased competition and the appearance of more producers, consumers ultimately buy from businesses that meet their personal needs and wants. This shift from businesses controlling the marketplace to consumers having more influence took place in the 1950s & has continued since that time

Consumer Influence on Products Over time, products or services can become obsolete because people no longer want them or new and improved products have replaced them.

Consumer Influence on Products Services can also become obsolete In early 1900s, all street lamps were gaslights Each night, a lamplighter would light each light by hand Coal & ice were delivered to homes so that people could heat theirs homes & keep their food cold

Consumer Influence on Price Businesses are in control when they have pricing power. When businesses are in control and can charge high prices and raise prices when costs go up Consumers have control when they have power.

Consumer Influence on Price Today’s consumers want access to a wide variety of cheap, reliable goods and services What happens if businesses do not give them the services they want? They demonstrate this by “voting with their feet” to look elsewhere for products and services.

Consumer Influence on Service Competition in business has given power to the consumer Consumer purchasing power gives individuals the control to buy goods and services at the price they want and the location they like

Consumer Influence on Service This power influences the products, prices, and service levels that businesses offer consumers. DVDs are a good example Specialty stores Department stores Online rentals Netflix On Demand An increasing range of choice for consumers encourages businesses to continually improve their services to compete for consumer dollars.