CHAPTER 1 BUSINESS AND YOU

NEEDS & WANTS  NEEDS —food, clothing, shelter (basics have to be satisfied before any others)  WANTS —nice to have (as more goods and services are acquired….”wants will become needs.” Decisions have to be made as to whether wants should be satisfied. Needs and wants differ from person to person. Peoples' wants are often endless, even for those to have everything. Over time, wants become needs.

NEEDS & WANTS cont’d Need—for transportation Need—for transportation Options:walking, bicycle, car Options:walking, bicycle, car Want—car (any car that will get you from point A to B) Want—car (any car that will get you from point A to B) Luxury Want—a specific car such as a BMW, Benz, etc. Luxury Want—a specific car such as a BMW, Benz, etc.

Basic Survival Tactic #1— Ability to Adapt Fast food restaurants: Wendy’s, McDonald’s, and Burger King had to adapt to remain competitive, profitable, and most significantly, to stay in business. These fast food establishments now have extended their menus to include more variety and healthier food choices. Fast food restaurants: Wendy’s, McDonald’s, and Burger King had to adapt to remain competitive, profitable, and most significantly, to stay in business. These fast food establishments now have extended their menus to include more variety and healthier food choices.

GOODS & SERVICES GOODS —monetary value, have been produced SERVICES — both are valuable SERVICES — both are valuable a. Monetary value (car repair, salon treatments, etc.) a. Monetary value (car repair, salon treatments, etc.) b. No monetary value (volunteers in hospitals, firefighters, etc) b. No monetary value (volunteers in hospitals, firefighters, etc) Non-profit organization or charitable Organization—provide services, but not for profit Non-profit organization or charitable Organization—provide services, but not for profit

Business Survival Tactic #2—Risk Taking (Sometimes necessary, but not always a smart business move) (Sometimes necessary, but not always a smart business move)  Coca Cola—introduced new formula  Coca Cola—introduced new formula Result—the new product was not received well by coke consumers; therefore, a new product is not always better than a familiar established product. Result—the new product was not received well by coke consumers; therefore, a new product is not always better than a familiar established product.  Outcome—Customers demanded original formula, which was reintroduced as Coke Classic  Outcome—Customers demanded original formula, which was reintroduced as Coke Classic

Basic Survival Tactic #3— Innovation Automated devices provide more convenience for consumers, i.e., automated banking machines—ATMs Automated devices provide more convenience for consumers, i.e., automated banking machines—ATMs Entrepreneur —looks at consumer wants and needs and devises innovative goods or services to meet them. Entrepreneur —looks at consumer wants and needs and devises innovative goods or services to meet them. Obsolete —people no longer want the goods and /or services, i.e., black/white television; 8-track tapes, stage coaches, steam-powered trains, etc. Obsolete —people no longer want the goods and /or services, i.e., black/white television; 8-track tapes, stage coaches, steam-powered trains, etc.

Business Survival Tactic #4— Ability to Keep Learning Many of today’s consumers are “Health Conscious Consumers”— They read labels and look for goods and services that are “environmentally friendly.” Many of today’s consumers are “Health Conscious Consumers”— They read labels and look for goods and services that are “environmentally friendly.” In order to survive, businesses have to pay attention to consumers and meet their needs and wants. In order to survive, businesses have to pay attention to consumers and meet their needs and wants.

BUSINESS NEEDS CONSUMERS and CONSUMERS NEED BUSINESS Interdependent —co-operation is necessary; we buy goods and services from many businesses; for example, a clothing manufacturer has to purchase all the goods and services to produce the final product—clothing Some of the goods and services needed in a clothing manufacturing business would be: (cont’d on next slide) Interdependent —co-operation is necessary; we buy goods and services from many businesses; for example, a clothing manufacturer has to purchase all the goods and services to produce the final product—clothing Some of the goods and services needed in a clothing manufacturing business would be: (cont’d on next slide)

WHAT BUSINESS NEEDS… Raw materials—cotton, wool, linen, synthetics, etc. Raw materials—cotton, wool, linen, synthetics, etc. Machinery—cutting, sewing, and packing Machinery—cutting, sewing, and packing Trucks—transporting the finished goods Trucks—transporting the finished goods Office supplies—accounting records, computers, telephones, etc. for keeping track of the business dealings and for contacting suppliers, customers, etc. Office supplies—accounting records, computers, telephones, etc. for keeping track of the business dealings and for contacting suppliers, customers, etc. Employees—to make the goods, sort, package, ship, deliver Employees—to make the goods, sort, package, ship, deliver Services—for repair of equipment, cleaning the machines and building, banking, delivery, etc. Services—for repair of equipment, cleaning the machines and building, banking, delivery, etc.

ESSENTIAL & LUXURY Essential goods—food, clothing, shelter Essential goods—food, clothing, shelter Essential services—medical, dental, religious, water, heat, lighting, transportation Essential services—medical, dental, religious, water, heat, lighting, transportation Luxury goods—television, radios, cars, showers, flush toilets, cameras, magazines, movies, hot tubs, pools Luxury goods—television, radios, cars, showers, flush toilets, cameras, magazines, movies, hot tubs, pools Luxury services—salon treatments, plastic surgery, limo service, air conditioning, fine dining, concert tickets Luxury services—salon treatments, plastic surgery, limo service, air conditioning, fine dining, concert tickets

Supply of Product or Service — affected by cost and the price people will pay If the demand is great and the supply is low, the price will go up i.e., gas prices during war time; If the demand is great and the supply is low, the price will go up i.e., gas prices during war time; If the supply is great and the demand is low, prices will go down i.e., markdowns and selloffs (after 911, airline prices were greatly discounted because people were scared of flying; some airlines even went bankrupt or had to merge to survive) If the supply is great and the demand is low, prices will go down i.e., markdowns and selloffs (after 911, airline prices were greatly discounted because people were scared of flying; some airlines even went bankrupt or had to merge to survive)

GOALS OF BUSINESS Profit — Profit —  reward business owner receives for taking a risk Breaking Even — Breaking Even —  no profit, no loss

Definition of a Business By its type of ownership By its type of ownership By the goods produced and services offered By the goods produced and services offered The types of jobs provided The types of jobs provided The different functions it performs in the community The different functions it performs in the community

Producer & Consumer A computer manufacturer is an example of a producer of a product, while a computer repair shop is an example of a provider of a service. A computer manufacturer is an example of a producer of a product, while a computer repair shop is an example of a provider of a service. The people who buy the computers, along with the ones who have these computers serviced at computer repair shops, are known as consumers. The people who buy the computers, along with the ones who have these computers serviced at computer repair shops, are known as consumers.