1. BBI 2O Name:

2. Stew Leonard’s Rules on the Customer : Rule #1: The customer is always right Rule #2: If the customer is wrong, re-read Rule #1.

3. 1. The general direction in which something tends to move. 2. the popular taste at a given time; "leather is the latest trend"; "he followed current trends"; "the 1980s had a style of their own" Take a moment and think about some new trends created by consumers and their related products. List these trends below: -Upgrading your phone -Car accessories -Bluetooth headphones -Tablets -Fashion Consumers play a vital role in the marketplace. They also have the ability to create trends that will influence producers on what to produce. When studying the consumer you will hear the word TREND many times. What do you think this word means? A trend is a popular pattern. How much power do you think a consumer has in the marketplace? Explain your answer. The consumer has a lot of power. The market listens to the needs and wants of the consumer and does its best to satisfy these desires in order to maximize the gross domestic product and the gross domestic supply. This is called supply and demand.

4. Producer #1: uses information to make products that consumers say they need or want. Producer #2: uses information to make products that consumers say they need or want. Marketing Research Companies: gather information for businesses. Marketplace Producers: place their products in the marketplace where consumers decide which product they want to buy. Consumers: provide marketing research firms with information regarding their needs and wants. Consumers: decide in the marketplace on the product that best meets their needs and wants (product, price, and service).

5.  Purchasing Power: When consumers are in control of where they buy their goods and services, and how much they will pay for them. What happens if a business does not give you the prices you want on goods and services you use? You shop elsewhere – research opportunities via the Internet, flyers or word of mouth.

6.  Pricing Power: When businesses are in control and can charge high prices and raise prices when costs go up. One way of exploring this concept is examining the luxury goods market with the following video: https://www.youtube.com/watch?v=-g9mMeQDqC4

7. Using the video as a guide; use your own words to define the following terms. Then respond to the questions below: Counterfeit: Knockoff: Have you ever seen counterfeit or knock off goods for sale? Where? Counterfeit goods are sold by some street vendors, flea markets, market stalls in foreign countries, and the Internet. Have you ever purchased or thought about purchasing a counterfeit good before? Explain why or why not. Most people think about purchasing counterfeit goods. Examples are Versace jeans, Levi jeans and Quiksilver accessories. What people do not realize is that it harms trade and may fund drug trafficking and terrorism.

8. Think of major gift giving seasons such as Christmas. Some consumers will wait for the season to end for sales on specific items, for example - gift wrap. This behaviour can have bad effects for manufacturers because this reduces demand for the items in the following year. The everyday low-price strategy of retailers, such as Wal-Mart, is an attempt to break the consumer’s reliance on and expectation of a sale price.

9. Complete the following questions after you have completed the reading: 1. Do you agree with the two rules for dealing with customers? Give a reason to support your opinion. Yes, because as a business owner, you do not want to lose the customer’s future business. It may be worth absorbing a loss if a refund is demanded, as the customer will probably return to spend more money in your store. If the consumer is not happy with the service, they may damage your business reputation by writing poor reviews or speaking negatively. 2. How can consumers influence what businesses produce? Consumers can influence what businesses produce through market research surveys, not buy the product, or buy more of a product. Read pages 10 to 14 in The World of Business

10. Complete the following questions after you have completed the reading: 3. Provide an example of an obsolete good or service (one not already used in your readings). Have DVD players made VCR players obsolete? Are digital cameras making film cameras obsolete? Explain. Vynyl records and players were replaced by the tape cassette player and the cd player, which in turn were replaced by MP3, which was replaced by SD cards and bluetooth technology. The blackboard was replaced by whiteboards and smartboards. 4. Why is competition good for both consumers and businesses? Competition is good for consumers because it keeps the product purchase price down. Competition is good for businesses because it keeps their customers coming back!