1. How Our Goods Are Produced and Marketed
Unit X
How Our Goods Are Produced and Marketed

2. GROSS NATIONAL PRODUCT (GNP) – the dollar value of all goods & services produced in the U.S. in a year.
ECONOMISTS – people who study the economy – they use the GNP to measure how the economy is doing.

3. I. The American System of Mass Production
MASS PRODUCTION – huge amounts of goods made rapidly by machines to supply the needs & wants of our large pop.
Eli Whitney – first to make mass production possible.
Eli signed a contract to make 10,000 muskets for the army in 1 year.

4. Eli Whitney

5. Methods of mass production
Use of MACHINE TOOLS – machines carefully built to turn out parts exactly the same
Use of STANDARD PARTS – parts that are exactly alike. Parts would fit all guns.
Use of DIVISION OF LABOR – each worker had 1 specific job to do in the construction of a gun.

6. Large Machines Require Great Power
For many years machines were powered by falling or moving water, which is why factories were built near rivers & streams.
James Watt, a Scottish Engineer, invented the steam engine. This became the main source of power through the 1800’s.
In the 1900’s a new source of power was invented such as the:
Combustion engine
Electricity

7. James Watt
19 Jan Aug. 1819
Steam Engine
The Internal Combustion Engine and Early Gas-Powered Car

8. Mass Production in an Automobile Factory
Auto plants the best example of mass production.
Engine block move down line
holes bored
pistons fitted
valves fitted
bolts attached
carburetors fastened

11. The Assembly Line
ASSEMBLY LINE – a CONVEYOR BELT moves car frames throughout the factory
The frame has many stops along the way
At each stop something is added
Engine, transmission, wheels, steering wheel, gears, seats, doors, paint job

12. After last stop it is driven to the test area
FEEDER LINE – a smaller assembly line whose finished product is added to the larger assembly line’s main product (car engine)
Items such as bread is made from assembly lines

13. Mass Production in the World
The U.S. was the 1st country to use mass production, but it has spread to other nations (Japan, Soviet Union)
But b/c the Soviet Union was a command economy it didn’t work well, since their was no incentive to work hard.
A free economy stimulates business people to take risks & work hard.

14. II. Marketing America’s Goods
Production is just a small part of our economy.
DISTRIBUTION – getting them to the people who want them.
There are 2 parts to distribution:
TRANSPORATION – getting goods from where they are made to where they are sold.
MARKETING – getting people to buy the goods.

15. Transporting America’s Goods
Transportation is important for a country so large.
Early America went through a long period of building roads, canals, & railroads.
R/R played a very important part for early industries sine railroads spread all throughout the country.

16. Railroad Transportation Today
Up until the mid 1900’s railroads are the chief method of transportation
But the development of cars, trucks, buses, & planes made it difficult for RR’s to compete
Our RR system needs to be modernized in order to become profitable

17. Our fastest train is 90 mph, in France its 230 mph
Trains are still needed to carry large bulk cargo (coal, grain)
1971 Amtrak was developed to carry passengers
Fastest train in France
TGV or Train ࠇrande Vitesse (“High-Speed Train”)
Amtrak

18. Air Transportation
In the area of passenger transportation the airlines have grown the fastest
1950 RR’s carried 6% of passengers, airlines 2%
1980’s RR’s carried less than 1%, airlines 10%
Airlines are one of the fastest & safest methods of traveling
They can also carry freight w/great speed

19. Our Highway System
The automobile is the leading means of transportation in the U.S.
86% of passengers are carried by cars
There is 3.8 million miles of roads in the U.S.
Some are toll roads
We have some limited access superhighways
Large trucks carry 60% of the freight
Problems include traffic jams, pollution, accidents, heavy use of oil cause prices of goods to go up

20. Mass Marketing MASS MARKETING – selling goods in large quantities
SUPERMARKET – huge store that sells hundreds of different kinds of products of almost every brand.
DEPARTMENT STORE – a large store that has many sections for selling different kinds of goods
SELF-SERVICE – many customers shop at the same time

21. STANDARD PACKAGING – goods from the factory already wrapped & packaged
STANDARD PACKAGING – goods from the factory already wrapped & packaged. Items don’t have to be weighed out or scooped out to be sold.
ONE-PRICE SYSTEM – selling price is stamped on every item to be sold, instead of bargaining.
Standard Packaging Example

22. Shopping Malls & Centers
SHOPPING MALLS & SHOPPING CENTERS is an outgrowth of the supermarkets. They are clusters of different stores all in one space.
An example of the mid-19th-century shopping mall

23. Chain Stores & Specialty Shops
CHAIN STORE – owned & operated by a company that has many of the same kinds of stores.
They get their products at lower prices because they buy large quantities
SPECIALTY SHOPS – they do not belong to chains & offer only certain kinds of goods or services. (men or women’s clothing, toys, books)
They usually offer special services not handled by the larger stores.

24. Wholesalers & Retailers
WHOLESALERS – buy directly from factories. They are sometimes called distributors. They link factories to stores but customers must pay for this service.
RETAILERS – buy from wholesalers & sell the product in a RETAIL STORE.
Large stores have their own warehouses, so there is no need for wholesalers.

25. Advertising
ADVERTISING – tells people about new products & tries to persuade them to buy it.
Advertising is very important to businesses who are competing w/each other.
National advertising makes it possible for goods to be advertised across the country.
BRAND NAME – product whose name is usually advertised & distributed over a large area.