1. Chapter 5 Business and Social Responsibility1 Section 5.1 Defining Business Marketing Essentials

2. Chapter 5 Business and Social Responsibility2 SECTION 5.1 What You'll Learn  What a business is  The basic functions of a business  How to distinguish businesses from each other based on general characteristics  The importance of e-commerce  The concept of derived demand  The six major types of business that comprise the industrial market Defining Business

3. Chapter 5 Business and Social Responsibility3 SECTION 5.1 Defining Business Why It's Important Marketing is part of doing business. In order to understand the world of marketing, you will want to understand what's involved in doing business and some of the different types of businesses.

4. Chapter 5 Business and Social Responsibility4 SECTION 5.1 Defining Business Key Terms  business  production  marketplace  management  finance  nonprofit organizations  public sector  private sector  e-commerce  industrial market  derived demand  wholesalers  retailers

5. Chapter 5 Business and Social Responsibility5 SECTION 5.1 Defining Business Business has two primary functions: The Functions of Business  Production - is the process of creating, growing, manufacturing, or improving on goods and services.  Marketing - selling goods and services in the marketplace. The marketplace exists wherever a product is sold to a customer. Slide 1 of 2

6. Chapter 5 Business and Social Responsibility6 SECTION 5.1 Defining Business Management Management is the process of achieving company goals by effective use of resources through planning, organizing, and controlling.

7. Chapter 5 Business and Social Responsibility7 SECTION 5.1 Defining Business The word finance has several meanings in business. It can mean money or anything that can be sold very quickly to get money. It can also mean borrowing money and money management. Finance

8. Chapter 5 Business and Social Responsibility8 SECTION 5.1 Defining Business Businesses can be categorized in the following ways…. Types of Businesses

9. Chapter 5 Business and Social Responsibility9 SECTION 5.1 Defining Business A small business is generally operated by only one or a few individuals, and generally has less than 100 employees. About 95 percent of U.S. businesses are classified as small. A large business generally employs over 1,000 people, is usually national or global, and has many different departments. By size (1 of 4): Large vs. Small

10. Chapter 5 Business and Social Responsibility10 SECTION 5.1 Defining Business Domestic business means doing business within a single country. Global business means doing business among nations. The Internet makes global business easier. Domestic businesses face competition from foreign global businesses. By profit orientation (2 of 4): Domestic vs. Global

11. Chapter 5 Business and Social Responsibility11 SECTION 5.1 Defining Business Although profit is the motivating factor in starting most businesses, this is not always the case. Nonprofit organizations are not operated for the purpose of making a profit. All profit goes to the organization’s charitable cause. By market served (3 of 4): Profit vs. Nonprofit

12. Chapter 5 Business and Social Responsibility12 SECTION 5.1 Defining Business Public sector agencies include local, state, and federal government agencies and services. They are not intended to make a profit. They purchase one-third of goods and services in the U.S. Private sector businesses are not associated with government agencies. By kind of product provided (4 of 4): Public vs. Private

13. Chapter 5 Business and Social Responsibility13 5.1 Graphic Organizer Business Classifications Industrial Goods Profit Global Large Private Consumer Services Non-Profit Domestic Small Microsoft Metropolitan Opera Both

14. Chapter 5 Business and Social Responsibility14 SECTION 5.1 Defining Business Goods or Services  Business services include financial planning, insurance, real estate, transportation.  Professional services include lawyers, doctors, and dentists.  Information services include newspapers and magazines.

15. Chapter 5 Business and Social Responsibility15 SECTION 5.1 Defining Business Consumer products satisfy our own needs and wants. The industrial market is business-to-business. Industrial demand is derived from consumer demand. It is called derived demand. Consumer vs. Industrial

16. Chapter 5 Business and Social Responsibility16 SECTION 5.1 Defining Business Wholesalers obtain goods from manufacturers and resell them to industrial users, other wholesalers, and retailers. Wholesalers are also called distributors. Retailers buy goods from wholesalers or directly from manufacturers and resell them to the consumer. Types of Businesses

17. Chapter 5 Business and Social Responsibility17 SECTION 5.1 Defining Business E-commerce allows consumers to buy products over the Internet without ever setting foot in an actual store. Traditional retailers are adapting their marketing to e-commerce. This is called e-tailing. E-commerce

18. Chapter 5 Business and Social Responsibility18 5.1 A SSESSMENT Reviewing Key Terms and Concepts 1. What is a business? 2. What are the two primary functions of business? 3. List four ways that businesses can be categorized. 4. Discuss the significance of e-commerce.

19. Chapter 5 Business and Social Responsibility19 5.1 A SSESSMENT Thinking Critically Why would someone want to start a small business? Describe the success of a small business with which you are familiar.