2. Goals of 6.2
Differentiate the six types of businesses.
Describe the five functions of business.
Discuss how the five functions of business relate to each other.

3. Types and Functions of Businesses
Types of Businesses
Functions of Businesses
Producers
Processors
Manufactures
Intermediaries and Wholesalers
Retailers and Service Businesses
Production and Procurement
Marketing
Management
Finance and Accounting

4. Types of Businesses - Producers
A producer may be found in industries such as agriculture, mining, fishing, or forestry.
producer
a business that gathers raw goods.
Raw goods are materials gathered from their original state from natural resources.

5. Types of Businesses - Processor
A processor may, for example, turn crude oil into gasoline.
Processed goods are made from raw goods that require further processing.
processor
a business that changes raw materials into more finished products

6. Types of Businesses - Manufacturers
Cars, CDs, and computers are examples of goods that are made by a manufacturer.
manufacturer
a business that makes finished products out of processed goods

7. Types of Businesses - Intermediaries
An intermediary buys goods, stores them, and then resells them.
intermediary
a business that moves goods from one business to another

8. Types of Businesses - Wholesalers
A wholesaler of clothing may buy thousands of jackets from several manufacturers, divide the large quantities into smaller ones, and sell them to retailers.
wholesaler
a business that moves large amounts of goods from one business to another
Is a type of an intermediary.

9. Types of Businesses - Retailers
A grocery store is an example of a retailer.
retailer
a business that purchases goods from a wholesaler and sells them to consumers, the final buyers of the goods

10. Types of Businesses – Service
Service businesses perform tasks rather than provide goods.
Some service businesses meet needs such as medical clinics and law firms. Others provide conveniences such as taxi companies, nail salons.
Service businesses employ about three-quarters of the workforce and are rapidly increasing in numbers.

11. Functions of Business
The five main functions of business that are involved in the operation of ALL types of businesses are:
Production and procurement
Marketing
Management
Finance
Accounting

12. Functions of Business: Production and Procurement
Production and procurement are closely related functions of business.
Retailers procure goods from producers for resale.
Wholesalers buy goods from producers to resell to retailers and other wholesalers.
production
the process of creating, expanding, manufacturing, or improving goods and services
procurement
the buying and reselling of goods and services that have already been produced

13. Functions of Business: Marketing
Marketing involves getting consumers to buy a product or service.
Marketers make decisions based on market research of trends and consumer habits.
marketing
the process of planning, pricing, promoting, selling, and distributing ideas, goods, and services

14. To Advertise or Not
Advertising is used to influence consumers to buy one product or service over another.

15. Functions of Business: Management
Management is an important function of business.
management
the process of achieving company goals by planning, organizing, directing, controlling, and evaluating the effective use of resources

16. Functions of Business: Finance
Finance requires analyzing financial statements to make future decisions.
finance
the business or art of money management

17. Functions of Business: Accounting
Accounting requires attention to detail and accuracy.
accounting
maintaining and checking records, handling bills, and preparing financial reports for a business

18. How the Functions of Business Are Interdependent
The functional areas of a business depend on each other.
Sometimes, the functional areas of a business conflict with each other.

19. Example of How Functional Areas Depend on Each Other
A furniture maker’s sales are decreasing.
The accounting and finance department notice decreasing sales.
If the furniture is too highly priced, more efficient procedures will have to be implemented.
A new marketing plan is created.
The accounting and finance department will monitor the effects of new marketing efforts.

20. Example of How Functional Areas Conflict with Each Other
Management wants to increase sales by 20 percent within three years.
The production department suggests improving quality.
The marketing department requests more funds for projects.
Accounting says there is not enough money for either plan.
The final plan involves ideas from all the functions of business.

21. End of