| A | B |
|---|
| Four Kinds of Businesses | Extractors, Manufacturers, Marketers, Service Business |
| Extractors | Businesses that grow products or take raw materials from nature |
| Manufacturers | Business that takes the extractors product or a raw material and changes it into a form that consumers can use |
| Marketers | Involved with moving goods from producers to consumers |
| Service Businesses | Business that does something for you |
| Fastest growing businesses in the U.S. economy | Service Businesses |
| Business Functions | Find Ideas, Raise Capital, Use human resources, Buy, market, and produce goods and services, Keep records |
| Sole Proprietorship | Business owned by one person |
| Partnership | Owned and managed by a small group, often not more than two or three people |
| Corporation | People this by buying shares of stock |
| Personally liable for debt | Sole proprietorship and partnership |
| Debt exists separately from owner | Corporation |
| Franchise | Written contract granting permission to sell someone else’s product or service |
| Cooperative | Business owned by the members it serves and is managed in their interests |
| Non-profit corporation | Earning a profit is not the primary goal |
| Functions of Management | Planning, Organizing, Leading, Staffing, Controlling |
| Planning | Processing of making goals for business |
| Organizing | Process of determining what work has to be done and who is to do each job |
| Staffing | Includes activities involved in finding, selecting, hiring, training, evaluating, and rewarding employees |
| Leading | Managers must direct the employees so that they will perform their work tasks correctly and in a timely manner |
| Controlling | Measure whether goals created during planning phase are met or not |
| Marketing concept | Business should consider the needs of customers when planning, pricing, distributing and promoting the product or service |
| Target Market | A group of individuals or businesses that have similar product needs |
| Marketing Mix | Product, Promotion, Place, Price |
| Product | The product or service offered to the target market to satisfy needs for goods and services |
| Promotion | Advertising and other methods used to communicate the benefits of the product or service to potential customers |
| Place | Getting the product or service to potential customers |
| Direct channel | Brings the product directly from the producer to the consumer |
| Indirect channel | One or more businesses conduct business in between producer and consumer |
| Wholesaler | buys large quantities of a product and breaks it down into smaller quantities that are suitable for consumers |
| Retailer | gets products from wholesalers, displays them, and makes it convenient to shop and make purchases directly to consumer |
| Price | What you pay for goods and services |
| Markup | The amount businesses add to the cost of producing a product |
| Businesses have several goals when setting prices | Cover their costs, Generate a profit, Have price that consumers will view as a good value, Have a competitive price |
| Formula to calculate markup | Selling price – Cost |
| Formula to calculate markup rate | Markup divided by selling price |
