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Business & Marketing Essentials

Business & Marketing Foundations of Work-Based EducationA UGA Student Produced

Presentation

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OBJECTIVES

Define business & describe its

functions

List three managerial functions

Identify & discuss in detail the 3 major

business markets: consumer,

industrial, & global

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OBJECTIVES

Describe international trade & list its

advantages and disadvantages

Review areas of social responsibility

Define ethics & evaluate ethical

business behavior

Explore consumerism

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Business

All activities involved inproducing and marketing goods and services•Large vs Small

•Profit vs Nonprofit

•Goods vs Services

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Major Business Functions

Production• Creating, growing, manufacturing, or improving goods and services

Marketing• Selling products in the marketplace

Management• Achieving goals, allocating resources, providing sound financial planning, and maintaining accurate records

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Management Functions

Planning

Organizing

Controlling

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Major Business Markets

Consumer Market• Purchases made for personal use

Industrial Market• Business to business market• Purchases made for business use

Global Market• International trade• Exchange of goods and services between nations

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Consumer Market

AgeEthnic BackgroundIncomeGeographicsPsychographics

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Age

Whoopies

Baby boomers

Generation X

Baby Boomlet

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Ethnic Background

African-American

Hispanic

Asian-American

Caucasian

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Income

Disposable Income

Discretionary Income

Income levels

Socioeconomic levels

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Geographics

Metropolitan Statistical Areas• specially defined geographic areas• used by government to distribute federal aid• used by marketers to target consumers and

promotional campaigns

Geographic Links

• Age• Ethnic groups

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Psychographics

Position in the Family Life Cycle• Single

• Newly Married

• Full Nest

• Empty Nest

• Sole Survivor

Trends

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Industrial Market

Derived Demand • Industrial market demand tends to be dependent

on consumer demand

• Inelastic Demand

• increase or decrease of an industrial good will not

have a drastic effect on the price of consumer good

• Joint Demand

• two or more products are used together to produce a

single product

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Business/Industrial Segments

Extractors Construction Manufacturing Wholesalers Retailers Business Services Professional Services Institutions Nonprofit Organizations Government

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Global Market

Economic Interdependence• The need to obtain certain goods and services from other countries

• not self-sufficient Unique Resources

• country’s weather, raw materials, labor force, capital resources, location

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Global Market

Absolute Advantage• a country has special natural resources or

capabilities that allow it to produce a given

product at a lower cost than any other nation

in the world

Comparative Advantage• value a nation gains by selling the goods it

produces more efficiently than other nations

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Global Considerations

Language Barriers

Symbols

Gestures

Cultural Traits

Customs and Traditions

Religion

Economic Factors

Political and Legal Factors

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International Businesses

Multinationals• large corporations that have operations in several countries

Mininationals• midsized and smaller companies that have operations in other countries

Joint Ventures• partnerships with foreign companies

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Imports & Exports

Imports • Goods and services that are brought in and bought from other countries

Exports• Goods and services that are sent and sold to other countries

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Advantages of International Trade

Consumers• lower prices• improved quality

Producers• industrial growth

Workers• increased employment

Nations• improved standard of living• political alliances

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Disadvantages of International Trade

Inability to compete due to

cheaper labor costs and

availability of raw materials

Operations moved to foreign

countries

Unemployed US workers

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Balance of Trade

Difference in value between imports and exports• Trade Surplus• Trade Deficit

US largest exporter Emphasis shifting from farming and manufacturing to services

Negative trade balance• reduces GDP• contributes to unemployment

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Trade Barriers

Controls that restrict the flow of goods and services among nations• Tariff (duty) - tax on imports• Quotas - limits quantity or value of imports

• Embargoes - total ban on goods coming into and leaving a country

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Trade Support

Encouraging Foreign Trade• Most-Favored Nations Status

• Foreign Trade Zones

• Export-Import Bank (Eximbank)

• International Monetary Fund

Trade Agreements• General Agreement on Tariffs and Trade (GATT)

• North American Free Trade Agreement (NAFTA)

• European Union (EU)

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Social Responsibility

Environment Issues

• Air and Water Pollution - EPA

• Conservation

• Recycling

Business Ethics

Consumerism

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Ethics

Guidelines for good behavior Knowing the difference between right and wrong and doing what is right

Being truthful and fair Considering the well-being of society

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Ethical Questions

Is the practice right, fair, and

honest?

What would happen if the product

were marketed differently?

What practice will result in the

greatest good for the greatest

number of people?

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Consumerism

Societal effort to protect consumer rights

by putting legal, moral, and economic

pressure on business

Shared by individual consumers,

consumer groups, government, and

socially responsible business leaders

Largest growth 1960-1980

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Consumer Bill of Rights

To be informed and protected against fraud, deceit, and misleading statements, and to be educated in the wise use of financial resources

To be protected from unsafe products To have a choice of goods and services To have a voice in product and marketing

decisions made by government and business