Chapter 2: MGTA01 (Textbook Notes)

Profit and Customer Satisfaction

Businesses must aim to both gain profits and satisfy customers as these two aspects are interdependent.

Product

Refers to what a purchaser expects to receive or believes they are getting when making a purchase from an individual or organization.

Public Sector Organization

An organization owned or funded by the government, with about 20% of the working population employed in this sector.

Private Sector

The part of the economy managed by private individuals primarily to make a profit.

Goods

Tangible products that can be seen and touched.

Services

Intangible products that are experienced rather than seen or touched.

Immediacy

The quality that makes something important or relevant because it is happening at that moment.

High-contact Services

Services that necessitate personal interaction with the customer, like nursing homes or haircuts.

Low-contact Services

Service operations that do not require direct interaction with the customer, such as internet banking or fast food.

Customization

The characteristic of a service where each customer desires a unique delivery.

Diversification

Owning a wide range of investments to reduce risk, akin to not putting all your eggs in one basket.

Value Proposition

The reason why customers should buy from a particular business.

Function

The intended purpose of a product, such as transport for a car or night accommodations for a hotel.

Features

Additional attributes that enhance the usefulness or experience of a product.

Benefits

Advantages derived from purchasing a product, like a sense of achievement or social status.

Value

The worth or importance of a product, often in terms of usefulness, desirability, or financial value.

Consumer Products

Items bought by end-users for personal use, like cereal.

Industrial Products

Parts, ingredients, or materials purchased by businesses to create consumer products.

Product Life Cycle

The stages a product goes through from introduction to decline as consumer preferences change.

Research and Development (R&D)

The process of seeking innovations and ideas for the next generation of products.