BBI 201: Fundementals of Business pt.1

What is Business

Commercial activity of an individual or group engaging in some kind of financial transaction

Repeatable process that creates and delivers something of value

Why do businesses exist?

To fulfill a need or want of a customer

To make profit

To provide a service to the community

How long do businesses survive?

As long as they are providing a good or service people need or want

Need

Goods/services that are required for survive

Examples of Needs

* Food
* Water
* Heat
* Shelter
* Clothes
* Transportation
* Law
* Communication

Want

Good/service that enhances a person’s life

Exmaples of Wants

* TV
* Cell phones
* Transportation (brand name)
* Clothing: brand name
* Vaciton
* Secuirity System

Factors that shape people’s needs and wants/Segments of a Target Market

* Age
* Gener
* Socioeconomic status (income)
* Religion
* Culture
* Family
* Perference
* Friends
* Media
* Weather
* Interests
* Ability/disability
* Priorities
* Employment
* Environment (friendly)
* Location (urban/rural)
* Self esteem
* Trends & Fads

Community Needs

* Infrastructure: sidewalks, wifi access, plumbing, electrical connection
* Hospitals
* Schools
* Emergency services
* Waste collection
* Grocery stores

Community Wants

* Parks
* Recreational centers
* Daycares
* Media facilities
* Cinema
* Boutiques

How do businesses know what need or want is in demand?

* The number of customers buying a product
* How much the customer is willing to pay for it
* How much of the product is available to consumers, both from your company and competitors

Trend

General direction that society movies in

Lasts a long time, solves a problem in society

Fad

Short term craze that becomes popular and unpopular which people follow quicckly and drop quickly

Examples of Trends

* Cell phones: communication
* Social media: communication

Examples of Fads

* Fidget Spinners
* Silly bands
* Rainbow Loom
* Heelys

More people own pets (What businesses are created by this trend?)

* Pet grooming services
* Veterinarians
* Doggy Daycares
* Animal Hospitals

What are the two Consumer Motives?

* Emotional
* Rational

Emotional Movites

Feelings, emotions and impulses

Rational Motives

Reason, judgement and logic

Examples of rational motives

* ease of operation
* economy
* time savings
* durability
* quality
* versatility

Examples of Emotional motives

* increased leisure time
* appearance
* prestige

Why is it important to understand a customer’s buying motives?

To properly meet their needs

* \
* product delvelopment
* product promotion

Who was Abraham Maslow?

A psychologist who studied human behaviour

What did Maslow explore?

What motives people’s actions (to do what they do)

* people’s wants and needs motive them

Maslow’s Hierarchy of Needs

Physiological

Safety & Security

Social & Love and Belonging

Self Esteem

Self-Actualization

Physiological Needs

Goods/services that satisfy your survival needs

Examples of Physiological Needs

* Basic food
* Basic clothing
* Basic shelter
* Heat

Safety Needs

Goods/services that fulfill your need for safety and security

Examples of Safety Needs

* Shelter
* Alarm system
* Emergency services
* Freedom
* Locks and keys
* Safety Supplies/Equipment

\

Social/Love & Belonging needs

Goods/services that make you feel accepted and loved by your friends and family

Examples of Social Needs

* Latest fashion itme
* Smartphones
* Dating apps
* Uniforms
* Social media

Self-Esteem Needs

Goods/serverices that make you feel respected by others, give you a sense of schievement and recognition

Examples of Self-esteem needs

* Higher education
* Expensive items: cars, clothing
* Products that display socioeconomic status
* “The best”
* Make you feel good about yourself

Self-Actualization Needs

Goods/services that gives you inner peace and fulfillment

Not expecting anything in return

Examples of Self-Actualization

* Hobby supplies
* Dream fulfillment
* Online learning platforms to learn and achieve your full potential
* Theryapy
* Donating money

How do businesses use Maslow’s needs to compete for your business?

By idenifying the level of Maslow’s needs that appeals to the customer and creating an ad around it.

Marketplace

* Where buying and selling of products take place
* Make up of producers and consumers
* Facebook marketplace
* Kijiji, etsy
* Farmers market, walmart, oshawa centre

Goods

Things that are made to be sold, tangible

* shoes
* apple

Products

Goods/services provided by a business

* Pjs
* Tvs
* Painting services

Services

The action of doing work for someone

* Instacart
* Lawn care

\

Producers

Businesses that make goods or provide services

* Samsung
* Apple

Consumers

People who use the product

* Students & Chromebook

Customer

Someone who buys from a particular business

* Gift, customer isn’t always the consumer

Competition

Producers that offer a product that meets the same needs of the same consumers

* Mcd’s & Tims

Direct Competition

Competition between products that are very similar

* Mcd’s, Wendys, Burger King

Indirect Competition

Products or services that are not directly related to each other but still fulfill the same need

* Mcd’s & Tims

Obsolete Products

Products that customers no longer want or need (fads)

* Fidget spinners
* SIlly bands
* VCRs

Pricing Power

Businesses have this if they if they can charge high prices and raise prices when costs go up

* Apple (phones)
* Cars (new cars currently)
* Covid -19, toliet paper, sanitizer

Consumer Purchasing Power

Consumers have this when they can choose where they will buy their goods and services and how much they will pay for them

* Clothing shops
* Make up
* Price matching
* Negotiating car prices (in the past)

Consuming habits of Canadians tell businesses…

* What goods and services consumers want
* When they want the goods/services
* How much they are willing to pay for them

What is the role of the consumer in business?

* They influence what products are sold
* They influence what prices are set
* They influence the level of service

How do consumers influecne products sold?

They buy certain products

What has to exist for consumers to be able to influence products sold?

Competition

Why do products become obsolete?

Customers don’t want or need that product anymore

What are some reasons why consumers would pay more for a product?

* Quality
* Design/style
* Colour
* Brand name
* Feel good in/with it

What helps keep prices down for consumers?

Competition

How do consumers influence price?

If they don’t but the product anymore, the producer will drop the price → the demand for the product affects price

How do consumers influence the service level at a company?

If customers have a bad experience and spread the word, it will lower the service level

BUT, when the customers conplain, the business may make up for the customer and help out → increases service level (going out of their way to help)