The role of the
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The Role of the…. Basic Terms. Producers – businesses that make goods and services Consumers – people who buy the goods and services Marketplace – location where producers and consumers come together Consuming habits tell business what customers want, when, how much they want to pay

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The Role of the….

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The role of the

The Role of the….


Basic terms

Basic Terms

  • Producers – businesses that make goods and services

  • Consumers – people who buy the goods and services

  • Marketplace – location where producers and consumers come together

  • Consuming habits tell business what customers want, when, how much they want to pay

  • Businesses used to dictate to consumer what they wanted, but now because of competition, consumers drive the market


The role of the

  • Shift from businesses controlling the market, to consumers controlling, took place in the 1950’s

  • Obsolete – Goods that are no longer wanted by consumers

  • What are obsolete goods that you can think of?

  • Pricing power – When businesses are in control and can charge high prices, as well as raise prices

  • See discussion p. 13


Consumer influence on service

Consumer Influence on Service

  • Consumer purchasing power – Customers who have the pwer to choose where they will buy goods/services

  • Increasing choices for consumers force businesses to improve

  • Consumers are thought to be in charge of the market today


Starting out

Starting Out

  • Entrepeneurs must be: self-confident, innovative, self-disciplined, able to manage others

  • Needs – Things that are necessary for survival (food, water, clothing, shelter)

  • Wants – Things not necessary for survival, but add comfort and pleasure to our lives

  • Identify the competition, and how you will attract customers

  • See pg. 18 for Food and Beverage illustration


Consumer interest

Consumer Interest

  • Existing businesses come up with ‘new and improved’ products to generate interest

  • Businesses also try to promote existing products through advertising

  • Research is critical to understanding consumers

  • Timing is also key to fulfilling consumer demands


Good business decisions

Good Business Decisions

  • Inventory – Called stock; quantity of goods on hand

  • Too much inventory = money tied up

  • Too little inventory = consumer unhappiness

  • Businesses must determine how much inventory to keep on hand (accountants!)

  • Use the Decision Making Model for Inventory


Inventory decision making model

Inventory Decision Making Model

  • What decision has to be made? How many of one type of product should be kept on hand to satisfy consumer demand?

  • Identify the alternatives. E.x. how many of each model should be on hand?

  • Evaluate the advantages and disadvantages of each alternative

  • Make a decision and take action

  • Evaluate the decision


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