 Draw the two circles from below on a sheet of paper, and write in each circle what they consider to be one of the function of business.
Functions of Business

S E C T I O N 5 . 1
D E F I N I N G B U S I N E S S







What a business is
The basic functions of a business
How to distinguish businesses from each other based on general characteristics
The importance of e-commerce
The concept of derived demand
The major types of businesses that comprise the industrial market

 Business is all of the activities involved in producing and marketing goods and services.
 Organizations involved in such activities are called companies, or businesses.

Every business seeks to satisfy economic needs by planning, organizing, and controlling resources in order to produce and market goods or services.

 Management – used to plan, organize, and control all available resources to reach company goals.
 3 Functions of Business:
1.
Production – the process of creating, growing, manufacturing, or improving on goods and services.
2.
Marketing – When goods or services are created, grown, or manufactured, they must be sold in the marketplace.
3.
Management

 Businesses can be categorized in the following ways:

By size – Is the business large or small?

By profit orientation – Is the business a profit or nonprofit concern?

By market served – Does the business serve the consumer or industrial market?

By kind of product provided – Does the business provide goods, services, or something else?

 Industrial Market – based on, or derived from, the demand for consumer foods and services

For this reason, the demand for consumer goods and services is called derived demand.
 Wholesalers – obtain goods from manufactures and resell them to industrial users, other wholesalers, and retailers.
 Retailers – buy goods from wholesalers or directly from manufactures and resell them to the consumer.
 E-commerce (electronic commerce) – buying and selling of goods through the use of electronic networks, usually the
Internet.

1.
2.
3.
True or False. Business is all of the activities involved in producing and marketing goods and services.
True or False. The following three functions of business are production, marketing, and management.
True or False. The marketplace exists wherever the product is bought for a customer.
4.
True or False. One of the ways business can be categorized is…by kind of product provided.
5.
6.
True or False. E-commerce is short for Environment Commerce.
True or False. Coach Hackett is the best Principles of Marketing teacher ever.