Marketing Principles CHAPTER 5 SECTION2

 One of the easiest ways to describe a business is by its size. 1.Small business is owned by only one or a few individuals. (has fewer than 100 employees) 2.Large business employs more than 1000 people. 3.95% of US businesses are classified as small businesses.

 Domestic business – a company that sells its product or service only in its own country  Global business – sells its product or service in more than one country  The trend among large and small businesses is toward a more global market.

 Profit business – seeks to make a profit  Nonprofit – operates like a profit business but uses the money it makes to fund the cause identified in its charter ◦They raise money through gifts and donations but some sell goods or services.

 Public sector – government-financed agencies  Private sector – businesses not associated with the government  Public sector organizations purchase one third of all the goods and services sold in the US each year.

 Industry – consists of a group of businesses that are engaged in producing similar products or services  NAICS – North American Industry Classification System – businesses that do similar things in similar ways are classified together  Derived demand – the demand for consumer goods and services  Organizational market – business consumers who buy goods for use in their operations

 Organizational market consists of: 1.Extractors – take something from the earth or its water supply 2.Construction – build structures 3.Manufacturing – producing goods 4.Wholesalers – obtain goods and sell them 5.Retailers – obtain goods and sell them

 Four main functions in an organization’s operation: 1.Production – creating, growing, manufacturing or improving on goods or services. Procurement – buying materials, products, and supplies. 2.Marketing – All activities from the time a product leaves the producer until it reaches the final consumer 3.Management – process of achieving a company’s goals through planning, organizing, and controlling

4. Financing – function of business that involves money management. Accounting – keeps track of a company’s financial situations.  Balance sheet – reports a company’s assets, liabilities, and owner’s equity.  Profit and loss statements – reflect the ongoing operations of a firm