WAYS BUSINESSES COMPETE It’s a dog eat dog world!

LEARNING TARGET ▪ I can explain how businesses compete and influence the market.

BUSINESSES COMPETE IN MANY WAYS… ▪ Why would a business compete? ▪ Who would they compete with? ▪ How does this help the consumer?

LOWERING THE PRICE ▪ Joe and Moe both sell t-shirts ▪ Joe sells his for $5.00 ▪ Moe decided to undercut Joe and sell his for $4.50. ▪ Joe decides to match Moe’s price and lowers his to $4.50. ▪ This could continue for some time, but when would they HAVE to stop lowering their prices?

BETTER PRODUCT ▪ Some businesses will work to make their product look better, work more efficiently, last longer or do more. ▪ Prices may be the same or even higher than a competitive company. The main goal is to offer a product that is better enough to override the price difference.

BETTER CUSTOMER SERVICE Some businesses try to persuade consumers to use them because they offer friendly, knowledgeable people to help with their problems. This means they must hire these type of people. For example, if a person buys a computer at a store, but then can’t find anyone knowledgeable that works there to help them, they will be more likely to go to another store in the future.

ECONOMIC INCENTIVES ▪ Offering something ‘special’ or ‘extra’ is another way to compete. Rewards like a toy in a Happy Meal or a free drink when you purchase a slice of pizza will often prompt customers to visit that business. ▪ Some places have rewards programs for recurring shoppers. Generally, once you’ve visited the store so many times, you get a special discount or money back. ▪ Other businesses allow special coupons that can only be used in their store. Often times in conjunction with manufacture's coupons, which would give the customer a huge discount.

ADVERTISING ▪ Often, a business will rely on advertising to promote their products to the public. They may hang up signs, do TV or Radio ads or run a newspaper ad. ▪ The purpose of these is to tell the customer how wonderful their product is, where their business is located and any specials they may be running at the time.

GET OUT A PIECE OF PAPER 1.) Fold it in half (either way) 2.) Fold it in half (the opposite way of #1) 3.) Write 1, 2, 3 and 4 in each section

WHAT DO YOU KNOW? 1.) Lower Price 2.) Better Product/Service 3.) Incentives 4.) Advertising