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Chapter 6 Business Ownership and Operations Section 6.2 Types and Functions of Businesses

Read to Learn Differentiate the six types of businesses. Describe the five functions of business. Discuss how the five functions of business relate to each other.

The Main Idea There are many different types of businesses. The five functions of business are involved in every one.

Key Concepts Types of Businesses Functions of Business How the Functions of Business Are Interdependent

Key Term producer processor a business that gathers raw goods a business that changes raw materials into more finished products

Key Term manufacturer intermediary a business that makes finished products out of processed goods a business that moves goods from one business to another

Key Term wholesaler retailer a business that distributes goods a business that purchases goods from a wholesaler and sells them to consumers, the final buyer of the goods

Key Term production procurement the process of creating, expanding, manufacturing, or improving goods and services the buying and reselling of goods that have already been produced

Key Term marketing management the process of planning, pricing, promoting, selling, and distributing ideas, goods, and services the process of achieving company goals by planning, organizing, directing, controlling, and evaluating the effective use of resources

Key Term finance accounting the business or art of money management maintaining and checking records, handling bills, and preparing financial reports for a business

Graphic Organizer Types of Businesses Functions of Businesses Producers Processors Manufactures Intermediaries and Wholesalers Retailers and Service Businesses Production and Procurement Marketing Management Finance and Accounting

Producers producer a business that gathers raw goods A producer may be found in industries such as agriculture, mining, fishing, or forestry.

Processor processor a business that changes raw materials into more finished products A processor may, for example, turn crude oil into gasoline.

Manufacturers manufacturer a business that makes finished products out of processed goods Cars, CDs, and computers are examples of goods that are made by a manufacturer.

Intermediaries and Wholesalers intermediary a business that moves goods from one business to another An intermediary buys goods, stores them, and then resells them.

Intermediaries and Wholesalers wholesaler a business that moves good from one business to another A wholesaler of clothing may buy thousands of jackets from several manufacturers, divide the large quantities into smaller ones, and sell them to retailers.

Retailers and Service Businesses retailer a business that purchases goods from a wholesaler and sells them to consumers, the final buyers of the goods A record store is an example of a retailer.

Retailers and Service Businesses Service businesses perform tasks rather than provide goods. Service businesses employ about three- quarters of the workforce and are rapidly increasing in numbers.

A business that purchases goods from a wholesaler and sells them to consumers, the final buyers of the goods is known as a/an A.Intermediary B.Retailer C.Processor D.Manufacturer [Default] [MC Any] [MC All]

This type of business gathers raw goods Producer

A processor moves goods from one business to another A.True B.False

Functions of Business The five main functions of business are: Production and procurement Marketing Management Finance Accounting

Production and Procurement production the process of creating, expanding, manufacturing, or improving goods and services Production and procurement are closely related functions of business. procurement the buying and reselling of goods and services that have already been produced

Marketing marketing the process of planning, pricing, promoting, selling, and distributing ideas, goods, and services Marketing involves getting consumers to buy a product or service.

To Advertise or Not Advertising is used to influence consumers to buy one product or service over another.

Management management the process of achieving company goals by planning, organizing, directing, controlling, and evaluating the effective use of resources Management is an important function of business.

Finance and Accounting finance the business or art of money management Finance requires analyzing financial statements to make future decisions.

Finance and Accounting accounting maintaining and checking records, handling bills, and preparing financial reports for a business Accounting requires attention to detail and accuracy.

How the Functions of Business Are Interdependent The functional areas of a business depend on each other. Sometimes, the functional areas of a business conflict with each other.

Graphic Organizer Example of How Functional Areas Depend on Each Other A furniture maker’s sales are decreasing. The accounting and finance department notice decreasing sales. If the furniture is too highly priced, more efficient procedures will have to be implemented. A new marketing plan is created. The accounting and finance department will monitor the effects of new marketing efforts.

Graphic Organizer Example of How Functional Areas Conflict with Each Other Management wants to increase sales by 20 percent within three years. The production department suggests improving quality. The marketing department requests more funds for projects. Accounting says there is not enough money for either plan. The final plan involves ideas from all the functions of business.

Accounting is the business or art of money management A.True B.False

What function of business focuses on the process of planning, pricing, promoting, selling, and distributing ideas, goods, and services A.Procurement B.Marketing C.Finance [Default] [MC Any] [MC All]

1.What is the difference between a producer and a processor? A producer gathers or creates raw products. A processor changes raw products into more finished products.

2.Identify the five functions of business. production and procurement, marketing, management, finance, and accounting

3.Give an example of how the accounting and finance functions can affect a business’s marketing and production processes. If the financials show little profits, new marketing plans may be developed and new production procedures may be implemented.

Chapter 6 Business Ownership and Operations Section 6.2 Types and Functions of Businesses End of