Abhinav

__rss url="http://news.bbc.co.uk/2/hi/help/3223484.stm" link="true" description="true" number="10"Nature of Business Activity__

In simple words, business is an organisation which converts inputs in to outputs.

Outputs can also be called as products

i.e., goods and services

Business exist for satisfying needs and wants of people.

Needs : Basic neccessities i.e., food clothing and shelter.

__Wants:__ Desires of people regarding the things or goods and services.

Wants are unlimited

Business is affected both by internal and external factors.

__Market :__ It is a place or process where buyer and seller meet each other for trading purpose.

Market can be physical or virtual.

Eg of physical market are shop, restaurant, Cinema

Eg of virtual market is E-commerce

__Difference between consumers and customers__

Consumers: Who actually consume or use the product

Customers: The one who buys a product.

Eg: Mother purchasing a chocolate for her child

Here, Mother is a customer and the child is a consumer

__Types of Goods__

Goods are of two types i.e., consumer goods and capital or producer goods

Consumer : These are goods which are sold to public and are for consumption purpose.

Types of Consumer goods,

1. Durable 2.Non- durable

Durable goods: Those goods which can be used for a longer period of time.

Non-durable goods : Those goods which are consumed in a very short time, after their purchase.

__Value Added :__ It is the difference between the value of input(cost of production) and the value of output (value of goods and services sold to the customers)

In short value added is S.P - C.P

__Adding Value__ : It is the result of the production process.

Adding value can be in the form of
 * 1) Speed/quality of service
 * 2) Quality of finished product
 * 3) Taste or design

Business has to take decisions regarding daily operations and for its long term prospects

__Opportunity Cost:__ It is the value of next best alternative forgone while making a decision.

Opportunity cost is useful when assessing the true cost and benefits of competing choices.

__Role of profit in business__

__Factors of Production :__ To produce a good or service their is always the need of resources
 * 1) It is a reward for risk
 * 2) It acts as an incentive to produce
 * 3) It encourages invention and innovation
 * 4) It is an indicator of growth/decline.
 * 5) It acts as a source of finance.

These resources are called as factors of production or factor inputs.

All resources can be classified in to two groups i.e., Human resources and non -human resources

The are four vital factors of production


 * 1) Land
 * 2) Labour
 * 3) Capital
 * 4) Enterprise

Land : It refers to all natural resources found on the planet that are available for production.

These can be further classified as renewable and non-renewable

Eg of renewable sources: Fish stocks, trees and water

Eg of non- renewable sources : Minerals and fossil fuels.

Labour : It means the physical and mental effort of people used in the production of a good or service.In context of labour quality is more important than quantity.

Capital: It refers to all non-natural i.e., manufactured resources that are used in the creation and production of other products. Examples include money, buildings, equipment, tools, machinery and vehcile etc.

The greater the spending on capital stock(also known as investement), the greater the productivity of business.

Enterprise : Generally Known as entrepreneurship, refers to the management, organisation and planning of the other three factors of production.Successful entrepreneur tend to be creative, innovative and passionate.Entrepreneurs are not labourers, although they are human because the success or failure of a business rests on the abilities of the entrepreneur.

__Factors of production and their return.__

Factors of production Return

...........................................................................................................*................................................................................................................
 * 1) Land - Rent
 * 2) Labour - Wages
 * 3) Capital - Interest
 * 4) Enterprise- Profit
 * Marketing

The Nature of marketing**

Marketing definition as given by Institute of marketing is as follows:

'Marketing is the management process involved in identifying, anticipating and satisfying consumer requirement profitably'

According to American Marketing association,'Marketing is the process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services to create exchange and satisfy individual and organisational objectives.'

Effective Marketing: The features of effective marketing is as follows :

Process : It does not have a start and an end, but is ongoing all the time.Business must be prepared to respond to changes that take place.

A business philosphy : Marketing is more a ' way of thinking ' about how to satisfy to consumer needs.

Building relationship with customers : In this approach to marketing which stresses the importance of developing relationships with customers which last longer than the short-term.

There may be several puposes of marketing like

1.To satisfy consumers 2.To identify consumer requirement 3.To anticipate consumer requirement 4.To compete effectively 5.To make a profit

Marketing can be classified in to two group : 1.Consumer Marketing 2.Business to Business Marketing

Product and market orientation

Product orientation means that the business focuses on the production process and the product itself.It puts most of its efforts into developing and making products which it believes consumers want and which will sell well.

Market orientation on the other hand refers to a business which continually identifies,reviews and analyses consumers' needs.It is led by market.

Asset based or Asset led marketing : A business which is having an asset led or asset -based approach to marketing is responsive to the needs of the market but equally it takes into account its own strength and weaknesses when producing a good or providing a service.

Mass Marketing occurs when a business offers almost the same products to all consumers and promotes them in almost the same way.Eg, of mass marketing are Coca-cola and Microsoft computer software.

Niche marketing involves a business aiming or targeting a product at a particular often small, segment of a market.

Why do firms attempt niche marketing:

1. Small firms find it easy to target markets which are overlooked or ignored by other firms.In this way they avoid competition in the short run atleast. 2.Firms targeting a specific market thereby satisfying the needs of customers in a much better manner.

Although niche marketing has its disadvantage too:

1.Firms in the niche market generally have one product to sell which does not allow business to spread its risk across different products. 2.Due to small customer base, niche markets firms are faced with bigger and more frequent swings in consumer spending than large markets.


 * Market research**

It can be defined as the collection, collation and analysis of data relating to the marketing and consumption of goods and services.

Research are done basically for three reasons:

a.Descriptive reasons : A business may wish to identify what is happening in its market. b.Predictive reasons:A business may wish to predict what is likely to happen in the future based on past data. c.A business may want to explain a variety of matters related to its marketing.This may include sales in a particular part of the country.

Research can be of two types

Primary research: This is first hand research and includes the following techniques

1 Self completed questionnaires 2Personal questionnaires 3Postal questionnaires 4Telephone questionnaires 5Observation 6Experimentation 7Online Surverys

Advantages of PR

1Provides upto date information 2Relevance 3Confidential and unique 4Objectivity