Understanding Customer Characteristics in Business

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Questions and Answers

What is the primary goal of a for-profit business?

To make a profit (correct)

To distribute profits only among members

To support community initiatives

To provide employment opportunities

Which of the following is NOT a characteristic of a non-profit organization?

Improves services offered to members

Operates to serve communities

Distributes profits to members (correct)

Raises funds for specific goals

According to Maslow’s Hierarchy of Needs, which need involves personal growth?

Self-actualizing Needs (correct)

Social Needs

Security Needs

Esteem Needs

What do expenses in a business refer to?

Payments and assets used in operations Signup and view all the answers

In which type of business do companies profit by providing activities for consumers?

Service Signup and view all the answers

Which of these items is an example of physiological needs in Maslow's hierarchy?

Food and water Signup and view all the answers

How do businesses determine what products to sell?

By studying consumer habits Signup and view all the answers

What is meant by the term 'marketplace'?

A location where producers and consumers interact Signup and view all the answers

What is the primary reason products become obsolete?

Lack of consumer desire Signup and view all the answers

In a competitive market, what typically happens to consumer prices?

Prices decrease due to increased choice Signup and view all the answers

What is a disadvantage of excessive competition for consumers?

Confusion with too many options Signup and view all the answers

What type of economic system is primarily controlled and owned by the government?

Command Economy Signup and view all the answers

What does the law of supply state?

Suppliers are inclined to provide more as prices increase. Signup and view all the answers

What occurs when the quantity supplied exceeds the quantity demanded?

Surplus Signup and view all the answers

What is a key feature of a corporation?

Requires a board of directors Signup and view all the answers

Which form of business ownership allows for easy transfer of ownership?

Corporation Signup and view all the answers

A drawback of a franchise agreement might include which of the following?

High initial fees and ongoing costs Signup and view all the answers

Which type of resource includes buildings and equipment used to create goods?

Capital resources Signup and view all the answers

What is the benefit lost from choosing one option over another called?

Opportunity cost Signup and view all the answers

What is a primary advantage of a cooperative?

Democratic structure for decision making Signup and view all the answers

An example of a mixed economy is which of the following?

Canada Signup and view all the answers

What typically happens to prices when there is a shortage of a product?

Sellers raise prices Signup and view all the answers

What is one major con of forming a partnership between businesses?

Potential conflicts may arise between partners Signup and view all the answers

Which is a disadvantage of international franchising?

Difficulties in local market adaptation Signup and view all the answers

What is a primary goal of corporate ethics?

Enhancing the company's reputation Signup and view all the answers

Which of the following best describes an Ethical Dilemma?

A conflict involving a moral decision with right and wrong alternatives Signup and view all the answers

What is the primary focus of Corporate Social Responsibility (CSR)?

Integrating social, environmental, and economic concerns into business operations Signup and view all the answers

In terms of market competition, what characterizes monopolistic competition?

Products are differentiated but entry is easy Signup and view all the answers

What requirement does the Duty to Report impose on corporations?

Corporations must disclose relevant information to stakeholders Signup and view all the answers

What factor can significantly influence the effectiveness of international business?

Exchange rates and currency fluctuations Signup and view all the answers

Which principle is NOT part of Corporate Social Responsibility?

Avoiding truthful advertising Signup and view all the answers

What is a common consequence of workplace harassment?

Deterioration of employee morale Signup and view all the answers

Which of the following would be a major disadvantage of a merger?

Potential for internal power struggles Signup and view all the answers

What is a primary purpose of a Code of Ethics?

To describe acceptable behavior for employees Signup and view all the answers

Which of the following is NOT a type of trade restriction?

Market segmentation Signup and view all the answers

Study Notes

Customer Characteristics

Typical customers are characterized by age and gender, but also by their values and preferences.
Business owners need to understand these characteristics to design appropriate products and services.

Business Basics

A business produces and sells goods or services to customers to generate revenue.
Profit is calculated as total revenue minus total expenses.
For-profit businesses aim to maximize profit, while not-for-profit organizations focus on community service.

Types of Businesses

Manufacturing: Businesses that produce goods from raw materials.
Retail: Businesses that sell products to consumers.
Service: Businesses that provide services to consumers or businesses.
Not-for-profit: Organizations that do not distribute profits to members, but instead reinvest any surplus to enhance services offered.

Maslow's Hierarchy of Needs

Physiological: Basic needs for survival (water, food, air, sleep).
Security: Safety and security needs (steady employment, health insurance, shelter).
Social: Needs for belonging, love, acceptance (friendships, relationships).
Esteem: Personal worth, recognition, accomplishment.
Self-actualization: Personal growth, less concern with others' opinions.

Consumer Role

Producers create goods/services consumers need/want.
Consumers purchase goods/services from producers.
Marketplaces bring producers and consumers together to exchange goods/services.
Consumer habits influence product offerings (needs, wants, prices, locations).

Consumer Influence

Consumers control the popularity and obsolescence of products.
Businesses control pricing when competition is low.
Consumers influence service locations because of their purchasing power.
Competition creates greater variety, better prices, and increased quality.

Economic Resources

Businesses use economic resources (factors of production) to make and sell goods and services.
Natural resources: Raw materials (e.g., iron ore, timber).
Human resources: Employees (e.g., workers, managers).
Capital resources: Buildings, equipment, finances.
Scarcity: Limited resources to meet unlimited needs.

Economic Systems

Command economy: Government controls.
Market economy: Consumers and producers determine decisions.
Mixed economy: Combines elements of both.

Supply and Demand

Demand: Consumers' willingness and ability to purchase goods/services at various prices.
Law of Demand: Higher price, lower demand.
Supply: Producers' willingness and ability to offer goods/services at various prices.
Law of Supply: Higher price, increased supply.
Equilibrium: Supply equals demand at a given price.
Surplus: Supply exceeds demand.
Shortage: Demand exceeds supply.

Forms of Business Ownership

Sole Proprietorship: Owned by one person (unlimited liability).
Partnership: Owned by two or more (unlimited/limited liability).
Corporation: Legally separate entity (limited liability).
Cooperative: Owned by members, who use the services or buy the goods.
Franchise: Uses a successful business model (some restrictions).
Joint Venture: Cooperation with another business.
International Franchise: Franchising business internationally

Decision-Making Model

Define problem: Identify the core issue
Identify alternatives: Explore potential solutions.
Evaluate advantages/disadvantages: Analyze pros/cons of each option.
Make and implement decision: Choose the best option and execute it.
Evaluate decision: Assess the success of the decision.

Corporate Ethics

Ethics involves moral principles and proper conduct for individuals and businesses.
Corporate social responsibility integrates social, environmental, and economic concerns.

CSR involves social, environmental, and economic concerns, transparency, and accountability.
Ethical behavior benefits reputation, customer loyalty, attracting talent, and investment.
Ethical issues include employing standards (fair wages), ethical promotion, and ensuring equality in employee treatment.
Duty to report: Corporations disclose important information to various stakeholders.
Compliance/conviction: Motivations behind CSR actions.

Corporate Laws and Regulations

Laws govern workplace safety, anti-discrimination, harassment, accessibility, the environment.
Employment standards (wages overwork), accessibility measures
Organizations must protect employees, comply with anti-discrimination laws, and address accessibility concerns.

Trade Relations

Tariffs, quotas, and embargoes: Trade restrictions.
ISO and other organizations influence quality standards.
Exchange rates impact international trade.

International Business

International business involves activities that span national borders.
Benefits include access to global markets, resources, cheaper labor, improved product quality, and benefits to consumers.

Market Competition

Pure competition: Many buyers/sellers with identical goods.
Monopolistic competition: Many buyers/sellers with differentiated goods.
Oligopoly: Few sellers with significant market power.
Monopoly: One seller with complete control.

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Description

This quiz explores the importance of understanding customer characteristics such as age, gender, values, and preferences in the context of business. Participants will learn about different types of businesses and their operational goals, along with contributions from Maslow's Hierarchy of Needs. Perfect for students in business studies.