Types of Businesses

A business entity is an organization that uses economic resources or inputs to provide goods or services to customers in exchange for money or other goods and services.

Business organizations come in different types and different forms of ownership.

3 Types of Business

There are three major types of businesses:

1. Service Business 

A service type of business provides intangible products (products with no physical form). Service type firms offer professional skills, expertise, advice, and other similar products.

Examples of service businesses are: salons, repair shops, schools, banks, accounting firms, and law firms.

2. Merchandising Business

This type of business buys products at wholesale price and sells the same at retail price. They are known as "buy and sell" businesses. They make profit by selling the products at prices higher than their purchase costs.

A merchandising business sells a product without changing its form. Examples are: grocery stores, convenience stores, distributors, and other resellers.

3. Manufacturing Business

Unlike a merchandising business, a manufacturing business buys products with the intention of using them as materials in making a new product. Thus, there is a transformation of the products purchased.

A manufacturing business combines raw materials, labor, and factory overhead in its production process. The manufactured goods will then be sold to customers.

Hybrid Business

Hybrid businesses are companies that may be classified in more than one type of business. A restaurant, for example, combines ingredients in making a fine meal (manufacturing), sells a cold bottle of wine (merchandising), and fills customer orders (service).

Nonetheless, these companies may be classified according to their major business interest. In that case, restaurants are more of the service type – they provide dining services.

Forms of Business Organization

These are the basic forms of business ownership:

1. Sole Proprietorship

A sole proprietorship is a business owned by only one person. It is easy to set-up and is the least costly among all forms of ownership.

The owner faces unlimited liability; meaning, the creditors of the business may go after the personal assets of the owner if the business cannot pay them.

The sole proprietorship form is usually adopted by small business entities.

2. Partnership

A partnership is a business owned by two or more persons who contribute resources into the entity. The partners divide the profits of the business among themselves.

In general partnerships, all partners have unlimited liability. In limited partnerships, creditors cannot go after the personal assets of the limited partners.

3. Corporation

A corporation is a business organization that has a separate legal personality from its owners. Ownership in a stock corporation is represented by shares of stock.

The owners (stockholders) enjoy limited liability but have limited involvement in the company's operations. The board of directors, an elected group from the stockholders, controls the activities of the corporation.

In addition to those basic forms of business ownership, these are some other types of organizations that are common today:

Limited Liability Company

Limited liability companies (LLCs) in the USA, are hybrid forms of business that have characteristics of both a corporation and a partnership. An LLC is not incorporated; hence, it is not considered a corporation.

Nonetheless, the owners enjoy limited liability like in a corporation. An LLC may elect to be taxed as a sole proprietorship, a partnership, or a corporation.

Cooperative

A cooperative is a business organization owned by a group of individuals and is operated for their mutual benefit. The persons making up the group are called members. Cooperatives may be incorporated or unincorporated.

Some examples of cooperatives are: water and electricity (utility) cooperatives, cooperative banking, credit unions, and housing cooperatives.

Sustainable Business Practices

Sustainable business, or a green business, is an enterprise that has minimal negative impact, or potentially a positive effect, on the global or local environment, community, society, or economy—a business that strives to meet the triple bottom line. Often, sustainable businesses have progressive environmental and human rights policies. In general, business is described as green if it matches the following four criteria:^[1]

1. It incorporates principles of sustainability into each of its business decisions.
2. It supplies environmentally friendly products or services that replaces demand for nongreen products and/or services.
3. It is greener than traditional competition.
4. It has made an enduring commitment to environmental principles in its business operations.

You are to watch both videos as a class. After watching ( and potentially rewatching on your own) I would like you to respond to either one,( not both) of the videos.

A response can be any of the following: Length: 3/4-1 page in length

• What did you think about the info? Does the info make you concerned, angry, surprised etc.?
• Do you have any further information to add to what you watched?
• Do you agree, disagree with the info presented?
• Does the video make you think about some aspect of the bigger picture? your own buying patterns? What opinions do you have about what you heard/viewed?
• How do you feel about company's who are using greenwashing as a promotional technique?
• What does the video say to you as a consumer? Do the films raise any questions for you?

You are not to answer these questions outright, but rather gather your thoughts and respond intelligently to one of the videos. This assignment t should be typed and will be due at the end of the class on Wed.

I will be grading this assignment on the following:

• Ability to present intelligent thoughts in a way that shows you have thought about the content of the video
• In your writing you will speak to the concept of sustainability in business

This will be a term 2 assignment.

Distribution

Read the article on Distribution and answer the the questions at the end of the article.

A distribution channel is a chain of businesses or intermediaries through which a good or service passes until it reaches the final buyer or the end consumer. Distribution channels can include wholesalers, retailers, distributors, and even the Internet.

Indirect Distribution
Indirect distribution involves distributing your product by the use of an intermediary for example a manufacturer selling to a wholesaler and then on to the retailer.
Direct Distribution
Direct distribution involves distributing direct from the manufacturer to the consumer For example Dell Computers providing directly to its target customers. The advantage of direct distribution is that it gives a manufacturer complete control over their product.

Place and Distribution Intermediaries Defined
Manufacturer: Person, group or firm that makes the product.
Wholesaler: The party that buys large quantities of a product from manufacturers and sells it to retailers. Wholesalers sell goods to other businesses, they do not sell directly to consumers.
Retailers: The organisation that sells products directly to consumers and end users. As they are selling to consumers for personal use, the goods are usually sold in small quantities.

Levels of Distribution channels
Zero level channel – Where the distribution happens from company to end customer.
One level channel – Distribution happens with a single agent in between. Example – From manufacturer to E-commerce companies. And from E-commerce to customer.
Two Level channel – Distribution happens with 2 business entities in between. Example – Goods flowing from manufacturer to Distributor >> Distributor to Retailer >> And Retailer to customer.
Three level channel – Distribution happening with 3 business entities in between. Example – Goods flowing from Manufacturer to C&F >> C&F to Distributor >> Distributor to Retailer >> And Retailer to customer.

PLACE – AN INTRODUCTION
Through the use of the right place, a company can increase sales and maintain these over a longer period of time. In turn, this would mean a greater share of the market and increased revenues and profits.
Correct placement is a vital activity that is focused on reaching the right target audience at the right time. It focuses on where the business is located, where the target market is placed, how best to connect these two, how to store goods in the interim and how to eventually transport them.

MAKING CHANNEL DECISIONS
Setting Goals and Direction
The first step to deciding the best distribution channel to use, a company needs to:
Analyze the customer and understand their needs
Discuss and finalize channel objectives
Work out distribution tasks and processes.
Some key questions to ask in finalizing these three areas include:
Where do users seek to purchase the product?
If is a physical store, is it a supermarket or a specialist store? Is it an online store? What is the access available to the right distribution channels?
What are competitors doing? Are they successful? Can best practices be used in making channel decisions?

Selecting Distribution Strategies

Intensive Distribution – This strategy may be used to distribute lower prices products that may be impulse purchases. Items are stocked at a large number of outlets and may include things such as mints, gum or candy as well as basic supplies and necessities.
Selective Distribution – In this strategy, a product may be sold at a selective number or outlets. These may include items such as computers or household appliances that are costly but need to be somewhat widely available to allow a consumer to compare.
Exclusive Distribution – A higher priced item may be sold at a single outlet. This is exclusive distribution. Cars may be an example of this type of strategy.

Assessing Benefits of Distribution Channels
While making channel decisions, a company may need to weigh the benefits of a partner with the associated costs. Some potential benefits to look out for include:
Specialists – Since intermediaries are experts at what they do, they can perform the task better and more cost effectively than a company itself.
Quick Exchange time – Being specialists and using established processes, intermediaries are able to ensure deliveries faster and on time.
Variety for the Consumers – By selling through retailers, consumers are able to choose between a varieties of products without having to visit multiple stores belonging to each individual producer.
Small Quantities – Intermediaries allow the cost of transportation to be divided and this in turn allows consumers to buy small quantities of a product rather than having to make bulk purchases. This is possible when a wholesaler buys in bulk, stores the product in a warehouse and then provides the product to retailers located close by at lower transportation costs.
Sales Creation – Since retailers and wholesalers have their own stakes in the product, they may have their own advertising or promotions efforts that help generate sales.
Payment Options – Retailers may create payment plans and options for customers allowing easier purchases.
Information – The distribution channel can provide valuable information on the product and its acceptability, allowing product development as well as an idea of emerging consumer trends and behaviors.

Assessing Possible Channel Costs
With the benefits in mind, here are some costs that a producer may have to weigh in order to make channel decisions
Lost Revenue – Because intermediaries need to be either paid for their services or allowed to resell at a higher price, the company may lose out on revenue. Pricing needs to stay consistent, so the company will have to reduce its profit margin to give a cut to the intermediary.
Lost Communication Control – Along with revenue, the message being received by the consumer is also in the hands of the intermediary. There is a danger of wrong information being communicated to the customer regarding product features and benefits which can lead to dissatisfaction.
Lost Product Importance – When a product is handed over to an intermediary, how much importance it gets is now out of the company’s hand. The intermediary may have incentives to push another product first at the expense of others.

Benefits of Channel Segmentation
A company may achieve one of more of the following benefits through channel segmentation:
Product Management – Relevant products may be provided to the right channel which can help reduce cost of irrelevant stock as well as unnecessary logistical arrangements.
Price Management – Local price differentiation may be possible.
Promotion Management – More targeted and relevant promotional activities may be possible with more clear and consistent marketing messages.
Efficiency in Operations – Time and resource wastage through the channel can be removed. Development needs of every channel segment can be addressed separately, in a more targeted manner.

IMPACT OF MARKETING MIX ON PLACE
No element of the marketing mix works in isolation. Information from each of them acts as input to the others. This is why when shaping a distribution strategy, input needs to be taken from all other elements of the mix and any considerations need to be addressed or incorporated. Product, price and promotion may have the following impacts on the distribution strategy.

Impact of Product Issues
The type of product being manufactured is often the deciding factor in distribution decisions. A delicate or perishable product will need special arrangements while sturdy or durable products will not require such delicate handling.
Impact of Pricing Issues
An assessment of the right price for a product is made by the marketing team. This is the price at which the customer will be willing to make the purchase. This price will often help decide the type of distribution channel. If this price does not allow a high margin, then a company may choose to use less intermediaries in its channel to ensure that everyone gets their cut at a reasonable cost to the manufacturer.
Impact of Promotion Issues
The nature of the product also has an impact on the type of promotions required to sell it. These promotion decisions will in turn directly affect the distribution decisions. Disposable goods or those of everyday use do not require too many special channels. But for a car, there needs to be extensive salesperson and user interaction. For this type of product, a specialist channel may be needed.

Questions: After reading...do you understand distribution?

Define and give an example of distribution in your own words.
What are the benefits of selling direct to consumer?
What are the negatives of selling your product through a retailer?
Why would car manufacturers want to sell their product through selective retailers?
Think of an example of a company that uses a zero level channel, in other words goes from manufacturer directly to the customer.
Explain the different channels of distribution Apple has for its I Phone products.
If you have a low margin on your product, why would it not be a good idea to sell your product through a retailer? 
List the three types of distribution that East Coast Lifestyle uses.

You need to know your customer

Demographics/Psychographic

Demographics

Demographics is the study of a population based on factors such as age, race, and sex. Demographic data refers to socio-economic information expressed statistically, also including employment, education, income, and marital status.

Psychographics 

In the field of marketing, psychographic variables are any attributes relating to personality, values, attitudes, interests, or lifestyles. They are also called IAO variables (for Interests, Activities, and Opinions).

Read this Article

Check out You Tube:  Key word Psychographics

https://blog.hubspot.com/insiders/marketing-psychographics

nike ad

understanding demographics

Trendsetting

Cool Hunting

Example of an upcoming trend

Ad Assignment

Ad Assignment: You and your partner are to create a 15 sec ad that focuses on selling your product or service to the class. You need to write a script for the commercial that should be typed and handed in to me when you present your commercial.

Presentation date: You should  be producing a video commercial  and it should be in the format to present in class on Wed Oct 23. If you are not prepared on this day, your assignment will still be marked but you will be deducted marks for not meeting the deadline.

Class time to work on this assignment: Thurs., Fri., Mon. and half of Tue.'s class.

Week of Oct 15-19

Please finish up advertising textbook questions, they are due tomorrow and will be handed in during class time. This should also include your 3 ideas for a new product or service idea after analyzing your life and what problems you encounter on a daily basis.

If you finish this go on to the following;

1. Define product life cycle. Read the following post about the rebirth stage of the product lifecycle.

Product rebirth

What product has made its way to the rebirth stage?

2. Define trend and fad.
3. Find 2 examples of fads that were unsuccessful, and 2 examples that have been successful in the past 5 years.
4. Do a little research on trending products in 2019/2020. What do you for see as a trend for early 2020? Explain why.

Check out his website

The anatomy of cool

1) FADS

The easiest way to categorize a fad is one word: short-lived. Typically, fads last for a total of one season, but they can also last less than a month. Fads are novelty driven fashion choices. A fad is often referred to as “catching on” with the larger population, but will often fade as quickly as it appeared. The easiest way to remember a fad is through a simple alliteration: fads fade. Although engaging in fads can be fun, they are often not worth investing a large amount of money or time.

2) TRENDS

Trends have a much longer lifespan than fads. In fact, they can continue to be fashionable for years and even decades. The primary difference between a trend and a fad is that trends have the potential to be long-term influencers on the market. In addition, trends often involve altered classics. For example, specific colors can be declared “trendy.” For 2014, the colors orange and blue garnered a lot of attention. However, orange and blue are classic colors; in other words, a classic piece has been declared a “trend.” Trends can be much more difficult to track, but the best rule of thumb when considering whether a piece is a classic or a trend, is to ask yourself: “Will I still love this in five years?” If the answer is a resounding “Yes,” then chances are that the piece is either a classic or an updated classic, both of which will age beautifully.

Speaker Eugene Chung

Speaker Eugene Chung coming to class Thurs. Oct. 11. He is a social media marketing consultant.

http://www.peergardenmedia.com/#who-we-are


Friday in class debate on the Pro's and Con's of Advertising in the schools.

Article on the Pro's and Con's of Advertising in the schools

schools and advertising

According to critics, many advertisements endorse products that are detrimental to children's health, such as unhealthy food, and some people argue that children are more easily drawn to persuasive advertisements than adults.^[11] It has also been argued that schools should be environments where students will not be distracted from their work by advertisements.^{[according to whom?]}

Channel One News has 2 minutes of advertising for every 12 minutes of news.^[12] Students can lose up to a full day of class time over a year for advertisements.^[13]

There is a concern that children do not understand the motivation behind ads. Children under the age of 13 are a vulnerable population that lacks the executive functioning skills to comprehend what the advertisement is trying to sell and the techniques used to persuade and frame customer decisions. Children do not possess the same knowledge of advertising tactics as adults and are more susceptible to their persuasive intent. Elementary school children are not necessarily able to comprehend the fact that advertising agencies may have a different perspective from their own.^[14]

Advertising

Objectives of Advertising

Link to: top advertising agencies in Vancouver

link to BCIT Marketing Management and Advertising

15 popular advertising campaigns videos

Advertising is how a company encourages people to buy their products, services or ideas. ... An advertisement (or "ad" for short) is anything that draws good attention towards these things. It is usually designed by an advertising agency for an identified sponsor, and performed through a variety of media.
Advertising includes messages that your company pays for, delivers through a mass medium and uses to persuade consumers to make a purchasing decision. The three general ad objectives are to inform, to persuade and to remind customers about the product and its benefits compared to those of competitors.

Types of advertising
⦁ Newspaper. Newspaper advertising can promote your business to a wide range of customers. ...
⦁ Magazine. Advertising in a specialist magazine can reach your target market quickly and easily. ...
⦁ Radio. ...
⦁ Television. ...
⦁ Directories. ...
⦁ Outdoor and transit. ...
⦁ Direct mail, catalogues and leaflets. ...
⦁ Online.

 The Advertising & Marketing Campaign Representative will help assist our client’s marketing and sales department with executing incredible, high-quality, imaginative residential advertising campaigns! This firm needs a dedicated, reliable, and professionally minded individual who is looking to expand their marketing, advertising, and management experience and skill set.

Advertising Salary Range: $32-100,000
Advertising career: Desirable Personality Traits:
⦁ Obsessively customer and client focused
⦁ Self-starter with an aggressive work ethic that appreciates constant improvement
⦁ Outgoing personality that is both personable and engaging
⦁ Excels calmly under pressure and is able to manage and compartmentalize potential issues in order to meet deadlines and leave customers both feeling heard and cared for
⦁ Strong eye for detail that sees what needs to be done and an ability to anticipate client needs
Key Responsibilities of the Advertising & Marketing Campaign Representative:
⦁ Provide brand presentations face-to-face with consumers during residential advertising campaigns to educate them on client services and create a positive brand experience.
⦁ Manage campaign set up including assisting with logistics and developing advertising campaign
⦁ Record data and information from advertising campaigns to track advertising campaign success.
⦁ Our client provides all training which means you don't need any experience. However, the following experience and skills would be a benefit.

Minimum Requirements of the Advertising & Marketing Campaign Representative:
⦁ Work related experience or study in advertising, marketing, public relations, communications, promotional marketing, marketing communications, and associated fields preferred.
⦁ High-energy personality with a passion for learning and winning.
⦁ Detail-oriented outlook.
⦁ Demonstrated resiliency.
⦁ Committed to others, i.e. service-minded.
⦁ Must exhibit intellectual curiosity, strive for continuous improvement, and have excellent problem-solving skills.
⦁ Goal-oriented self-starter who enjoys taking initiative and seeing results.
⦁ Practices sound judgment and enjoys accountability.
⦁ Strong analytical thinker.
⦁ Strong communications abilities: oral and written.
⦁ Team player mentality.