Key Business Concepts: Factors, Products, and Finance
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Key Business Concepts
Economic Factors
Differentiating factor: Price can be a decisive factor for a product. For example, a cafeteria can be oriented based on price, class, or other demographics.
Practical Factors
Practical factors, such as comfort and confidence, can influence purchase decisions. An example of this is home delivery.
Aesthetic Factors
Aesthetic factors, like an attractive package, color, and size, can appeal to customers.
Technical Factors
Consider what unique features your product offers compared to others.
Psychological Factors
Psychological factors relate to social status and fashion.
Product
A product is anything offered for consumption in the market.
Product Levels
- Basic: The core need the consumer expects to satisfy.
- Formal: Something tangible.
- Expanded: The formal product with added benefits.
Types of Products
- Tangible Capital Assets: Physical objects that can be durable or non-durable.
- Services: Intangible offerings that satisfy a market need.
According to Purpose/Consumption
- Consumer Products: Products purchased by individuals for personal use.
- Industrial Products: Products purchased by companies.
Product Life Cycle
- Introduction: Launch period.
- Growth: Sales begin to rise.
- Maturity: Sales are high.
- Decline: Sales decrease when the product fails to sell (see graphic).
Target Market
The group of potential buyers you are trying to convert into customers. Market segmentation is used to achieve this.
SWOT Analysis
An analysis of Weaknesses, Threats, Strengths, and Opportunities helps a company determine its business strategy.
Finance
Difference Between Credit and Loans
A loan is usually a medium-term operation paid in regular monthly installments. Credit is a deposit in a restricted account until needed.
Leasing
Leasing is a type of financing; a financial lease. It involves renting a property for a specified time with an option to buy.
Financing Sources
- Confirming: Allows you to pay without having the funds immediately available.
- Credit Account: The bank creates a credit account and specifies the repayment period.
- Overdraft: The bank may accept an overdraft depending on the company's creditworthiness.