NAME: JERUSHA NAIDOO STUDENT NUMBER: 51458144 MODULE: PST311L ASSIGNMENT: 1 DUE DATE: 03 MARCH 2017QUESTION 1 (@) The product A product may be defined as a combination of utilities which satisfy needs and are offered by the business to the consumers. The consumers can take note of it, obtain it and use it. When establishing a new (own) business the entrepreneur should, in his/her choice of product, concentrate on consumer products. These products are im- mediately available for use. Firstly, consumer products can, depending on their durable qualities (characte- tistics), be divided into durable and non-durable products. The durable products (eg furniture) are used over long periods, while non-durable consumer products (eg sweets) have a short lifespan. Secondly, these products can, on the basis of consumer purchasing habits, be divided into convenience, selective and speciality products. Convenience products (eg groceries) are products which the consumer knows well. Selective products (eg jewellery) are products which the consumer wants to compare at several shops for suitability, quality, price and style, before deciding on what to purchase. Speciality products (eg motor cars) are products with unique characteristics which some consumers will make a special effort to purchase. Other aspects which consumers consider when deciding on a product are trade marks and packaging (b) The price Price may be defined as the amount of money the consumer hands over in ex- change for a product. Price is closely related to the value and use the consumer obtains in exchange for the money sacrificed. The price of a product is determined by taking into account, among others, the following factors: the cost price of the product the running costs of the business a reasonable profit, competitors’ prices demand/supply (0) The place The place where the business is situated also plays an important role, Consumers prefer to purchase their necessities at businesses situated near their homes. Other reasons that contribute towards the popularity of a business are the following, sufficient parking areas reasonable prices good quality products helpful and courteous service sufficient security information service available clean and neat in and about the shop sufficient space for movement between the shelves ee eceeee(@) Promotion Promotion may be defined as all the techniques used to create a demand for a new Product, or to increase or maintain an established demand for a known product. The main purpose (objective) of promotion is to inform, remind or persuade consumers to purchase the products/services of the business. Promotion can be divided into the following activities (elements): * Advertising. This is mass communication that takes place on an impersonal level, for which an identifiable sponsor pays. * Personal sales. This is communication from person to person where the busi- ess, for example, tries to convince a potential consumer to buy their product Sales representatives fulfil an important role in personal sales. * Sales promotion methods. This is the personal and impersonal short-term en- couragement of consumers to purchase a product. Free samples, competitions, bonus articles and discount coupons are examples. * Publicity. This is impersonal stimulation of the demand for a product by sup- plying newsworthy information to the mass media. In this way favourable and “free” news coverage is obtained. Forms of this publicity are, for example, sponsorship and news conferences.QUESTION 2 °—the economic problem. This characteristic concen wnnces in society. It attempts to contextualise th unlimited wants and needs against ite limited resoi Wr es the legacy of injustice in South Africa and i well as South Africa's citizens, * The economic cycle. This characteristic Covers the flow of money, goods and »_ the government and the foreign ies of the various participants in the ns the distribution of re- @ phenomena of society's urces. It simultaneously ex- its effects on the economy as ceria ty faitly. while pursuing the principles of an open market and profit- ability. = fegetiation, motivation, delegation and conflict management — basic aspects of management, such as administration, finance and — Marketing, purchasing, public relations and the development of human resources Tights and responsibilities of management and workers . sonnet knowledge and skills, This characteristic introduces accounting, personal finances, and consu mer knowledge and skills.31 32 QUESTION 3 Reasons why entrepreneurs are important to the economy There are many reasons why entrepreneurs are important to the economy. Here are the four most important reasons: © Entrepreneurs create job opportunities. \n countries all over the world small businesses, especially in the informal sector, create more jobs than large com- panies. « Entrepreneurs initiate the production process. They ate responsible for produ- cing goods and services. The entrepreneur combines labour, capital technology and raw materials or components in the production process. The production process has a wide range of meaning, and includes trading activities (eg selling groceries at a spaza shop) or rendering services (eg babysitting) ‘© Without entrepreneurs natural resources remain underground and undeveloped, Entrepreneurs are needed to build the economy of a country. South Africa may be rich in natural resources like diamonds, gold, oil, coal, et cetera, but re- member that a country does not need natural resources to build a strong economy and increase its wealth, Most of the countries in the Far East have few natural resources but most of their citizens are entrepreneurs, for example Ja- panese entrepreneurs import raw materials, process them and then export them. throughout the world (as they do with iron ore) ¢ Entrepreneurs are catalysts to generate wealth and a higher standard of living. This is an outstanding feature of the free market system as compared with socialism. Entrepreneurs usually employ other people, which improves their standard of living. In buying products from other businesses, entrepreneurs benefit those businesses. For 12 years learners have to sit still and listen to teachers who tell them what and how to learn, and how to do things. The education system puts too much emphasis on conformity; it does not teach learners to think positively and dy- namically, © Teachers as well as parents are very set on academic performance and high marks. Learners are taught from an early age to give correct answers, and dif- ferent or innovative thinking is often discredited. «Perseverance is hardly emphasised, especially in primary school. Furthermore, personality development is bound by the limitations placed on individuality and the development of creativity (Kent 1990:14) MOTIVATING FACTORS + want to do their own thing want to be in charge of themselves want to make their own money identify business opportunities cannot find jobs or are unemployed are retrenched and cannot find jobs want to break away from boring jobsQUESTION 4 141 The rights of the consumer > The right to correct information-all consumers must be protected against dishonest and misleading information > The right to safety-consumers have the right to buy safe products > The right to free choice-consumers should be able to choose between a variety of products > The right to obtain products or services at realistic prices > The right to make their needs known-consumers should be able to voice their needs as to the kinds of products they want and the quality they expect 4,2 Buying and selling > Every time that goods are bought or sold, the buyer and the seller have to reach an agreement which is known as a sales agreement or sales contract > Before a sales agreement is binding on the seller and the buyer, they have to agree on the following © The article which is bought © The price to be paid > If goods are bought to be transported and a freight rate is charged, the buyer and seller should agree if the freight rate should be included in the price. Following quotations of prices in sales contracts: * Local price. This price does not include transport costs. The buyer has to pay the transport costs. ‘* Free on rail (FO R). The seller pays the transport costs to the seller’s station. ¢ Rail charges paid. The price includes the rail charges, which the seller pays Sellers can indicate the quality of their goods as follows: > Adescription. The seller describes the quality of the article. > Asample. The seller sends an ex ample or a small part of the goods to the buyer, for ex ample soap, material, toothpaste, wood or wool. This part or sample has the same quality as the goods that will be bought. > Atrademark: special mark or sign on the product. This mark must be registered and may not be used by other sellers. The use of the trademark allows the seller to show that all his products are of the same standard. » Consumers have the right to demand high quality products44 The production of goods and services in order to provide for our needs, goods have to be produced. These days we all do only those tasks that we have been trained for. We are paid in money for doing these tasks and Wwe use the money that we earn to buy goods to satisfy our needs and wants Certain production factors are needed in order to produce goods/services, Production factors are combined to produce completed articles which can be bought by people to supply their needs. The four production factors needed to produce goods/services are as follows : * Natural resources or raw materials © Work or labor + Money or capital * Entrepreneurship 445 The consumer and the retailer Retailers fulfil a very important function in satisfying human needs because they handle the collecting, storage and distribution of the articles that consumers need, Listed below are examples of some of the important services rendered to consumers. > Retailers bring the B0ods within easy reach of the consumers > They sell goods according to the quantity required by consumers. ® Shopkeepers grand credit to clients until they receive their salaries or wages. Shopkeepers learn to advise consumers on the goods they choose by assessing their clients tastes and needs. This allows consumers to personally attend to their clients. > Retails provide daily needs to clients which include things such as making fresh bread, milk, fruit and vegetables available to them. v