There are two concepts of business:
1. Old or traditional concept of business
2. Modern or new concept of business
1. Traditional concept of business
Traditional concept states that the objective of business is to earn profit through production and marketing of products.
Products can be:
a. Goods. They are physical goods. They can be owned. They are tangible and can be touched. Examples are books, computer, clothes etc.
b. Ideas: They are ideas based on knowledge. Examples are environment protection, human rights, consumer welfare etc.
c. Services: They cannot be owned. They are intangible and cannot be touched. Examples are class lecture, banking service etc.
d. Places: They are specific places such USA, London, Delhi etc.
e. Persons: They are celebrities, such as politicians, movie stars, sports persons etc.
f. Information: They are data-related activities. Examples are research, newspapers, internet etc.
2. Modern concept of business
Modern concept states that business earns profit through customers satisfaction. Business without consumers is not business. It develops long term relations with customers. Business should earn profit with social responsibility. It should care about the welfare of society and consumers. it must work within the law.
Business encompasses all economic activities involving production and marketing of products to earn profit and wealth through satisfaction of human needs.
The main points in the concept of business are as follows:
* Business is money-oriented organized economic activity
* Business produces and markets products
* Business makes profit to acquire wealth
* Business satisfies customers needs by creating utilities.
* Business behaves legally with social responsibility.
* Business works within the law.
Modern concept states that business earns profit through customers satisfaction. Business without consumers is not business. It develops long term relations with customers. Business should earn profit with social responsibility. It should care about the welfare of society and consumers. it must work within the law.
Business encompasses all economic activities involving production and marketing of products to earn profit and wealth through satisfaction of human needs.
The main points in the concept of business are as follows:
* Business is money-oriented organized economic activity
* Business produces and markets products
* Business makes profit to acquire wealth
* Business satisfies customers needs by creating utilities.
* Business behaves legally with social responsibility.
* Business works within the law.
