Acknowledgments  xiii

About the Authors  xiv

Chapter 1: Exploring the World of Business and Economics  2

 Inside Business: Tesla Races Ahead of the Competition  3

1-1 Your Future in the Changing World of Business  4

1-1a Why Study Business?  5

Exploring Careers: Gen Z Seeks Workplace Diversity  6

1-1b Special Note to Business Students  8

1-2 Business: A Definition  9

1-2a The Organized Effort of Individuals  9

1-2b Satisfying Needs  10

1-2c Business Profit  11

1-3 Types of Economic Systems  12

Entrepreneurial Success: The Next Wave of Entrepreneurs Is Here  14

1-3a Capitalism  14

1-3b Capitalism in the United States  15

1-3c Command Economies  17

1-4 Measuring Economic Performance  18

1-4a The Importance of Productivity in the Global Marketplace  18

1-4b The Nation’s Gross Domestic Product  19

1-4c Other Important Economic Indicators That Measure a Nation’s Economy  20

1-5 The Business Cycle  20

1-6 Types of Competition  22

1-6a Perfect Competition  23

1-6b Monopolistic Competition  24

1-6c Oligopoly  25

1-6d Monopoly  25

1-7 American Business Today  26

1-7a Early Business Development  26

1-7b Business Development in the 1900s  27

1-7c A New Century: 2000 and Beyond  28

1-7d The Current Business Environment  28

Technology and Innovation: Today’s Biggest Tech Trends  30

1-7e The Challenges Ahead  31

Summary  32

Key Terms  33

Discussion Questions  33

Case 1: The Keys to Zoom’s Success  34

Building Skills for Career Success  35

Chapter 2: Ethics and Social Responsibility in Business  36

 Inside Business: Marketing Tactics at Purdue Fueled the Opioid Crisis  37

2-1 Business Ethics Defined  38

2-2 Ethical Issues in Business  38

2-2a Fairness and Honesty  38

2-2b Organizational Relationships  39

2-2c Conflicts of Interest  40

2-2d Communications  41

Entrepreneurial Success: Building a Healthy Relationship with Social Media  41

2-3 Factors Affecting Ethical Behavior  42

2-3a Individual Factors Affecting Ethics  42

2-3b Social Factors Affecting Ethics  42

2-3c Opportunity as a Factor Affecting Ethics  43

2-4 Encouraging Ethical Behavior  43

2-4a Government’s Role in Encouraging Ethics  43

2-4b Trade Associations’ Role in Encouraging Ethics  44

2-4c Individual Companies’ Role in Encouraging Ethics  44

Exploring Careers: The Rise of the Chief Ethics Officer  46

2-5 Social Responsibility  47

2-5a The Evolution of Social Responsibility in Business  48

2-5b Two Views of Social Responsibility  49

2-5c The Pros and Cons of Social Responsibility  50

2-6 Public Responsibilities of Business  51

2-6a Consumerism  51

Ethics and Social Responsibility: Google Sued for Antitrust Violations  52

2-6b Public Health  53

2-7 Responsibilities to Employees  55

2-7a Affirmative Action Programs  55

2-7b Training Programs for the Hard-Core Unemployed  56

2-7c Programs to Reduce Sexual Harassment and Abusive Behavior  57

2-8 Responsibilities to the Environment  58

2-8a Environmental Issues  58

2-8b Effects of Environmental Legislation  59

2-8c Business Response to Environmental Concerns  60

Sustaining the Planet: Is Sustainability Profitable?  61

2-9 Implementing a Program of Social Responsibility  62

2-9a Commitment of Top Executives  62

2-9b Planning  62

2-9c Appointment of a Director  62

2-9d The Social Audit  63

Summary  63

Key Terms  64

Discussion Questions  64

Case 2: Inside Whole Trade at Whole Foods  65

Building Skills for Career Success  65

Chapter 3: Global Business  67

Inside Business: Starbucks Goes Global for Growth  68

Entrepreneurial Success: Alibaba Provides Guidance to Help Entrepreneurs  69

3-1 The Basis for International Business  69

3-1a Absolute and Comparative Advantage  69

3-1b Exporting and Importing  70

3-1c Balance of Trade  70

3-1d The Economic Outlook for Trade   73

Technology and Innovation: Spotify Makes a Play for Global Dominance  75

3-2 Methods of Entering International Business  76

3-2a Exporting  76

3-2b Licensing and Franchising  78

3-2c Contract Manufacturing  79

3-2d Joint Ventures and Alliances  79

3-2e Direct Investment  80

3-2f Multinational Firms  80

Sustaining the Planet: IKEA Opens Its First Second-Hand Store  81

3-3 International Business Challenges  81

3-3a Trade Restrictions  81

3-3b Economic Challenges  84

Ethics and Social Responsibility: Opening the Gates to Digital Payments  85

3-3c Legal and Political Climate  85

3-3d Social and Cultural Barriers  85

3-4 Facilitators of International Trade   86

3-4a The General Agreement on Tariffs and Trade and the World Trade Organization 86

3-4b International Trade Agreements and Alliances  86

3-5 Sources of Export Assistance  89

3-6 Financing International Business  90

3-6a The Export-Import Bank of the United States  90

3-6b The World Bank  91

3-6c The International Monetary Fund  91

Summary  92

Key Terms  93

Discussion Questions  93

Case 3: Honda’s Strategy Is Electrifying  93

Building Skills for Career Success  94

Running a Business: Let’s Go Get a Graeter’s!  96

Building a Business Plan  97

Chapter 4: Building Customer Relationships Through Effective Marketing  101

Inside Business: Netflix Tops the Competition in Customer Retention  102

4-1 Managing Customer Relationships  103

Sustaining the Planet: Customer Feedback Pushes Native to Go Plastic-Free  104

4-2 Utility: The Value Added by Marketing  105

4-3 The Marketing Concept  106

4-3a Evolution of the Marketing Concept  106

4-3b Implementing the Marketing Concept  107

4-4 Markets and Their Classification  108

4-5 Developing Marketing Strategies  108

4-5a Target Market Selection and Evaluation  108

4-5b Creating a Marketing Mix  111

4-6 Marketing Strategy and the Marketing Environment  113

4-7 Developing a Marketing Plan  114

4-8 Market Measurement and Sales Forecasting  115

4-9 Marketing Information  115

4-9a Collecting and Analyzing Marketing Information  115

Exploring Careers: Trend Alert: Market Research Analysts Are in High Demand  116

Technology and Innovation: TikTok Uses AI and Big Data to Keep Users Coming Back for More  117

4-9b Marketing Research  118

Ethics and Social Responsibility: Marketers Must Embrace Data Ethics  120

4-10 Types of Buying Behavior  120

4-10a Consumer Buying Behavior  120

4-10b Business Buying Behavior  122

Summary  122

Key Terms  124

Discussion Questions  124

Case 4: Starbucks Brews Customer Satisfaction  124

Building Skills for Career Success  125

Chapter 5: Creating and Pricing Products That Satisfy Customers  127

Inside Business: Petco Rebrand Focuses on Pet Health and Wellness  128

5-1 Classification of Products  129

5-1a Consumer Product Classifications  129

5-1b Business Product Classifications  130

5-2 The Product Life Cycle  131

5-2a Stages of the Product Life Cycle  131

Sustaining the Planet: Consumers Go Flexitarian with Fake Meat  132

5-2b Using the Product Life Cycle  134

5-3 Product Line and Product Mix  134

5-4 Managing the Product Mix  134

5-4a Managing Existing Products  135

Exploring Careers: Are You Ready for a Career in Product Management?  136

5-4b Deleting Products  136

5-4c Developing New Products  137

Technology and Innovation: High-Tech Is High Fashion  139

5-4d Why Do Products Fail?  139

5-5 Branding, Packaging, and Labeling  140

5-5a What Is a Brand?  140

5-5b Types of Brands  140

5-5c Benefits of Branding  141

5-5d Choosing and Protecting a Brand  142

5-5e Branding Strategies  143

5-5f Brand Extensions  143

5-5g Packaging  143

5-5h Labeling  145

5-6 Pricing Products  145

5-6a The Meaning and Use of Price  145

5-6b Price and Non-Price Competition  146

Ethics and Social Responsibility: Companies Rebrand to Be More Sensitive  147

5-6c Buyers’ Perceptions of Price  147

5-7 Pricing Objectives  147

5-7a Survival  148

5-7b Profit Maximization  148

5-7c Target Return on Investment  148

5-7d Market-Share Goals  148

5-7e Status-Quo Pricing  148

5-8 Pricing Methods  149

5-8a Cost-Based Pricing  149

5-8b Demand-Based Pricing  150

5-8c Competition-Based Pricing  151

5-9 Pricing Strategies  151

5-9a New-Product Pricing  151

5-9b Differential Pricing  152

5-9c Psychological Pricing  153

5-9d Product-Line Pricing  154

5-9e Promotional Pricing  154

5-10 Pricing Business Products  155

5-10a Geographic Pricing  155

5-10b Transfer Pricing  155

5-10c Discounting  155

Summary  156

Key Terms  158

Discussion Questions  158

Case 5: Shinola Is One to Watch  159

Building Skills for Career Success  159

Chapter 6: Distributing and Promoting Products  161

Inside Business: Walmart Brings Its Buying Teams Together  162

6-1 Distribution Channels and Market Coverage  163

6-1a Commonly Used Distribution Channels  163

6-1b Level of Market Coverage  165

6-2 Partnering Through Supply Chain Management  165

Sustaining the Planet: Millennials Take a Shining to Ethically Sourced Diamonds 166

6-3 Marketing Intermediaries: Wholesalers  166

6-3a Wholesalers Provide Services to Retailers and Manufacturers  167

6-3b Types of Wholesalers  167

6-4 Marketing Intermediaries: Retailers  168

6-4a Online and Multichannel Retailing  168

6-4b Types of Retail Stores  169

6-4c Types of Shopping Centers  171

6-4d Nonstore Retailing  172

6-5 Logistics  174

Technology and Innovation: Drone Delivery Takes Off  174

6-5a Inventory Management  175

6-5b Order Processing  175

6-5c Warehousing  175

6-5d Materials Handling  176

6-5e Transportation  176

6-6 What Is Integrated Marketing Communications?  177

6-7 The Promotion Mix: An Overview  178

6-8 Advertising  179

6-8a Types of Advertising by Purpose  179

6-8b Major Steps in Developing an Advertising Campaign  180

6-8c Advertising Agencies  182

Exploring Careers: How to Land a Job in an Advertising Agency  183

6-8d Social and Legal Considerations in Advertising  183

6-9 Personal Selling  184

6-9a Kinds of Salespersons  184

6-9b The Personal-Selling Process  185

6-9c Major Sales Management Tasks  186

6-10 Sales Promotion  186

6-10a Sales Promotion Objectives  186

6-10b Sales Promotion Methods  187

6-10c Selection of Sales Promotion Methods  188

6-11 Public Relations  188

6-11a Types of Public Relations Tools  188

Entrepreneurial Success: Inside BODEN, an Award-Winning, Latina-Owned PR Company  189

6-11b Uses of Public Relations  190

Summary  190

Key Terms  192

Discussion Questions  192

Case 6: Casper Thinks Inside the Box  192

Building Skills for Career Success  193

Running a Business: Graeter’s

Is “Synonymous with Ice Cream”  195

Building a Business Plan  196

Chapter 7: Exploring Social Media and e-Business  199

Inside Business: Netflix Tops the Competition in Customer Retention   200

7-1 Why Is Social Media Important?  201

7-1a What Is Social Media and How Popular Is It?  201

7-1b Why Businesses Use Social Media  201

7-2 Social Media Tools for Business Use  203

7-2a Business Use of Blogs  203

Exploring Careers: HBO Max Interns Rock TikTok  204

7-2b Photos, Videos, and Podcasts  204

7-2c Social Media Ratings  205

7-3 Achieving Business Objectives Through Social Media  206

7-3a Social Media Communities  206

7-3b Crisis and Reputation Management  207

7-3c Listening to Stakeholders  208

Technology and Innovation: VW’s April Fools’ Day Prank Backfires  208

7-3d Targeting Customers  209

7-3e Social Media Marketing for Consumers  209

7-3f Social Media Marketing for Other Businesses  210

7-3g Generating New Product Ideas  211

7-3h Recruiting Employees  212

7-4 Developing a Social Media Plan  212

7-4a Steps to Build a Social Media Plan  212

7-4b Measuring and Adapting a Social Media Plan  214

7-4c The Cost of Maintaining a Social Media Plan  216

7-5 Defining e-Business  216

7-5a Organizing e-Business Resources  217

7-5b Satisfying Needs Online  217

Entrepreneurial Success: Why Small Businesses Like Shopify  218

7-5c Creating e-Business Profit  219

7-6 Fundamental Models of e-Business  220

7-6a Business-to-Business (B2B) Model  220

7-6b Business-to-Consumer (B2C) Model  221

7-7 The Future of the Internet, Social Media, and e-Business  222

7-7a Internet Growth Potential  222

7-7b Ethical and Legal Concerns  223

Ethics and Social Responsibility: California Ups the Ante on Privacy Protection 224

7-7c Future Challenges for Computer Technology, Social Media, and e-Business  225

Summary  226

Key Terms  228

Discussion Questions  228

Case 7: Target’s Big Bet on Digital  228

Building Skills for Career Success  229

Endnotes  231

Glossary  237