Question

Define Business and explain in detail the resources needed to start and operate a business. Explain how a fashion business functions in order to understand and satisfy consumer wants and needs.

Answer 1

Business is an activity which is conducted to maximize profits and includes exchange of goods and services.

To start a business we need four factors of production which is land, labor, capital and entrepreneurship.

Land includes physical space, Labor includes people able to transform resources into goods, Entrepreneurship includes the idea and motivation for creating a valuable good or service for people to buy and Capital includes the physical investment into machinery and equipments.

Apart from this we need financial, educational and emotional resources as well.

The fashion industry adopts the marketing concept when it takes steps to know as much about the consumer as possible, coupled with a decision to base marketing, product, and even strategy decisions on this information.

The fashion industry operates in a highly competitive market where wrong pricing decisions can make their customers to switch to something else as there are large numbers of sellers in the market.

Hence, this industry first identifies the target market and then diversify both business strategies and marketing approaches in order to satisfy the needs of consumers.

The industry also follows the price discrimination where appropriate variety and price discounts are given according to diversity in target market.

Firms generally segment their market and follows third degree price discrimination. By interpreting consumer demand, firms tries to satisfy wants of their customers.