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Investigate market as relationships between businesses and customers.

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Introduction

In this report, I am going to investigate business and economics in selected businesses. In this first task my learning outcome is as follows - Investigate market as relationships between businesses and customers. This report is going to fulfill this learning outcome by investigating the fast food restaurant McDonalds and by researching supply and demand schedules and what factors affect them. A Market is any place or process that brings together buyers and sellers with a view to agreeing a price. There are many different markets within the uk. They include - 1. Organised markets - commodities e.g. rubber, oil, sugar, wheat, gold, copper, etc. 2. Financial markets - stocks, shares, currencies, financial instruments 3. Goods markets - the supply and demand of goods and services in general, food, clothing, leisure, houses, cars, etc. 4. Factor markets - the supply and demand of factors of production - land, labour and capital McDonald's marketplace is the goods market. They supply fast food worldwide. McDonalds is a PLC, and offers fast food as its main product. McDonald's is the largest food service company in the world. The company regards itself as the leading global food service retailer. It achieves this by being a franchise. a franchise is basically paying to trade under a brand name such as McDonalds. So if people want to open a restaurant and don't want to risk it being unsuccessful then they would buy a franchise. This way McDonalds can be sold all over the world and become an international brand name. With more than 30,000 restaurants serving more than 47 million people each day in 121 countries. In 1974 McDonald's opened its first restaurant in the UK. As of 31 December 2001, McDonald's and its franchisees operated over 1,184 restaurants in the UK. As well as its purpose to serve the public with fast food, McDonald's purpose is to grow as a company, and also obviously make maximum profit. ...read more.

Middle

These are essentially price changes and therefore cause movements along the demand schedule. Here is an example of how a special offer can cause demand to change - The first time McDonalds had a special promotion on the Big Macs; they underestimated its popularity and therefore run out of the product. This caused people to change their mind about going to McDonald's altogether and go to somewhere like subway. Here is what the demand schedule would look like if this happened - McDonalds Subway 4. Promotion - making people aware that a product exists costs money but if it works and makes people buy the product then they can recoup the profits to outweigh the costs. This would be how the demand schedule would change after a UK wide TV advert - Supply Schedule Changes in any of the factors other than price cause a shift in the supply curve. > A shift in supply to the left - the amount producers offer for sale at, every price will be less > A shift in supply to the right - the amount producers wish to sell at, every price increases The supply curve slopes upwards from left to right indicating a positive relationship between supply and price. As price rises, it encourages producers to offer more for sale whereas a fall in price would lead to the quantity supplied to fall because consumers aren't buying them; therefore the cost to produce isn't worthwhile for the profit and returns. Changes in any of the factors affecting supply other than price will cause the entire supply curve to shift. A shift to the left results in a lower supply at each price; a shift to the right indicates a greater supply at each price. Factors affecting supply 1. Research and development - McDonald's uses research and development top create new product ideas. Therefore they need to spend money on research and development to ensure that these new products match the needs of the target audience and will increase profits. ...read more.

Conclusion

Trading Standards Officers enforce a wide range of consumer related legislation, for example the Consumer Protection Act 1987, Weights and Measures Act 1985, the Trade Descriptions Act 1968 and the Consumer Credit Act 1974.The job can involve things like visiting premises to ensure that everything is legal whilst giving advice to traders and consumers, and investigating complaints of breaches of legislation. > Consumer association (eg. Which?) - Which? Fights for consumers' rights in two ways. They campaign to make sure consumers get treated fairly. And they publish magazines, books and websites to help people make the right choice for them. Which? Magazine was launched in 1957 by Consumers' Association, an independent charity. Following a review in 2004, the whole organisation now works under the Which? name. > TV (Watchdog) - Watchdog is a BBC television series that investigates viewers' reports of problematic experiences with traders, retailers, and other companies around the UK. It has had great success in changing the awareness consumers have of their purchasing rights and in changing policies of companies, closing businesses down and pushing for law changes. Conclusion Within the UK, consumers purchase a wide variety of products and services on a regular basis. Economists can depict levels of demand for each product and service using the demand schedule. Likewise they can depict the quantity a supplier is willing to sell at each price level using the supply schedule. Within the UK there are a wide variety of markets. Ideally these markets should be in equilibrium i.e. demand=supply. In reality however, many of these markets are not in equilibrium but the market mechanism is used to clear them. As consumer income levels have increased so has the quantity of goods and services that consumer buys. To prevent them from being exploited the government has created a number of protection organizations whose roles vary and will be discussed in more detail in section 2 of this report. ?? ?? ?? ?? 1 Martyn Fox Task 1 Business and Economics ...read more.

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