Sunday 8 August 2010

Scope of commerce

COMMERCE


 Commerce is the study of business activities

 Commerce is a division of trade or production which deals with the exchange of goods and services from producer to final consumer

 The producer is a person who produced or made goods.

 The consumer is a person who used the goods or bought the goods

Commerce divided into two:
1) Trade

2) Aids to Trade
under trade is divided into two:
1. Home
2. Foreign

Under aids to trade is divided into

1.Banking


2.Warehousing

3.Advertising

4.Transport

5.Insurance

6.Communication



Trade


 Trade is the voluntary exchange of goods, services, or both

 The original form of trade was barter, the direct exchange of goods and services but Modern traders use money instead as a medium of exchange



Trade is divided into:

1. Home Trade

2. Foreign Trade

Under home trade:
1.Wholesale

2.Retail

Under foreign trade
1.Import
2.Export



Home Trade (also known as local trade)

 Trade which is carried on within the country is known as home or local trade or domestic trade
 Home trade is divided into two

1. Wholesale – A trader who buys in bulk (large quantities) from the producers and sell it in small quantities to the retailers or straight to the customers.

2. Retailers – A trader who buys in small quantities from the wholesales or produces and then sells it to the customers.



Foreign Trade (also known as International trade)
 Foreign Trade or International trade is the exchange of goods and services across national borders

 Foreign Trade is divide into two:

1. Import – The buying of goods from foreign countries and sale it locally

For example: Cars, Vegetables, fruits, mobile phone

2. Export – The selling of local goods to foreign countries

For example: Oil, Gas, and Prawn



Aids to Trade is divided ito 6:
1. Banking – It help to finance trade

a. Provide a safe place to keep his/her money

b. Providing banking facilities

c. Lending money in the form of a loan, bank overdraft


2. Transport – The moving of goods from one place to another (from the factory to the shop or from the shop to the consumer)

a. Land

b. Water

c. Air


3. Warehouse – It is for storage of goods

a. Crops like padi and wheat are seasonal crops therefore they have to stored to ensure a continuous supply in the market throughout the year

b. Cold storage can be a storage for perishable goods like fish, meat and fruits



4. Insurance – it’ll protect the trader from risk or losses

Examples of risks or losses are theft, robbery, fire, accidents or float



5. Advertising – It’s a way to tell the public about the new goods and services

Examples of advertising are newspaper, magazines, radio, television, banner and cinema

6. Communication – It’s a process that allows people to exchange information among each other

Example: Telephone, internet, radio and television



Human Needs and Wants



1. Different people have different needs and wants.

2. Basic Needs are what man cannot do without for example
food

shelter

and clothing


3. Wants are the man desires to have in order to make their living more comfortable but he/she can do without. For examples, hand phone, computer, cars and so on



GOODS AND SERVICES

 Goods are MATERIAL things that man needs or wants, for examples bicycles, books, shoes, television, house, an expensive car etc.


 Services are NON-MATERIAL things that man needs or wants for examples

education, entertainment, medical care, recreation, a hair cut, etc.
 Goods and services which man may need for himself are called Individual wants, e.g. a bowl of rice, a book, a bicycle, a pen, a haircut, a car etc.


 Goods and services which man may need or want for himself and others in his community are called Collective wants, e.g. school, hospital, police station, airport, road, mosque, etc.



Production/Industry



Production is defined as producing goods or services that we can eat or use.

 For examples, Gardenia bakery produces bread, soft drinks company produces drinks like Coca-cola or Pepsi and a hair salon shop provides hair cut services for customers.

 There are three main categories of production namely



Production or Industry


1.Primary -Extractive


2.Secondary - Manufacturing


 

3.Tertiary - Commercial and Direct personal




Primary production/industry



 The primary production/industry generally involves changing natural resources to primary goods

 For example of this industry: agriculture, fishing, forestry, mining and quarrying industries

 The people who are employed/work in this industry are said to have extractive occupations


Secondary production/industry



 The secondary production/industry generally involves with manufacturing and construction where they create a finished, usable product

 This industry generally takes the raw materials from the primary industry and manufactures into finished goods

 The people who work in this industry are said to have a manufacturing and constructive occupations

 Manufacturing occupation are the people who engaged in turning or converting the raw materials which been taken from natural into finished or semi finished goods or products

 Constructive occupation is the people engaged in the building of houses, shops, hospitals, road, factories, canals etc.

 Examples of people engaged in secondary production are factory worker, car assembler, bricklayer and carpenter.




Tertiary production/industry



 Tertiary production refers to the provision of services which includes commercial and direct services.

 Examples of people working in the commercial industry are advertising agent, insurance agent, banker and truck driver.

 Examples of people engage in direct services are lawyers, doctors, and teachers.

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