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Title: o level notes
Description: it helps to those are studying business studies and mathematics
Description: it helps to those are studying business studies and mathematics
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Production and Commerce
Chapter 1
What is commerce?
Commerce is study related to distribution of products from the producer (point of
production) to the consumer (point of consumption)
...
Production is any activity which serves to satisfy human needs and wants
...
Consumers are the ultimate users of goods and services produced
...
Utility of place: Any activity that transfers the goods or services to a location which is
within easier access to the consumer, for example transfer of goods from far off factories to
nearby retail shops
...
Needs and Wants
Needs are the things necessary for living, that is food, shelter and clothing
...
Specialization/Division of Labor
Specialization or Division of Labor is breaking down of a productive activity into simpler
tasks so that a person specialist in that task can perform it
...
• Increased output per worker
...
• Economy of scale can be achieved (low average cost of product)
...
• Better quality of products
...
• Saving of tools and equipment
...
O-Alevel
...
Disadvantages of Specialization
• Work becomes boring
...
• Decline in craftsmanship
...
• Standardized output, choice of customers decreases
...
Forms of Specialization
Specialization at country level occurs when a certain country devotes itself mainly to
produce certain products which it exports to other countries
...
Specialization at town level occurs when a particular city in a country devotes its self in
producing certain types of products, which is used by all the country
...
Branches of Production
Primary Production
•
•
•
•
•
First Stage of production
...
Includes Extractive Industries for example mining, quarrying
...
Products are in unusable state, so they are moved to secondary stage of production
...
Secondary production is making goods from raw materials
...
Products are ready to use, but are at wrong place, so moved at tertiary stage
...
It assists industry to function, by providing commercial services and direct personal
services
...
O-Alevel
...
Direct Personal Services: Provision of personal services directly to the consumer
without anyone else involved for example teacher, actor and tailor
...
Note: Production is completed only when goods reach point of consumption
...
Climate: A farmer must ensure that crop is planted to a area where climatic
conditions allow the production of that crop for example temperature and rainfall
...
Nature of land: A farmer must select land which is flat and fertile
...
Access to markets: A farmer must have a farm near to the market or customers,
because most of agricultural products are perishable (for example sugar cane)
...
4
...
5
...
Manufacturing Unit
1
...
2
...
3
...
4
...
5
...
How are manufacturing and tertiary activities inter-related?
•
•
Manufacturing is concerned with producing goods from raw materials, tertiary
activities are concerned with the distribution of finished goods from the factory to
the final consumer
...
O-Alevel
...
Manufacturing would not be able to take place as goods would be stockpiled and so
it is dependent on tertiary activities to get the goods to the right person at the right
time
...
The manufacturer may set up some of the tertiary activities himself – advertise, have
warehouses, have his own transport he may also have his own retail outlet, e
...
factory shop but usually he sells to wholesaler or retailer
...
The manufacturer will need to insure the factory/its contents against risk, e
...
public
liability, employer’s liability
...
O-Alevel
...
Foreign Trade is buying and selling of goods and services across the globe
...
1
...
3
...
5
...
Aids to Trade
Banking
Transport
Communication
Insurance
Warehousing
Advertisement
Function
Provides Finance and Services
...
To transmit and receive information quickly
...
Provides storage facilities
...
Comparison of Home Trade and Foreign Trade
Similarities between Home Trade and Foreign Trade
1
...
3
...
5
...
Serve mankind by satisfying needs and wants
...
Require surplus to be created
...
Dissimilarities between Home Trade and Foreign Trade
1
...
3
...
5
...
7
...
9
...
Home Trade
Done within national boundaries
...
Same units of measurements
...
No taxes are involved
...
Same culture and language
Mode of Payment is cash, cheque etc
...
Small and big quantities are involved
...
O-Alevel
...
Different currencies are involved
...
Different government policies
...
Complex Documents
...
Mode of payment is online transfer, bill of
exchange etc
...
Only large quantities are involved
...
Home trade can be divided into wholesale trade and retail
trade
...
Wholesaler is a intermediary distributer
...
A Retailer is a intermediary
distributer
...
Channel of distribution ends when goods are delivered to the point of consumption
...
Different Channels of Distribution
1
...
2
...
3
...
4
...
Overseas producer appoints a agent in home
market
...
O-Alevel
...
Producer capabilities
Can producer open his own retail outlets?
2
...
Type of customer
Own use: from retailer
Business use: from producer
4
...
Nature of product
Perishable: small channel
Long shelf life: long channel
6
...
Size of market
Small: small channel
Large: long channel
8
...
Always looking for good source of supply
...
Further bulk breaking, and selling in smaller quantities
...
Offers variety of goods from different producers
...
They sell to the end customer
...
Might be involved in branding and packing
...
Might provide home delivery (small scale retailers)
...
Might provide informal credit to trustworthy customers (small scale retailers)
...
Provides after sale services to the customers
...
Provides information to the customers about the new products and schemes
...
Inform the wholesaler or producer about the reaction of market towards a certain
product
...
Deals with complaints from customers
...
Warehousing
...
Display products to the customers
...
O-Alevel
...
Purchase from the producer in bulk
...
Normally work on the basis of public or private limited companies
...
Involve a lot of capital
...
Invest heavily in the fixed assets
...
Employ specialist staff
...
Arrange transportation from the producer
...
Pay cash to the producer at the time of purchase
...
Sell on cash to end customers (i
...
no credit is offered)
...
Provide impersonalized services to the customers
...
Do not provide home delivery
...
Same product line is sold through all the shops
...
Stock is bought centrally
...
Most operate as public limited companies
...
Prices are clearly marked
...
Each department specializes in particular line of goods
...
Operates as limited companies
...
Variety chain store
•
•
•
Contains features of both multiple shops and department store
...
Sells by self-service, goods openly displayed and prices clearly marked
...
Offers self-service
...
www
...
com
Page 8 of 91
Author: Hassan Nadeem
Home Trade: The Retail Trade
Chapter 3
Hyper Market
•
•
•
•
Are very large supermarket
...
Offers low prices, as they buy in bulk
...
Mail order business
•
•
•
•
•
•
•
•
Run by manufacturers or the owners of departmental stores
...
Business will advertize extensively in newspapers
...
Catalogue contains diagram, specifications and reference number of goods available
...
Price lists contains the prices of goods mentioned in catalogue against its reference
number
...
Goods are delivered via mail
...
O
...
(cash on delivery) or C
...
O
...
Mail order business sells under money back guarantee
...
g
...
It saves on other retail costs e
...
shop fittings, window displays, extra services for
customers
...
It can target those who are unable to visit shops e
...
working women, the
housebound
...
2
...
4
...
6
...
Business can employ specialist staff – Efficient business
...
Business can save on transportation
...
Have state of art warehousing techniques
...
O-Alevel
...
Variety is available
Horizontal = Different brands
Vertical = Different products of same brand
...
Generally customers can get low rates
...
Benefit of one stop shopping
...
Extra facilities like ATM and post office
...
Since items are displayed openly on shelves, customers have freedom of choice
...
Mail order business sell under money back guarantee
...
Generally items of good repute and quality is sold
...
Customers can enjoy arm chair shopping via mail order
...
2
...
4
...
6
...
High fixed cost (large expenses)
...
Management problems
...
Business has to allocate certain area for non-productive activity (play area, parking
lot)
...
Normally self service is offered and there are chances of shop lifting
...
Mail order business can expect refund claims which is loss to the business
...
Not conveniently located
...
All these are located in main commercial area their can be traffic, congestion and
parking problems
...
Customers get standardized items
...
Impersonalized services
...
Self service sometimes leads to impulse buying and irrational buying
...
Do not provide home delivery
...
Don not provide credit facility
...
Limited capital is involved
...
Normally do not employ specialist staff
...
www
...
com
Page 10 of 91
Author: Hassan Nadeem
Home Trade: The Retail Trade
Chapter 3
Why Small Scale Retailers are dependant on wholesalers
•
•
•
•
•
•
Small scale retailers purchase in smaller quantities
...
Needs credit
...
Wholesaler advices small scale retailers on different selling issues
...
Why Small Sale Retailers are still surviving
1
...
3
...
5
...
Personal services
...
Opening hours (open early in morning and closed late at night)
...
6
...
How Retailers can improve their Profits
...
2
...
4
...
6
...
By improving the quality of products
...
By offering competitive prices
...
By improving shop layout
...
By controlling costs of routine operation
...
Knowledge about the industry
...
Capital requirement
...
Defensive: locating away from competition
...
www
...
com
Page 11 of 91
Author: Hassan Nadeem
Modern Trends in Retailing
Chapter 4
Large Scale Retailing
See Chapter 3
Mail Order Business
See Chapter 3
Self Service
•
•
•
Products are displayed on open shelves
...
Generally used in large scale retailing especially supermarkets
...
Lesser requirement of shop staff
...
More sales in given time
...
More sales due to impulse buying
...
4
...
To Customers
1
...
2
...
3
...
4
...
Disadvantages
To Retailers
1
...
2
...
3
...
To Customers
1
...
2
...
3
...
www
...
com
Page 12 of 91
Author: Hassan Nadeem
Modern Trends in Retailing
Chapter 4
Branding and Packing
•
•
•
•
•
Branding means the selling of goods under the trade mark or brand name of
manufacturer
...
Brand Name= Name and Brand Mark= Symbol
...
Branding is only possible if packing is done
...
Products can be differentiated
...
Market share can be created
...
Adds value to the product
...
Assists in handling of products
...
Information about the product can be written
...
Attracts customers
...
Some packing can be reused
...
Advertisement can be done
...
Easy to handle
...
Brand assures uniform quality
...
With packing awareness is created
...
Customer is well informed about the product by advertisement
...
Some wrappers can be reused
...
Shopping has become easier
...
Brands needs to be advertise and advertisement can be burden on resources
...
Sometimes branding increases competition and competition puts pressure on firms
profit
...
Imitation brands reduce profit
...
Customers get confused as what brand to buy
...
Cost of packing an advertisement is added to the price of product
...
Customer may be misled by the advertisement of a certain brand
...
Imitation brands
...
O-Alevel
...
After sale services include: Installation, training, repairing and warranty
...
Warranty is valid within a specific period of usage or specific period after purchase
...
Advantages
To Retailers
1
...
2
...
To Customers
1
...
2
...
3
...
Disadvantages
To Retailers
1
...
2
...
3
...
To Customers
1
...
2
...
Automatic Vending Machines (AUMs)
•
•
•
These machines can sell cold bottled drinks, hot drinks, cigarettes and sweets
...
Customers enter the money into the machine, presses a button and desired item
comes out
...
Requires minimum space so rental cost is low
...
24 hours sale
...
No sale staff required
...
O-Alevel
...
Adds convenience
...
Available all the time
...
Self service
...
Disadvantages
To Retailers
1
...
2
...
3
...
4
...
5
...
To Customers
1
...
2
...
Shopping Complex
•
•
One multistory building, with many different shops, each belonging to different
owners
...
Advantages
To Retailers
1
...
2
...
3
...
To Customers
1
...
2
...
3
...
4
...
Disadvantages
To Retailers
1
...
2
...
3
...
www
...
com
Page 15 of 91
Author: Hassan Nadeem
Modern Trends in Retailing
Chapter 4
To Customers
1
...
2
...
3
...
Barcodes
Advantages
To Retailers
1
...
2
...
3
...
4
...
5
...
6
...
To Customers
1
...
Not charged extra
...
Quick billing
...
High capital cost
...
Skilled labor required
...
Computer software can malfunction
...
Impersonalized shopping
...
Software malfunction
...
It is a branch of commerce in which commercial activities are
carried out electronically
...
Wide market
...
O-Alevel
...
3
...
5
...
7
...
No requirement of retail outlet
...
Products can be displayed and specified on web
...
Computer can help keeping a variety of information
regarding customers and employees
...
More variety
...
Benefit of arm chair shopping
...
Capital cost increases
...
Expenses of developing and operating websites
...
Danger of hacking
...
Dependence on skilled labor
...
Market is limited
...
Fraud
...
Customers can check product only after it is delivered to them
...
Impersonalized way of buying
...
All franchises are decorated in the same style
...
Name is spread without much investment
...
Gets franchising fee from the franchisee
...
Has right to control certain activities of franchisee
...
Training by the franchisor
...
Less advertisement is required
...
O-Alevel
...
Convenience, easily located
...
Guarantee of quality
...
Any bad business practice of franchisee can damage franchisor’s image
...
Responsibilities of training and educating franchisee
...
Heavy amount is to be paid to franchisors as franchising fee
...
Loss of some business controls
...
Agreement is valid upto certain period
...
No separate identification of franchisee
...
Franchising is not determinant of success
...
Limited choice of product
...
A plastic card which can be charged by the customer only with one retailer
...
More sales
...
Brand loyalty
...
Customer profile can be maintained
...
Additional revenue through sales of cards
...
Discounts
...
Gifts
...
Extra value added facilities
...
Discounts and gifts are Burdon on profits
...
A whole system is required before issuing store cards
...
Have to purchase from those outlets which offer gifts and discounts
...
O-Alevel
...
Some times customers are not interested by gifts
...
Advantages
To Retailers
1
...
2
...
3
...
4
...
To Customers
1
...
2
...
3
...
Disadvantages
To Retailers
1
...
2
...
3
...
To Customers
1
...
www
...
com
Page 19 of 91
Author: Hassan Nadeem
Home Trade: The Wholesale Trade
Chapter 5
Introduction
Wholesale trade deals with the bulk buying of goods from various manufacturers and the
breaking down of this bulk into smaller quantities which is then sold to the retailer
...
Functions
1
...
2
...
3
...
4
...
5
...
6
...
7
...
8
...
9
...
10
...
11
...
12
...
Comparison of Large Scale Retailers and Wholesalers
Similarities
1
...
2
...
3
...
4
...
5
...
6
...
7
...
8
...
9
...
10
...
11
...
12
...
www
...
com
Page 20 of 91
Author: Hassan Nadeem
Home Trade: The Wholesale Trade
Chapter 5
Dissimilarities
1
...
3
...
5
...
Large Scale Retailers
Wholesalers
Sell to end customer
...
Can sell in smaller quantities
...
Sell on cash
...
Normally do not provide home delivery
...
Impersonalized services
...
Can perform branding and advertisement
...
SSR= Small Scale Retailers
Importance of Whole Scale Retailers in Distribution channel
To Producer
1
...
3
...
5
...
Producers are relieved of the risks
...
By providing prompt cash, cash flow problem is reduced
...
Transportation is provided by wholesalers
...
To Retailers
1
...
3
...
5
...
7
...
Wholesaler provide credit
...
Educate SSR on new products, shop layout and advertising
...
Sell in small quantities
...
To End Customer
1
...
3
...
5
...
Variety
...
Competitive rates
...
Price fluctuations are minimized
...
The role of wholesaler is on decline
Reasons
1
...
2
...
www
...
com
Page 21 of 91
Author: Hassan Nadeem
Home Trade: The Wholesale Trade
Chapter 5
3
...
4
...
5
...
Instances where wholesalers are eliminated
1
...
3
...
5
...
7
...
Branded items
...
Producers are resourcefully strong (Producers own retail outlets)
...
Customized items
...
Instances where wholesalers are still involved
1
...
3
...
5
...
Standardized items
...
Unbranded items (farm products)
...
Producers do not have resources
...
Recent Trends in Wholesaling
Cash-and-carry wholesalers
•
•
•
•
It is a wholesale supermarket, where retailers can buy goods in bulk at low prices
...
Generally located in commercial areas
...
Cheap goods due to self service
...
No restriction on purchase of a minimum quantity
...
Under this agreement all parties agree to work under a common name and symbol
...
All are responsible for their own profit and loss
...
Cheap source of supply
...
www
...
com
Page 22 of 91
Author: Hassan Nadeem
Home Trade: The Wholesale Trade
•
Chapter 5
Advantages to wholesaler:
Assured amount of turnover
...
Administrative cost becomes low
...
O-Alevel
...
Reasons for giving Credit
1
...
3
...
To gain competitive edge
...
To sell a very expensive items
...
Matters discussed in agreement
•
•
•
•
•
•
•
•
Details about the buyer and seller
...
Amount of finance
...
Monthly installment
...
Collateral security involved
...
Credit
Short
Term
Long Term
Leasing
Hire
Purchase
Extended
Credit
Bank Loan
Informal
credit
Credit
Card
Overdraft
Sale &
lease Back
Short Term Credit
www
...
com
Page 24 of 91
Author: Hassan Nadeem
Customer Credit Chapter 6
•
The amount of credit is low
...
O-Alevel
...
Informal Credit
•
•
•
•
•
Credit is given without any written agreement
...
Small amounts are involved
...
Normally offered by the retailer to their trustworthy customer
...
These can be used for making payment at
selected retailers or for drawing cash from
selected ATMs upto a certain limit
...
Plastic Card
...
Magnetic tape
...
Name of card holder
...
Card number
...
Validity date
...
Increases purchasing power
...
Minimum cash handling
...
Obtain cash at ATM
...
Can be canceled when stolen
...
Postponement of payment
...
Interest from card holder
...
Commission from retailer
...
More sales
...
Competitive edge
...
Minimum cash handling
...
Limited acceptability
...
Interest is charged
...
Irrational buying
...
Every one can not have this facility
...
O-Alevel
...
Can be misused
...
Recovery of money from defaulters
...
Commission and rental to be paid to the bank
...
Problem of limited cash
...
Available only for current accounts
...
Long Term Credit
•
•
•
•
•
Amount of Credit is large
...
Repayment is made in installments
...
Collateral security are involved
...
Lessor: One who owns the asset and lets other (lessee) use it
...
Hire Purchase
• A leasing agreement in which the lessor lets the lessee use an asset for a certain time
period (less that the life of the asset) upon a certain installment (rental) with an
option to purchase the asset by paying the amount or return the good to lessor,
after the lease period
...
• The lessor will own the asset till the last installment has been paid and the total
value of the asset is recovered
...
• The asset is sold to the lessor on the bases of market price and lessee gets the full
amount in lump sum
...
www
...
com
Page 27 of 91
Author: Hassan Nadeem
Customer Credit Chapter 6
•
•
•
•
Possession will remain with lessee
...
Lessee can not sell the asset till the installment are paid and asset comes under his
ownership
...
Extended Credit/Deferred payment
•
•
•
•
•
It is suitable for items with low resale value
...
Customer can sell the asset any time
...
If customer defaults making payment the financer has the right to sue him
...
Suitable for goods with no second hand
value
1
...
3
...
Leasing
Expensive source of finance
Collateral security is not involved
Good remains in the owner ship of the seller
I case of payment defaults seller can repossess
the good
Suitable for goods with good second hand value
Advantages and Disadvantages of Customer Credit
Advantages
Disadvantages
To the Economy
1
...
To the Seller
1
...
1
...
2
...
So less risk of
2
...
seller has to re possess the goods which may be
damaged
...
Can earn interest if he is also financing
...
Administrative expense to record installments
...
Raises the standard of living
...
2
...
2
...
1
...
www
...
com
Page 28 of 91
Author: Hassan Nadeem
Terms and Documents in Home Trade
Chapter 7
Terms of Payment
Trade Discount
A deduction in price of goods if purchased in bulk
...
This is given for early recovery of money
...
Prompt Cash
Payment of goods within few days of purchase
...
W
...
)
Payment made together with order
...
O
...
)
Payment made upon delivery of goods
...
Terms of Delivery
Carriage Paid (Carr
...
)
Transportation charges are paid by the seller and are included in the rate
...
Fwd
...
Free on Rail (F
...
R
...
Freight has to be paid by the
seller
...
O
...
)
Seller has paid all the charges upto loading of cargo onto ship
...
Cost , Insurance, Freight (C
...
)
Price includes cost of goods, insurance and freight
...
O-Alevel
...
2
...
4
...
For better internal control of the business
...
For future references
...
To minimize misunderstandings between buyer and seller
...
Made on official paper (which include Brand name, Brand mark and contact details
(e
...
c
...
Date of issuance is written
...
Reference number
...
Reference number of the document in response of which document is issued
...
Contact details
...
Title of document
...
All documents must be signed by a competent authority from the issuer side
...
Quotation
Issued by: Seller
Issued to: Buyer
Purpose: Issued in response of Letter of Enquiry
...
b) Terms of supply and discounts
...
d) Amount of time needed for delivery
...
Nicely printed containing the specifications, pictures
of goods, contact and terms and conditions
...
O-Alevel
...
Order
Issued by: Buyer
Issued to: Seller
Purpose: Issued to place an order for goods
...
b) Description of each items
...
d) The address to which the consignment is to be sent
...
It is usually sent with the goods so that
buyer can check the goods delivered
...
Invoice
Issued by: Seller
Issued to: Buyer
Purpose: To claim the amount of goods supplied, stating also the type, quantity, price and
terms of payment
...
O-Alevel
...
O-Alevel
...
It informs the transactions between the buyer and seller
To sort out any discrepancy in the record of buyer or seller
...
www
...
com
Page 33 of 91
Author: Hassan Nadeem
Terms and Documents in Home Trade
Chapter 7
Differences between Invoice and Statement of Account
1
...
3
...
5
...
Carries certain date
...
Does not tell the outstanding balance
...
Statement of Account
Summary of transactions
...
Do contain such information
...
No such information
...
To reduce amount receivable from the buyer
...
O-Alevel
...
O-Alevel
...
Balance Sheet: Shows the financial position of a business at a certain point in time
...
Profit and loss account: Operational results of a business during a certain period
in time
...
Shows where sources of finance have been spent
...
Fixed assets are those assets which will remain in use of business for more than one
year
...
Examples: Land, Building,
Machines, Furniture, Equipment and Vehicles
...
Example: Stock of raw materials, Debtors (amount of
sales on credit), bank balance and cash in hand
...
Long Term Liabilities are those liabilities which are to be repaid after one year
...
Example: Creditor (money the business as to pay against credit purchases of
raw material)
...
Capital Owned/Equity Capital/Net worth of Business
Amount of money that business owes to its owner at a certain point in time
...
Fixed Capital
Amount of money that business has issued to acquire fixed assets at a certain point
in time
3
...
www
...
com
Page 36 of 91
Author: Hassan Nadeem
Capital and Profits of a Business
Chapter 8
4
...
Capital Invested
Amount of money brought into business by the owner
...
Working Capital
It is the money used by the business to finance routine expenses
...
Working Capital Ratio
Ratio show the extent of business financial stability
%
&
'
Working Capital should ideally between 1 and 2
...
Liquid Capital
Liquidity is the ease with which one can fully convert its resources into legal tender
...
It is a part of current assets which are in form of cash, bank balance and debtors
...
Liquid Ratio/Acid Test Ratio
Shows the solvency position of a business
...
&
(
'
Stock is excluded because stock is difficult to convert to cash very quickly
...
Turnover/Net Sales
It is the total value of goods sold in the year
...
Cost of Goods Sold
It is the cost of goods that have been sold
...
Gross Profit
Overall profit on trading
*
"
*
4
...
Direct expenses are varying costs for example salaries and wages
...
O-Alevel
...
Net Profit
Final profit of the business after deducting all the expenses
...
Markup
Difference between buying and selling price ≠ Gross profit
...
Percentage Markup
*
, &
-
...
Margin
Profit out of a unit sale
...
Gross Profit Percentage
*
*
)
-
...
Net Profit Percentage
"
"
)
-
...
Rate of Turnover
'
*
&
$
&
12
...
2
...
4
...
Long term loans
...
More sales
...
O-Alevel
...
Private Sector Organization
•
•
•
Which are owned and controlled by private people
...
Generally are run to earn profit
...
Finances are provided by the government
...
Limited and Unlimited Liability
Unlimited Liability: Creditors can claim a owner's personal assets to pay off any debts
...
Limited Liability: This means the company's finances are separate from the personal
finances of their owners
...
Capital: Limited and provided by loans or personal savings
...
Status: No legal entity
...
Registration: No legal formalities
...
Examples: Food stall, laundry and tailor
...
2
...
4
...
6
...
Easy management
...
All profit is retained by the owner
...
Labour intensive
...
O-Alevel
...
2
...
4
...
Uncertain life
...
All burden of management is on the owner
...
Capital: Small to medium
...
Limited in case of limited partnership but
at least one partner should be with unlimited liability
...
Scale of operation: Small to medium
...
Investment of capital: Cash (money), Kind (providing asset to the company), Expertise (skill)
...
2
...
4
...
Responsibilities can be shared
...
Low taxes
...
2
...
4
...
Unlimited liability of some owners
...
Unwise decision of one partner becomes obligations of other partners
...
There can be disputes in decision making
...
Capital: Medium to large
...
Liability: Limited to its registered capital
...
Scale of operation: Medium to large
...
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Page 40 of 91
Author: Hassan Nadeem
Types of Business Units Chapter 9
Tax: High Tax rate
...
Life: Certain, long
...
2
...
4
...
Responsibilities can be shared
...
Long and certain life
...
2
...
4
...
Difficult formation
...
Difficult management
...
High Tax rate
...
Capital: Large (raised by selling shares to general public)
...
Formation: Complex done under company law
...
Life: Long and certain
...
Tax: High tax rate
...
Memorandum of Associations
i
...
ii
...
iii
...
iv
...
List of directors
...
Articles of Association
i
...
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Page 41 of 91
Author: Hassan Nadeem
Types of Business Units Chapter 9
ii
...
iii
...
iv
...
v
...
3
...
Capital of Public Limited Company
1
...
Holder of share becomes
owner of the business
...
Debenture
Are issued by public limited company to general pubic
...
1
...
3
...
5
...
Ordinary Shares
Debenture
Normally are non redeemable
...
Can attend the AGO and hence take part in
Holders can not attend the AGO
...
Holders get share of profit by getting
Holders get interest on their investments
...
Rate of interest is fixed and is written on
Rate of dividend is not fixed and is decided
each year at AGO
...
Dividend depends on profit earned
...
In case of liquidation, holder get share after
In case of liquidation, debenture holders are paid
debenture holders are paid
...
AGO= Annual General Meeting
BOD= Board of Directors
Ordinary Shares
1
...
2
...
3
...
Called Risk
Capital
...
Entitled to dividends after preference share
holders have been paid
...
Rank last of distribution of assets in
liquidation
...
Rate of dividend is lower
...
Paid first of all
...
Calculations of Dividend
Face value of shares X No
...
O-Alevel
...
2
...
4
...
6
...
All share holders can become directors
...
Share holders can run the business
...
All share holders can not become directors
...
Management and owners are different
...
Return on capital: Members are given fixed rate of interest on their share whether profits
are earned or not
...
Scale or operation: Large
...
Registered under Cooperative Ordinance
...
Aim: Profit is not the main aim
...
2
...
4
...
Professional management
...
Separate legal entry
...
2
...
4
...
Inability to compete
...
Ownership of shares is limited to certain amount
...
Function: Generate items of utility at a very low rate
...
O-Alevel
...
Large scale business
organizations
...
Promotion of public interest
...
Government has a control over essential goods and services
...
Non Profitable business
...
Difficult management
...
A business which has its branches in a number of countries
...
2
...
4
...
Saves international freight charges
...
Bigger market means more sales
...
Lesser chances of competition from host country
...
Difficult to manage
...
Host government can change its policies
...
3
...
4
...
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Page 44 of 91
Author: Hassan Nadeem
Consumer Protection Chapter 10
Consumer Protection
All activities targeted towards protecting consumers rights
...
2
...
4
...
Unfair trading practices of businessman
...
Ignorance of consumers that products may endanger their health or life
...
Ignorance of customers of their rights
...
To get right quantity and quality against the price paid
...
Not to be charged extra
...
Should be given goods in proper measurement
...
There should be no adulteration
...
Should no get expired items
...
Should no get unhygienic items
...
Should not be treated rudely
...
Should not get items with haram ingredients
...
Seller should not make misleading statements during time of selling
...
Should be given due after sale services
Ways to Protect Consumers
1
...
Government legislation
...
Government agencies e
...
Ministry for Consumer Affairs,
Competition Commission
...
Consumer associations – testing products to find the best
value for money
...
Consumer Council – with consumers as members
...
Radio and TV programmes
...
O-Alevel
...
Merchants
Who purchases goods for resale at a profit
...
Mercantile agents
Acts on behalf of principals in finding buyers for goods and services
...
Factors do not own the goods and services
themselves but have the temporary possession, earn commission for their services
...
Importance of Middleman
1
...
2
...
3
...
Special types of Middleman
1
...
2
...
3
...
4
...
5
...
6
...
7
...
8
...
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Page 46 of 91
Author: Hassan Nadeem
Foreign Trade Chapter 12
Foreign/International Trade
International trade is the exchange of capital, goods, and services across international
borders
Types of International/Foreign Trade
Export Trade
Sales of goods and services to
another country
Foreign exchange enters the
country
Import Trade
Purchases of goods and services
from another country
Foreign exchange leaves the
country
Entreport Trade
Importing with the purpose
of re-exporting
No effect on foreign
exchange
Visible and Invisible Trade
Visible Trade
Sales of goods to another country is called visible
export
Purchases of goods from another country is
called visible import
Invisible Trade
Sales of services to another country is called
invisible export
Purchases of services from another country is
called invisible import
Why Foreign Trade has increased?
1
...
2
...
3
...
4
...
5
...
6
...
7
...
8
...
9
...
g ASEAN
...
2
...
4
...
Additional cost of transportation
...
Excessive documentation
...
O-Alevel
...
Government rules in importing country
...
Import and export duty
...
Different units of measurement
...
Trade barriers like trade embargo and strict quota
...
Payment can be delayed
...
More risks involved
...
Exchange rate fluctuations
...
Risk of insolvency of the buyer,
2
...
Risk of non-acceptance
4
...
Risk of Exchange rate
Political risks
1
...
War risks
3
...
Risk of the imposition of an import ban after the shipment of the goods
5
...
Surrendering political sovereignty
7
...
2
...
4
...
6
...
A greater variety of goods and services become available
...
Government earns revenue (by import/export duties)
...
A country can specialize in producing certain goods and services
...
More employment is created (All three sectors in case of export and tertiary sector
in case of import)
...
Increases competition and thus quality of local production
...
O-Alevel
...
2
...
4
...
6
...
8
...
Loss of employment in Primary and Secondary sector in case of import
...
Loss of foreign exchange (in case of import)
...
Dumping can occur (selling products at a loss)
...
Increase in price level
...
Depreciation of currency of importing country
...
If visible exports exceeds visible imports than it is favorable and if visible imports
exceed visible exports than it is unfavorable
...
It includes all items of visible trade, visible trade and capital movement
...
If total receipts exceed total payments then it is called balance of payment surplus,
which is desirable
...
Loss of foreign exchange
...
Depreciation of currency
...
Imports will become expensive and it can create inflation
...
Quotas – imposing limits on the amount of imports allowed into a country in a given
year
...
This is often
applied to harmful goods e
...
firearms
...
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Page 49 of 91
Author: Hassan Nadeem
Foreign Trade Chapter 12
•
•
•
Increased documentation and bureaucracy at point of entry – making importing
more difficult by increasing the rules and regulations for imports
...
Exchange control
...
Market research for:
i
...
ii
...
iii
...
iv
...
v
...
2
...
3
...
4
...
5
...
6
...
7
...
8
...
Documents in Foreign Trade
Indent
Issued by: Importer
Issued to: Exporter/Agent
Purpose: It is a order for goods
...
Shipping Note Issued
by: Exporter Issued to:
Port Authority
Purpose: To request port authority to load the goods to be exported, specifying the quantity
of goods and vessel on which goods are to be boarded
...
Bill of Lading (BOL) or (B/L)
Issued by: Master of ship in triplet
...
Purpose: Acknowledging that specified goods have been received on board as cargo for
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Page 50 of 91
Author: Hassan Nadeem
Foreign Trade Chapter 12
conveyance to a named place for delivery to the consignee who is usually identified
Importance:
1
...
3
...
5
...
Contract of carriage
...
Importer cannot release the cargo from its port unless he has the bill
...
6
...
7
...
Information:
1
...
3
...
5
...
Name of exporter
...
Name of agent
...
Place of departure and place of arrival of goods
...
Consignment Note
Issued by: Trucking company (Goods forwarder)
...
Purpose: Evidence of contract
...
Purpose: Same as consignment note, in case of air transportation
...
O-Alevel
...
By this purchases promises to settle a
debt on a specific date
...
Finances to the Exporter
Loans and overdraft
•
•
Granted by the bank , payable within two years, on the insurance
...
Negotiating and discounting bill of exchange
•
•
•
If the exporter has bill of exchange of future maturity date, then exporter can ask his
bank to release payment against the bill of exchange signed by the importer and
other shipping documents
...
On maturity of bill of exchange, the exporter has to pay in full to the bank
...
Importer goes to his bank to open a letter credit in the favour of exporter
...
Exporter will study the letter and make sure that they are inline with the terms and
conditions
...
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Page 52 of 91
Author: Hassan Nadeem
Foreign Trade Chapter 12
•
•
•
Exporter will dispatch goods to importer and submit all the export documents to his
bank
...
On delivery of goods importer has to pay money to his bank (issuing bank)
...
O-Alevel
...
O-Alevel
...
Functions of Customs
1
...
3
...
5
...
Prevention of smuggling
...
Appraisement of cargo
...
Enforcement of quotas
...
Types of Duties Levied
1
...
2
...
3
...
Basis of Calculation of the Duties
1
...
2
...
Free trade zone
•
•
It is an area, normally close to port, where prevailing taxes on international trade
are not applicable
...
Blending
...
Packing
...
Sub-Assembly
...
And for reexporting without payment of duties
...
O-Alevel
...
Importance of Bank
1
...
3
...
Safekeeping for cash
...
Provides finances
...
Types of Banks
Central Bank
•
•
•
•
•
•
•
•
One central bank in each country
...
Designing and enforcement of monetary system (a policy related to interest rates
and money supply to control economy)
...
Makes policies for controlling activities of commercial banks
...
Manages foreign exchange reserves
...
Commercial Bank
•
•
Private owned and profit seeking
...
Services of Commercial Bank
1
...
3
...
Accepting deposits
...
Means of Payment
...
1
...
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Page 56 of 91
Author: Hassan Nadeem
Banking Chapter 14
1
...
Current Account
1
...
Savings Account
1
...
Fixed Deposit Account
1
...
3
...
5
...
Opened with minimum
deposit
...
No need to pay bank
charges
...
6
...
7
...
Opened with large deposit
...
Opened with large deposit
...
No need to pay bank
charges
...
Can not be
withdrawn
...
Certificate of deposit
...
Has to pay charges if deposit
falls below certain amount
...
No Limit of withdrawing
money
...
Lending Money
2
...
Discounting Bill
Any customer with a bill of future maturity date can be negotiated with the bank to get
money against the bill on prevailing discount rate on their face value
...
2
...
• Normally a loan is granted for acquiring any fixed asset or for development of infra
structure
...
• Borrower has to pay the principal amount along with the interest
...
1
...
2
...
3
...
4
...
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Page 57 of 91
Author: Hassan Nadeem
Banking Chapter 14
5
...
2
...
Bank Over Draft
• A short term facility offered by the bank to the borrowers where the borrower can
over draft (withdraw money more than their balance) their accounts maintained with
the banks
...
• Also known as running finance facility
...
• Only available for current account
...
2
...
4
...
6
...
8
...
Offered for short term period
...
Interest is charged on availed
amount
...
Bank statement will show debit
balance
...
Money paid into the borrower’s
account reduces its debt
...
Offered for long term period
...
Interest is charged on principal amount
outstanding
...
After loan amount is deposited in to the bank,
Bank Statement will show credit balance
...
Loan is repaid by standing orders
...
Means of Payments
•
•
•
•
Payer: One who is making payment
...
Drawer: The one who signs the cheque
...
3
...
Cheques
1
...
a
...
b
...
If the first payee
want to give the cheque to another person he must endorse the cheque to
him with his sign
...
Crossed cheque is a cheque which can not be cashed over a counter but must be
paid into a account
...
O-Alevel
...
2
...
4
...
Minimum cash handling
...
Track record of payment can be maintained
...
Some times it is a legal obligation
...
2
...
4
...
Payments through cheques means limited hard cash
...
Not suitable for petty purchases
...
Cheque can be deposited only into payee account
...
How Cheques are dishonored
1
...
3
...
5
...
7
...
9
...
There is some discrepancy in amount written in words and in figures
...
Tempered cheque
...
Signatures do not tally
...
Post dated cheque
...
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Page 59 of 91
Author: Hassan Nadeem
Banking Chapter 14
10
...
11
...
How to overcome the problem of dishonored Cheques
1
...
3
...
5
...
Check cheques before accepting them
...
Ask for cash payment
...
Insist on the use of a cheque guarantee card (see below)
...
Cheque cards are issued by bank to their credit worthy
customers, guaranteeing to the payee that a cheque
drawn by the card holder will be honored by the bank
even if there are insufficient funds in the account of
drawer
...
2
...
• The payer approaches the bank with the request and payment in cash or through
cross cheques in favour of the bank
...
• At is a secured means of payment
...
3
...
Standing Order
• Suitable especially for annuity payment for example hire purchase
...
• Payer gives bank written instructions
...
Payments are made automatically
...
2
...
• Disadvantages::
1
...
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Page 60 of 91
Author: Hassan Nadeem
Banking Chapter 14
2
...
3
...
Direct Debit
• Same as Standing Order except that payments of varying amounts at irregular
intervals can be made
...
3
...
Credit Transfer
• Suitable for making payments to a number of payees at the same time
...
• Payer gives information of payees in written to the bank
...
• Advantages:
1
...
2
...
3
...
4
...
• Disadvantages:
1
...
2
...
3
...
Bank Giro
• It allows payment to be made at any branch of any bank to any branch of any bank in
the country
...
• A payer can deposit money by cash or through cross-cheque into a payee account by
filling a “bank giro credit slip”
...
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Page 61 of 91
Author: Hassan Nadeem
Banking Chapter 14
3
...
Online Payment
• Payment can be deposited into payee’s account through internet
...
• Payer has to go to any branch of the bank where payee holds his account
...
• Bank where payer deposits the money will remit it to payees bank branch
...
• Remittance is sending of money without physical movement of money
...
Other Services
4
...
Agency Service
• Banks acts as agent of the payee for accepting payments
...
2
...
4
...
Issuance of Bank Statement
• It is issued by the bank to their account holder on periodic basis or on demand
...
• Generally mentioned in running balance format
...
4
...
4
...
• These can be used for making payment at
selected retailers or for drawing cash from
ATMs
...
2
...
There is no limit upto which card can be
used
...
O-Alevel
...
There is limit upto which card can be used
...
When ever card is used, money is transferred When ever card is used, money is paid by the
bank
...
4
...
5
...
No interest
...
Bill is made and sent periodically to the card
holder
...
No transaction based charges
...
6
...
Most banks now have more ATMs than branches, and
ATMs are providing a wider range of services to a
wider range of users
...
• This card is used to draw money by using it at ATMs
...
Mini Bank Statement
...
Utility Bills payment
...
Balance enquiry
...
Balance Transfer (BTF)
...
Deposit Money
...
4
...
Telebanking
• A special facility which is offered by the banks to their account holders on their
request
...
This normally includes bill payments for bills from major billers (e
...
for
electricity)PIN is used to access the bank account
...
o Checking Bank balance
...
o Requesting cheque books
...
O-Alevel
...
8
...
over the Internet
through a bank
...
• PIN code is used for authentication
...
4
...
Lockers
• A facility offered by the banks to their customers on their request to deposit their
valuables in Bank Lockers
...
• Valuables kept may be under a insurance cover provided by the bank upto certain
limit
...
10
...
• A facility offered by the bank to account holders to deposit money after bank
timings
...
11
...
• Used to add money into one’s own account
...
O-Alevel
...
Terms in Insurance
1
...
2
...
3
...
4
...
Sum Insured: Is amount which the insurer promises to pay at the maximum
...
Premium: Amount which is to be paid on order to buy an insurance cover
...
8
...
10
...
Premiums are to be paid on annual basis
...
Cover Note: A document of transitional nature which acts a proof of insurance
before insurance policy is issued
...
Proposal form: Document on which written data about the insured is collected
...
Why insurance cover is obtained
1
...
3
...
5
...
It can be obtained as a measure of saving for a certain future plan
...
Some times it is a obligation
...
Insurable Risks
Those risks against which probabilities of occurrence can be mathematically calculated on
the basis of available past data for example theft, accident
...
O-Alevel
...
Non-Insurable Risks
Those risks against which probability of occurrence can not be mathematically determined
for example failure in exam and change in fashion
...
All people who have a same type of risk, make payment of premiums to the insurer
...
How Insurer makes Profit
•
•
Only few of the total insured, claim their loss
...
How Insurance Company uses Premiums
1
...
3
...
To make claim payments
...
To reinsure
...
Factors effecting the Premium
1
...
Intensity of Risk =
3
...
Sum Insured =
5
...
Insurable Interest
•
•
Applied to all types of insurance
...
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Page 66 of 91
Author: Hassan Nadeem
Insurance Chapter 15
2
...
Nothing should be concealed from the insured
...
3
...
Insurer will try to compensate the loss
...
Insurer will not provide any benefit to the insured
...
a
...
b
...
Types of Insurance
a) General Insurance
a) Fire Insurance: Building due to
fire
...
d) Consequential Loss Insurance:
Loss of profit while rebuilding is
going on
...
O-Alevel
...
b) Third Party Cover: Includes
injuries and damage to
properties of third parties
...
d) Comprehensive: As in C) plus
damage to vehicle, personal
injuries to driver and loss or
damage of personal possessions
while in car
...
b) Medical Policy Insurance:
c) Cash in Transit Insurance: Covers against loss
due to robbery of cash in transit
...
d) Liability Insurance
a) Employer Liability: For accidents at work owing to employers negligence
...
c) Professional Liabilities: Taken by lawyers, doctors, architects and engineers to
cover against claims due to their personal negligence
...
e) Life Assurance
a) Whole Life policy: Lump sum payable at death
...
c) Family income protection policy: Paid on death of
insured in series of regular payment
...
O-Alevel
...
Group Insurance: Taken by small employer for employees in place of pension scheme for
employees
f) Marine Insurance
a)
b)
c)
d)
e)
f)
g)
Ship and installation
Passengers
Crew
Port and installation
Cargo
Fright
Public Liability
g) Aviation Insurance
a)
b)
c)
d)
e)
f)
Planes
Crew
Passengers
Port Installation
Public Liability
Cargo
h) Nuclear Insurance
Evaluating Insurance Quotation Depends upon
1
...
3
...
5
...
Risks covered
...
Financial worth of insurer
...
Middle Men in Insurance
Brokers
1
...
2
...
3
...
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Agents
Works on behalf of insurer
...
Does not provide advice
...
2
...
4
...
Insurer will appoint a surveyor
...
On the basis of information collected on the proposal form, the insurer will calculate
the premium
...
Buyer will pay the premium and will get the premium receipt and cover note from
the insurer
...
After a few days insurance policy is issued
...
After the accident, Insured or beneficiary will contact insurer and the police
department
...
Insurer will appoint a surveyor
...
Surveyor will contact the insured or beneficiary and give him/her a claim form
...
The insured/beneficiary will fill in the claim form and provide all relevant
documentary evidence
...
If the surveyor and police department find out correctness of the claim, payment will
be made to the beneficiary
...
O-Alevel
...
Importance of Transportation
1
...
3
...
5
...
Assists trading
...
Improves standard of living
...
International trade is not possible without transportation
...
Modes of Transportation
Road Transport
Advantages
1
...
2
...
3
...
4
...
5
...
Smaller and larger
quantities can be transported to
most of regions
...
Round the clock availability
...
Expensive for long distances and
heavy loads
...
Slow for long distances
...
Effected by topography
...
Effected by climate
...
Effected by weather conditions
...
Effected by traffic congestions
...
Creates pollution
...
Creates traffic congestions
...
O-Alevel
...
Cheap for long distances
...
Quick for long distances
...
Good to carry bulky cargo
...
Not effected by traffic
...
Does not create pollution in cities
...
Special transporters may be provided for
different specialized items
...
Especially suitable for low value and high volume
cargo
...
Involves documentation
...
Need for loading and unloading cargo many times
...
Trains can not go any where
...
Move only according to schedule
...
High costs for short distances and small quantities
...
Located out of cities so depends on road transportation
...
High capital cost of maintenance of tracks and trains
...
Quick
...
Safe handling of cargo
...
Not effected by topography
...
Not much documentation involved
...
Less packing requirement
...
Less insurance cost
...
Especially suitable for high value
and low volume cargo
...
Used for urgently required goods
...
Expensive
...
Effected by weather conditions
...
Has constraints as far as carrying of
cargo is concerned
...
Limited space
...
O-Alevel
...
Ships: “Mother Vessel 40,000 MT- 60,000MT” and “Connecting Vessel 20,000 MT”
deep port
...
Barge: Small Ship – Shallow port
3
...
Boats: River inland transportation
Main Types of Ships
1
...
2
...
3
...
It is normally
chartered
...
Bulk carrier: It is especially built to carry a particular type of cargo for example oil
...
OBO ship: It is can ore-bulk-oil carrier, carries loose material
...
Roll-on, roll-off: Highly specialized ships that allows loaded vehicles like trucks,
trailers, passenger cars etc
...
It is cheap per unit of cargo for longer distances
...
Highly suitable for bulky cargo
...
Refrigerating and other facilities are available
...
Containerization is possible
...
Not effected by topography
...
Very slow
...
Very rigid
...
It is effected by weather conditions
...
A lot of documentation
...
Lot of handling of cargo is involved
...
Extra cost for insurance and packing
...
O-Alevel
...
• Size (i): 20’x8’x8’
known as 20 ft container, suitable for low volume, high weight
• Size (ii): 40’x8’x8’
known as 40 ft container, suitable for low weight, high volume
• Containers are generally owned by shipping lines
...
• Containers are available to the traders on less than container load (LCL) and full
container load (FCL) basis
...
• Advantages:
1
...
2
...
3
...
4
...
5
...
• Disadvantages:
1
...
2
...
Chartering
•
•
•
•
A vessel/truck/plane is available to the trader on chartered basis by paying a certain
amount
...
The agreement signed with the owner is called ‘charted party’
...
Shipping Conference
•
•
It is a meeting held on annual basis attended by representatives of shipping
companies in which important matters are discussed
...
This freight is called “conference rate”
...
Price competition amongst the shipping line is limited
...
Profit is certain
...
Availability of ships in the long run
...
Rates are made artificially high, expensive rates
...
O-Alevel
...
Some shipping lines not attending the conference can operate below conference
rate, which is disadvantage to other shipping lines
...
Operational costs are minimum
...
Require favorable gradient
...
Leakage problems
...
Capital cost is saved
...
Running and maintenance cost is saved
...
Saving on problems relating to crew
...
Save on taxes
...
Cheaper operational cost
...
Creates good image
...
Can be used for business advertisements
...
Can make amendments to the transport according to requirements
...
Round the clock availability
...
Reduces dependency
...
2
...
4
...
6
...
Capital cost
...
Nature and scope of business
...
Availability of rental transportation
...
Crew costs
...
Freight charges
...
O-Alevel
...
3
...
5
...
7
...
Availability
...
Topography
...
Urgency
...
Nature of cargo
...
Chartered transportation
...
Air Freight
...
Express Routes
...
• There are minimum obstacles
...
• Speedy transportation
...
To provide navigation facilities and to control air and sea traffic
...
To maintain air traffic control tower/light house
...
To maintain run ways/berths/docks
...
Fueling of planes/ships
...
Provision of supplies to the planes/ships before departure
...
Signing agreement with other port authorities on variety of issues
...
Maintenance of planes/ships before departure
...
Providing facilities to passengers and traders
...
Security arrangement
...
Permits to motor boats/light air planes
...
Providing hanger facilities/wet or dry docks
...
2
...
4
...
6
...
Fire extinguisher
...
Internet facility
Café
...
www
...
com
Page 76 of 91
Author: Hassan Nadeem
Transportation Chapter 16
7
...
8
...
9
...
10
...
11
...
12
...
www
...
com
Page 77 of 91
Author: Hassan Nadeem
Communication Chapter 17
Introduction
Communication is the process of conveying information from a sender to a receiver with the
use of a medium
...
Importance of communication in commerce
1
...
3
...
5
...
7
...
Minimizes confusion and misunderstanding between buyer and seller
...
Business can get reliable and cheap information about their market
...
International trading is not possible without efficient communication system
...
Elements of Effective Communication
1
...
3
...
Sender
...
Mode of communication
...
Mode of communications
Verbal/Oral
•
•
•
•
•
Face to Face
...
Telephone
...
Seminar/conference
...
O-Alevel
...
Quick
...
Normally cheap
...
Facial expressions can be seen
...
Message can be distorted
...
No proof or record
...
Fax
...
Newspaper/Magazine
...
SMS
...
Record can be made
...
Sometimes it is fast and cheap in case of SMS and internet
...
Lesser chances of message being distorted
...
Some times it can be expensive
...
Useful only for literate people
...
Not very quick is case of newspaper and postal mail
...
For written
...
Ordinary Mail:
• To send and receive letter
...
• Advantages:
Cheap
...
Wide coverage
...
www
...
com
Page 79 of 91
Author: Hassan Nadeem
Communication Chapter 17
Misplacement of letter can occur
...
2
...
• Extra fees is paid to ensure delivery and with compensate for loss
...
Wide coverage
...
Compensation in case of loss of mail
...
Slow
...
3
...
• Express mail service can be availed on the request of both sender or receiver
...
• Disadvantage:
Extra money is to be paid
...
Post Boxes:
• This service is available on request by paying charges
...
• Upon request, Post office will assign a certain post box with a certain
number
...
• A key is given to the person to whom post box is assigned
...
5
...
O-Alevel
...
This is suitable for those who have to send a lot of mail
on regular basis
...
Function of franking machine is to print stamps
...
Customer has to pay rental cost of the machine along
Page 80 of 91
Author: Hassan Nadeem
Communication Chapter 17
•
with the stamps used
...
6
...
• It is speedy for longer distances
...
• Sender has to specify by writing AIR MAIL on envelope
...
Parcel Service:
• For sending and receiving cargo of small size or weight
...
• Cargo accepted by the post office and they issue an acknowledge/
consignment note
...
• Cargo number can be used to track he cargo
...
8
...
Money Order: For larger amounts
...
Postal Order: For smaller amounts
...
National Giro: For making payments in someone’s account
...
Saving Account:
Can be operated and maintained at certain branches of post offices
...
Insurance:
Post offices act as insurer to cover certain risks
...
Agency Service:
Post offices as agent to accept and make payments on behalf of others
...
1
...
O-Alevel
...
Easily available
...
Speedy
...
Facial expressions can not be seen
...
No record
...
Mobile Phones:
Can be carried any where
...
SMS
...
Internet
...
Enables travelers to keep in touch with his office
...
Informational can be distorted in case of weaker signals
...
Battery needs to be charged
...
Fax:
•
•
•
Used for written communications
...
Send will feed document in his fax machine and receiver
will get the copy of the document on his fax machine
...
Fast
...
Record can be kept
...
Suitable only for sending few papers
...
Limited life of fax copy
...
4
...
• Modern banking is dependant on internet
...
O-Alevel
...
Has increased international trade
...
5
...
High capital cost
...
Email:
Used to send messages over the internet
...
Attachment can be done
...
Cheap
...
C
...
C
...
can be done
...
Virus
...
For computer literate people only
...
7
...
Saving time and money on meetings
...
Facial expressions can not be seen
...
Videoconferencing:
Facial expressions can be seen
...
2
...
4
...
6
...
Cost
...
Accuracy of information
...
Nature of information
...
Distance
...
O-Alevel
...
Importance of Warehouses
1
...
3
...
5
...
7
...
9
...
Protection from theft
...
Surplus created can be stored before being finally sold
...
Price fluctuations can be minimized
...
Traders can keep their cargos in bonded warehouses, before they pay the duty
...
10
...
Types of Warehouses
Retailers Warehouse/Depots
•
•
•
•
To store bulk purchases for wholesaler or producer
...
Retailers can purchase goods when they are cheap and can stock excess purchase
...
Wholesalers Warehouse
•
•
Use warehouses for blending, grading, packing and branding
...
Cash and Cary Warehouses
•
•
Retailers can buy in small quantities
...
Cold Storages
•
•
•
•
Special warehouse with refrigerating plants
...
Temperature can be set at will
...
www
...
com
Page 84 of 91
Author: Hassan Nadeem
Warehousing
Chapter 18
Regional Distribution Centers
•
•
•
Owned and maintained by large scale retailers and wholesalers
...
Supermarkets/multiple chains/variety chains/franchise/chain of department
stores/hypermarkets mainly use regional distribution centers
...
Help producer to carry on production when there is shortage of raw material
...
Produced can get benefit of trade discount be purchasing raw material in bulk
...
Public Warehouses
•
•
•
These are owned by public sector (government)
...
Also available on rent to private sector
...
Dutiable goods are stored, on which duty is not yet paid
...
Traders have to pay the rent
...
Trader can also sell the cargo and the new owner has to pay the duties
...
Trader can pay some of the duty can get proportional amount of cargo released
...
It enables government to collect custom duties
...
Difference between Bonded and Ordinary Warehouses
1
...
3
...
5
...
Controlled by custom authority
...
Owned by government,
www
...
com
Page 85 of 91
Ordinary Warehouses
No specific location
...
Store finished goods and raw materials
...
Owned by private sector
...
Aims of Advertisement
1
...
3
...
5
...
Introducing new products
...
Spreading brand name
...
Purpose of Advertising
To Inform
•
•
When a new product is introduced
...
To Persuade
•
To persuade people to buy a product of a particular brand
...
To draw attraction of customers
...
For example a new car launch
...
Reminder Advertisement
•
Adds repeated again and again
...
www
...
com
Page 86 of 91
Author: Hassan Nadeem
Advertisement
•
Chapter 19
For example “Our mineral water is purified by the latest technology”
...
For example “Our company contributes to keeping the country clean”
Collective/Genetic Advertisement
•
•
•
Advertisement of a product not a particular brand
...
Competitive Advertisement
•
•
Carried out by different producers encouraging public to buy their brand
...
Direct Advertisement
•
•
Advertisement without involvement of any third party
...
Indirect Advertisement
•
•
•
Done with the involvement of third party
...
For example though Television and Radio
...
Results in better communication of the message
...
Cheap of smaller market
...
No wasteful circulation
...
Limited coverage
...
People do not take this type of advertisement seriously
...
Low unit cost
...
www
...
com
Page 87 of 91
Author: Hassan Nadeem
Advertisement
Chapter 19
High absolute cost
...
To Producer
Increases sales
...
High profits
...
Brand image is created
...
May result in price war among advertisers
...
Imitation brand
...
Awareness of different brands in the market
...
Better quality goods at cheap rates due to competition
...
Higher
prices of goods
...
Misleading claims
...
Customers become confused
...
Advertising Tools/Devices
Techniques used by the advertiser in his promotion to appeal their target market, develop
their interest, activate their desire and induce action
...
Gender
2
...
Music
4
...
Economy
6
...
Manliness
www
...
com
8
...
Family Love
10
...
Comic/Animation
12
...
Safety
14
...
Daily circulation
...
Low cost per exposure
...
Reach only literate people
...
Poor quality advertisement
No audio/visual impact
...
Better quality
...
Still cheap
...
Disadvantages
Inflexible
...
No audio/visual impact
...
Radio
Advantages
Wide coverage
...
Can reach illiterate people
...
(Ads between programs)
Low cost
...
Exposure life is very short
...
Becoming less popular
...
Lost cost per exposure
...
Disadvantages
High absolute cost
...
Fail to get attention
...
2
...
4
...
Cost
...
Type of product
...
Market
...
O-Alevel
...
Includes detail or not
...
Teenagers/Housewives/Professionals
...
Page 89 of 91
Author: Hassan Nadeem
Advertisement
Chapter 19
6
...
Does government allow such types of ads
...
O-Alevel
...
Creates advertising plan by taking basic information about client’s business,
marketing strategies, budget and target market
...
Media Department
•
•
Makes sure that the message reaches the required market
...
Production Department
•
Responsible for set designing and shooting of ad
...
Government Legislation
2
...
www
...
com
Page 91 of 91
Author: Hassan Nadeem
Title: o level notes
Description: it helps to those are studying business studies and mathematics
Description: it helps to those are studying business studies and mathematics