Commerce

Production: Definitions and examples of production

len Alfred Ajibola - Tue, 07th May, 2019 @ 7:05 PM

Topics in Commerce

Principle of Marketing: People as a marketing mix and their importance Principle of Marketing: Positioning as a marketing mix Principle of Marketing: Packaging as a marketing mix Elements of promotion in marketing mix Principle of Marketing: Promotion as a marketing mix Principle of Marketing: Place as a marketing mix Principle of Marketing: Price as a marketing mix Principles of Marketing: The seven principles of marketing mix Factors necessary for division of labour Disadvantages of division of labour Advantages of division of labour Concept of Outbound Marketing Inbound Marketing explained Types of production in commerce Commerce: Definitions and Scopes of Commerce Differences between balance of trade and balance of payments Balance of payment deficit and balance of payment surplus Disadvantages of foreign trade Divisions of foreign trade Advantages of foreign trade

Academic Questions in Commerce

Please check out our Test Your Knowledge page to see all Questions and Answers

Whatever is being marketed must always provide value to its potential consumers.

  • A. True

  • B. False

Which of the following is not a branch of marketing?

  • A. Merchandising

  • B. Promotions

  • C. Forex

  • D. Search Media Optimization

  • E. Social Media Optimization

  • F. Copywriting

Which of the following is not a characteristics of commerce?

  • A. The only aim of commerce is to make profit

  • B. It is a discontinuous process after profit had been made

  • C. It is accompanied with challenges and uncertainties

  • D. It is 100% business and economic activity

  • E. Transaction processes are always involved in commerce

  • F. It connects the process of production and marketing

Which of the following is not a function of commerce?

  • A. Unnecessary in times of emergencies like earthquakes and wars

  • B. Facilitates mass production of goods

  • C. Influences transportation network within and outside a state

  • D. Attempts to satisfy human needs and wants

  • E. Improves the standard of living

  • F. Acts as an online business link between buyers and sellers

One of the following is a form of division of labour.

  • A. Agonistic division of labour

  • B. Antagonistic division of labour

  • C. Mutualistic division of Labour

  • D. Advanced division of labour

  • E. Solitary division of labour

  • F. Occupational division of labour

A place where people buy homogenous goods in large quantities is called _____.

  • A. Wholesaler's Market

  • B. Goods Market

  • C. Products Market

  • D. General Market

  • E. Commodity Market

  • F. Forex Market

Any activity aimed at getting people interested in a company's product or service is termed _____.

  • A. Commerce

  • B. Economics

  • C. Financial Accounting

  • D. Marketing

  • E. Production

  • F. Distribution

Which of the followings isn't a characteristics of commerce?

  • A. Commerce is solely aimed at making profit

  • B. Commerce is 100% business

  • C. Commerce is a discontinuous process because it eventually satisfies human needs

  • D. Commerce is accompanied by uncertainties

  • E. Transaction processes are always done in commerce

  • F. Commerce connects the processes of production and marketing

LEN ACADEMY SMART SCHOOL SOFTWARE

Image

Read more on its smart academic features here

Meaning of Production:

Let us begin by explaining the concept of production using the analogy below:

There is something you probably would like. It could be a phone, car, console game, movie or something else. All of these things would have underwent a series of transformation processes before you could enjoy them. To this end, the goal of production is to indeed satisfy your demand for these transformed things.


According to Parkinson and Bates,

Production is defined as an organized activity of transforming resources into finished products in the form of goods and services.

Please read on the types of production here.


From the above definition, the objective of production is therefore to satisfy the demand for goods and services. The transformed resources of production could be a car, phone or something else.

Please read more on demand and law of demand here.


It is worthy of note to state that whenever services are rendered, such rendered services are also considered as production. This is true because the rendered services satisfy the needs or wants of the recipient or consumer.

Therefore, people who provide services like hair dressers, security men and public bus drivers are considered productive; and whatever service had been rendered can appropriately be referred to as production.

It is important to state that consumers will always pay for the end product of production (which are goods and services).

Please read on the agencies of consumer protection here.


Importantly, recall that the main purpose of production is to satisfy human needs and wants.

  • Needs are anything considered necessary for an individual or a group of persons. Personally, they may be referred to your required goods and services. Your needs are necessary and you consider them very important for your well-being. Examples are food, clothes and shelter.

  • Wants are always desired. In fact, they are your desired goods and services. They are not necessarily required and you can do without them. Examples of wants are expensive cars and watches.
    Please read more on scale of preference and opportunity cost here.


The point is: 'anything made or created that isn't wanted nor needed is not considered as production'.

From what had been written above, we can further defined production thus:


Production is any activity carried out to satisfy the needs and wants of humans; who would make payments or a form of exchange in return.


An exchange is always involved in production. It will involve a form of monetary exchange with goods or rendered services.

Please read on bank notes and coins and characteristics of legal tender here.


Note: When a person renders a service for free or satisfies human needs/wants for free, such is not considered as production.

Please read more on community and volunteer services here.


In conclusion, production is always an economic activity. This means that it involves money earning and money spending.

Please read on meaning and scope of commerce here.

Need more answers to this topic? Please enter your search below:

Kindly share this article via the links below:

len

Alfred Ajibola is a Medical Biochemist, a passionate Academician with over 10 years of experience, a Versatile Writer, a Web Developer, a Cisco Certified Network Associate and a Cisco CyberOps Associate.

Please click here to follow Len Academy on Google News.

Please like and follow our official facebook page here for great educational write-ups.

You can follow Len Academy on twitter here.Thank you.

Please Register here or Login here to contribute to this topic by commenting in the box below.

Amazing facts in Commerce

With Amazon Smile, you can donate 0.5 percent of your purchases to a charity of your choosing

Check it out here

The brewery, Sankt Gallen in Japan, produces a beer called Un Kono Kuro from elephant's dung

North Korea and Cuba are the only countries in the world where you can't buy Coca-Cola

Amazon is an e-commerce website launched in 1995. It did not make any profit for its first seven years.

Amazon's first profit was in 2003. Its founder 'Jeff Bezos' is the richest man in the world as at 2018/2019

NOTABLE POINTS IN Commerce

Marketing is a broad field of study. Below are branches or divisions of marketing:

  • Advertising

  • Search Engine Optimization (SEO)

  • Merchandising

  • Branding

  • Promotions

  • Copywriting

  • Social Media Optimization (SMO)

  • Event planning

  • Customer Relationship Management (CRM)

  • Graphic Design

  • Internet Marketing

Marketing is defined as any activity or process aimed at getting people interested in a company’s product or service.

The processes utilized in marketing can take place via posters, public relations campaigns, handbills, social media, radio and television, buses, walls along the streets, the internet or just anywhere.

Below are some of the branches of marketing:

  • Advertising

  • Search Engine Optimization (SEO)

  • Merchandising

  • Branding

  • Promotions

  • Copywriting

  • Social Media Optimization (SMO)

  • Event planning

  • Customer Relationship Management (CRM)

  • Graphic Design

  • Internet Marketing

Please read more on marketing here

Commerce can be defined as the exchange of goods and services, usually for money and on a large scale that will require the transportation of such goods and services.

Commerce is crucial (important) to the life of any nation for the following reasons:

  1. Commerce facilitates the exchange of goods and services which everyone can enjoy, regardless their location or whether the goods is produced within or outside their country.

  2. Commerce creates an awareness of the existence of goods and services through advertising.

  3. Commerce offers employment to a very large number of people in a nation.

  4. Commerce promotes rapid transfer of both oral and written messages through communication.

  5. Commerce determines the standard of living in a nation. This is because the extent of commercial activities is crucial to wealth of a nation.

  6. Commerce makes for the protection against risk in day to day business operations.

  7. Through commerce, there is a steady supply of goods in a nation. This is because commerce ensures that goods produced are stored until needed.

Please read on the functions and characteristics of commerce here

A public company is not owned by an individual; rather it's usually owned by groups or a large number of people.

The shares of a public company are traded freely on the stock exchange.

Below are some features of a public company:

  1. A public company must receive it’s training certificate to commence business.

  2. The minimum membership is two while the maximum membership is limitless.

  3. A public company has a legal status. It can sue and be sued.

  4. A public company files and publishes its annual reports, including its accounts.

  5. The liability of its members is limited.

  6. The shares are easily transferrable through the stock market.

  7. A public company can issue debentures to be secured as its assets.

Please read on limited liability company, its advantages and disadvantages here

There are seven elements of the marketing mix. These are:

  1. Product: Anything thing that satisfies a consumer’s need is referred to as a product. Product may come in the form of manufactured goods, raw materials or services.

  2. Price: Price is defined as the exchange value of goods and services supplied. In simple terms, it serves as a mechanism of exchange.

  3. Promotion: It involves all the processes that concerns with how business organizations should inform their customers about its product. If done properly, the demand of product will be increased. Promotions can take the form of advertising, search engine optimization, social media marketing, trade fairs exhibition and so on.

  4. Place: The place as a marketing mix concerns variables such as location and transport facility where the distribution of goods and services take place.

  5. Packaging

  6. Positioning

  7. People

Think of marketing mix as the set of marketing tools that an industry or company uses to drive or accomplish its marketing objectives in the target market

Please read on the principles of marketing mix here