Topics in CommerceHistorical background of commerce in Nigeria Disadvantages of barter system Contract of Employment: Terms of employment contract 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
Academic Questions in Commerce
In commerce, the concept of paying in advanced is termed _____.
A. Advanced payment
B. Up payment
C. Forward payment
E. Uphill payment
In commerce, the concept of 'buy now, pay later' is termed _____.
A. Unadventurous payment
B. Buy on credit payment
C. Deferred payment
D. Postponed payment
E. Owed payment
F. Future payment
In commerce, which of the following is false with regards to a commodity?
A. A commodity must always have a market value
B. Rendered services are also instances of commodities
C. Products applicable to commodities can be bought or sold with money
D. A commodity must be standardized
E. A commodity must be usable upon delivery
F. Commodities can be traded in the futures market
Whatever is being marketed must always provide value to its potential consumers.
Which of the following is not a branch of marketing?
D. Search Media Optimization
E. Social Media Optimization
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.
Commerce is often regarded as the life wire or 'life blood' of a country since its absence can bring it to its knees.
In simple terms, commerce refers to all activities concerned with the exchange of goods and services, especially on a large scale.
The historical background of trade in Nigeria commenced through a system of commerce termed 'trade by barter'. The barter system was pronounced as a result of subsistence farming which was practiced by most Nigerian families at that time.
The barter system, popularly known as trade by barter, or bartering, refers to a form of trading without the use of money, debit cards, credit cards, or another financial medium of exchange; rather, goods and services are directly exchanged.
The image below shows an instance of trade by barter.
Another instance of trade by barter is seen when a farmer who own yams, but in need of vegetables exchange his yams with another farmer who has vegetables, but need yams. With such commercial action, both farmers get their needs through the barter system.
It is noteworthy to state that the Nigerian colonial masters also practiced bartering with Nigerians. They gave traditional leaders objects like gun, gunpowder, mirrors and clothes in exchange for their people as slaves. Report has it that over 3.5 million slaves were shipped from Nigeria.
Trade by barter is considered the first method of commercial activity in the globe. Prehistoric humans were said to have traded animal skins or services for food ab initio.
Although the barter system served the purpose of commerce, it still comes with some drawbacks.
The commencement of trade through the trans-sahara route opened up commercial activities internationally for Nigeria. In those days, this form of trade requires the use of animals such as camels, horses, donkeys and mules as means of transportation.
For human porterage to work at that time, caravan routes were created along the desert, linking Nigerian traders with their Northern African and Arab merchants. The caravan routes led into various Nothern Nigerian states, where their traditional rulers exchanged goods via trade by barter with their Arab counterparts. In this regard, products like kolanuts, gold, hides and even slaves were exchanged for items like mirrors, books, clothes, weapons and so on. The Nothern Nigerian state of reference include Kano, Kaduna, Kastina and Bornu respectively.
Around the 15th century, missionaries from Europe were sent to Nigeria. Here, they carried out various commercial activities and exploration. They came along with weapons, mirrors, combs, books, and clothes which they exchanged with various Nigerian leaders. Unfortunately, some of these leaders gave their people in exchange (as slaves), and this was a sad reality in Nigeria and other African countries.
Notable ports in Nigeria where slave trade were perpetrated include Badagry in Lagos, Bonny and Opobo in Rivers, and Calabar, the capital of Cross River state.
Since this sort of commercial activity was quite popular in Rivers state, king Jaja of Opobo, who was once a victim of slave trade, became a hero through his attempt to end slave trade in that region, while simultaneously fostering commerical activities (through the sale of palm oil) from Nigeria to various western countries.
King Jaja brought prosperity to his kingdom through his actions which made Opobo a massive commercial hub in Nigeria at that time. He effectively monopolized the trade of palm oil by barring Europeans as middlemen. Around the year 1870, he sold 8,000 tons of palm oil directly to the British people, while also shipping palm oil directly to Liverpool.
Slave trade in Nigeria was ended by the British government around the 1940s, and this led to a major commercial breakthrough in the country Nigeria, a nation predominantly excellent in its agricultural produce.
Nigeria became a force to be reckoned with in international trade through their exportation of cash crops like cocoa, groundnut, rubber and oil palm. During this period, the Nigerian Naira had a greater value than the American Dollar, yet crude oil wasn't even in the Nigerian picture then. Companies like the United African Company (UAC) and Royal Niger Company were established.
Nigeria's discovery and exploration of crude oil in the 1960s brought about a significant change in the nation's commercial activities. The export of crude oil (petroleum) to other countries became massively profitable to the Nigerian government to an externt that the agricultural sector dwindled. This was the period of Nigeria's 'oil boom', and the government had excess money in its revenue and reserves. Infrastructural facilities such as airports, seaports, roads and communication systems were built during this time. As you may have guessed, the iconic third mainland bridge in West Africa's commercial capital (Lagos) was built during this period (1980 - 1990) by Julius Berger Nigeria PLC.
The period of oil boom in Nigeria occured between 1960 and 1973. Nigeria's oil output skyrocketed from a little over 5 million barrels to over 600 million barrels. In a similar fashion, the Nigerian government oil revenues jumped from about 66 million in 1970 to over 10 billion naira in 1980.
At the moment of writing this article (July 2023), commercial activities had increased massively in Nigeria, especially Lagos. In fact, Lagos in Nigeria ranks among the leading commercial cities in Africa, alongside Cairo and Johannesburg respectively.
Apart from Lagos, other commercial hubs in Nigeria include Onitsha, Ogun, Kano, Warri, Port Harcourt, Abia, Ibadan, Benin, Kaduna and Calabar.
It should be noted that the evolution of technology, and presence of Good governance will once again reestablish Nigeria as the Giant of Africa.
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Amazing facts in Commerce
According to research, the problem isn't the amount of food produced; the actual problem is the distribution of these foods. In this regard, we actually produce enough food to feed everyone on earth, but their distribution remains an underlying problem
With Amazon Smile, you can donate 0.5 percent of your purchases to a charity of your choosing
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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
The theory of international trade is guided by the principle of comparative cost. This principle was propounded by David Richards.
The principle of comparative cost states that a country should specialize in the production of goods and services in which they have a greater comparative advantage or the least comparative disadvantage.
Below is an instance on the principle of comparative cost.
Now, let us assume we have two countries producing and exporting rice and beans respectively.
From the above instance, it can also be said that country B is at a disadvantage with regards to the production of rice and beans. Infact, it has a bigger comparative disadvantage with regards to beans production.
The point to note here is this: A country utilizing the principle of comparative cost will always produce quality goods and services at a cheaper cost.
No single country manufactures all the goods and services in our world. This implies that every country of the world relies on certain goods and services imported (or brought in) from other countries.
Foreign trade is defined as the exchange of goods, services and capital between two or more countries.
Foreign trade is also termed as international trade.
Division of labour can be defined as the act of splitting job process into a number of different processes such that each process is done by a different person or group of persons.
Through the process of division of labour, one worker may constantly perform a specific aspect of the job and as a result, may become specialized in that area.
The result of specialization in the different department of a job will imply the production of goods with better quality.
Forms of division of labour relates the various ways through which division of labour may be carried out.
Take for instance, within a country, one state may choose to specialize in the production of a cars while another specializes in a different area, let's say agriculture.
Below are the forms of division of labour
Complex division of labour
Occupational division of labour
Geographical division of labour
Balance of Trade can be defined as the total value of goods imported and exported by a country during a specific period; usually yearly or annually.
Balance of trade can be either positive, negative or zero
A positive balance of trade implies that a country exports more goods than its imports. China as a country is likely to have a positive balance of trade since it exports a variety of goods to other countries.
A negative balance of trade is often considered as an unfavorable balance of trade since the country's importation exceeds its exportation. Nigeria (as at 2018) is likely to have a negative balance of trade.
A zero balance of trade is reached when imports equal exports.