Commerce notes

Commerce notes
Chapter 2

• Selling is the providing of goods or services for a consideration- usually in the form of money


• Sellers must set prices for what they provide. I.e. goods or services. Prices may either be fixed or      varied but only if the seller is willing to bargain (come to a compromise)


• The price of a product must cover its buying/production price and a profit of a certain amount usually set      as a percentage


• There are 2 types of costs –fixed and variable


• Price leadership when a business by virtue of size and influence set the prevailing price for a                               product/service


• Product differentiation Strategies by a seller to show that their product is superior in some way to that of                          a competitors


• Discounts Reduction in the normal price of a good/service


• Some items are sold in different places or in different means so to attract certain audiences for example:

     Fashion, clothes and cosmetic may be found at a retail store
     Where as an encyclopedia or a Vacuum cleaner door-to-door sales clerk may sell

• Companies need to evaluate promotion /selling techniques so to maximize from fit. They may analyze sales figures or specific markets for profit analysation.


• Not all techniques work for all age groups for example some techniques appeal to some groups. For this reason the community is broken up into groups consisting of:

                                             Teenagers
                                             Lower, Middle and Upper class
                                             Family
                                             Retiree’s  etc.

• ADMA (Advertising Direct Marketing Association) – creates regulations for companies to work under whilst creating an add so that the advertisement isn’t misleading etc.


• 4 p’s            Product

     Marketing      Price
     Mix          Placement
               Packaging

• SWOT     Strength

               Weaknesses
               Opportunities
               Threats

• Product research is vital in today’s market and changing society. The reason for this being due to globalization more and more products are now available on demand for the average consumer. Therefore, to make sure that you have set out the right targeted audience and you realize what strengths and weaknesses that your product has it is always advisable to get feedback from the community. This can be done in forms of surveys or leaflet etc.

• Niche market A selected market for a selected amount of people

• Market share An expected given percentage of the total market

• Advertising Providing information to the public about a product/service convincing them to buy it

Chapter 9

• Global economy An economy that extends beyond the barriers of merely 1 country/nation based on                          international trade and investment


• Globalization The process in which international barriers are being broken down. Allowing for free                          movement of  ideas, trade and people


• TNC’S Generally very large companies that operate in more than 1 single nation also known as                          Multinational corporations


• Competitive advantage Gains made by countries that specialize and trade their surplus

• International trade is based on the ideology that countries specialize in providing certain goods/services to produce a surplus and trade these goods/services for money for which in return they can buy good/services that the country cannot produce.


• Benefits of international trade are

Allows businesses to grow
Provides employment
Encourages efficiency
Wider choice of goods for consumers
Lower prices
Increased standard of living.

• Balance repayments The difference in value between a countries imports and exports


• Current account surplus/deficit Where the value of either imports or exports is greater than the other resulting in the country having a profit or loss.


• Foreign investment


• Means to balance exports and imports

Import restrictions
Reduce the amounts of goods already produces in Australia
Increase value of exports
Focus on products that are on demand

• If in a certain year a deficit is achieved than the Australian government can finance by selling assets/land to foreign countries or investors

All Ordinaries Index               Australia
Dow Jones Industrial Average     America
Nikkei                         Japan
Hang Seng Index               Hong kong
NASDAQ                    World wide
FTSE                         UK

• Merger When 2 companies join to form 1


• Acquisition When 1 company buys another


• Bilateral Involving 2 parties or countries


• Multilateral Involving more than 2 parties


• Tariff  A tax put on all goods imported into a country


• Quota A set quantity of goods that can be imported o=into a country


• Speculators People who buy and sell foreign currency making profits as certain currencies rise and fall.

Chapter 15

• It is said that an “Entrepreneur” is the man that runs the business. He/she;      Manages

                                                       Organizes
                                                       And takes responsibility for the                                                        business
Characteristics required to run business;     
Hard work
Leadership
Courtesy
Handle stress
Competitive spirit
Accept responsibility
Adaptability
Concern for business and employees

• Entity  Something that exists on its own


• Selecting business opportunities:

Research market
How long with there be demand for your product
Consider cost
Pricing
Packaging
Placement
Product
Keep financial records
How will you sell?
Deal with public
Money is needed to establish a business
Business structure
SIZE –          small
               Middle
               Large

Ownership     Sole trader
               Partnership
               Company
               TNC
               Co-operative
               Government/public enterprise

Industry      Primary     Mining
                         Agriculture
                         Forestry
                         Fishing
               Secondary     Processing
                         Construction
               Tertiary     Services
                         Information Processor
                         Service provider
Proprietor The owner/ part owner of a business
Unlimited Liability The owner is responsible for all debts
Capital the money originally invested into a company by the owner/s

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