Media Head Video Context
What is Commerce?
Commerce is defined as the exchange of goods and services among individuals and business entities. In academics, Commerce is considered to be one of the most popular streams of education along with Science and Arts. Commerce deals with the various aspects of business, trade, accounting, financial information/transactions and merchandising. Commerce plays a significant role in the development of nations and its citizens by facilitating trade between nations or within the nation.
Accountancy
Accountancy is the practice of recording, allocating and outlining trade transactions for a business. It provides an assessment of management concerning the financial outcomes and ranking of an establishment. A few accountancy tasks include recording, classification and reporting of a transaction. When any information is prepared as a report for individuals or companies to be used outside the organization, the process is known as ‘financial accounting’.
Business Studies
Business Studies is a vast subject in the social sciences that allows an in-depth study of a degree of specialities. This would include Finance, Accountancy, Marketing and Organisation. It gives an individual a substantial foundation and understanding of how a business should be operated while enhancing communication, operation, strategy and commercial activity skills.
Economics
Economics can be explained in several different ways. It’s the study of shortage, the study of how people make optimum utilization of resources. It helps people to understand how an individual, companies, and governments make decisions on declared resources to satisfy desires and requirements. It also helps determine how an individual or an organization should organize and coordinate with each other to determine the expected outcome.
Informatics Practices
Informatics Practices is a stream of software-related research. The subject primarily covers software, networking concepts and coding. This field corresponds to Computer Science, while excluding the hardware concepts. It canocentrates more on networking concepts than on Computer Science.
Mathematics
Mathematics is an important part of Commerce as all the methods of economics depend on numbers. With a basic knowledge of Maths principles, an individual and an organisation will be able to understand where they position themselves financially in the present, and in the future. Most organisations use Mathematics in Inventory Management, Marketing, Accounting, Financial Analysis and Sales Forecasting.
Statistics for Economics
Many ideas in economic theory, such as functional relationship among variables, are asserted in terms of symbols, algebra, calculus, etc. To examine several economic and social phenomena events, economic theories are better understood and analysed, according to the appropriate numbers. The study of numbers, which is also known as Statistics, represents facts on the basis of a mass of figures. These statistics help in a comparison of facts.
| 1 |
Evolution and Fundamentals of Business |
|
|
| 2 |
Forms of Business Organisations |
|
| 3 |
Public, Private and Global Enterprises |
|
|
| 4 |
Business Services |
|
| 5 |
Emerging Modes of Business |
|
|
| 6 |
Social Responsibility of Business and Business Ethics |
|
| 7 |
Sources of Business Finance |
|
|
| 8 |
Small Business and Entrepreneurship Development |
|
| 9 |
Internal Trade |
|
|
| 10 |
International Business |
|
- Chapter 1 Nature and Purpose of Business
- Chapter 2 Forms of Business Organisation
- Chapter 3 Private, Public and Global Enterprises
- Chapter 4 Business Services
- Chapter 5 Emerging Modes of Business
- Chapter 6 Social Responsibilities of Business and Business Ethics
- Chapter 7 Formation of a Company
- Chapter 8 Sources of Business Finance
- Chapter 9 Small Business
- Chapter 10 Internal Trade
- Chapter 11 International Business-I
- Chapter 12 International Business-II
- Chapter 1 Nature and Significance of Management
- Chapter 2 Principles of Management
- Chapter 3 Business Environment
- Chapter 4 Planning
- Chapter 5 Organising
- Chapter 6 Staffing
- Chapter 7 Directing
- Chapter 8 Controlling
- Chapter 1 Financial Management
- Chapter 2 Financial Markets
- Chapter 3 Marketing
- Chapter 4 Consumer Protection
- Chapter 5 Entrepreneurship Development
Part A: Foundation of Business
Unit 1: Evolution and Fundamentals of Business
1) History of Trade and Commerce in India: Indigenous Banking System, Rise of Intermediaries, Transport, Trading Communities: Merchant Corporations, Major Trade Centres, Major Imports and Exports, Position of Indian Sub-Continent in the World Economy.
2) Business – meaning and characteristics
3) Business, profession and employment Concept
4) Objectives of business
5) Classification of business activities – Industry and Commerce
6) Industry-types: primary, secondary, tertiary Meaning and subgroups
7) Commerce-trade: (types-internal, external; wholesale and retail) and auxiliaries to trade; (banking, insurance, transportation, warehousing, communication, and advertising) – meaning
8) Business risk-Concept
Unit 2: Forms of Business organisations
1) Sole Proprietorship-Concept, merits and limitations.
2) Partnership-Concept, types, merits and limitation of partnership, registration of a partnership firm, partnership deed. Types of partners
3) Hindu Undivided Family Business: Concept
4) Cooperative Societies-Concept, merits, and limitations
5) Company – Concept, merits and limitations; Types: Private, Public and One Person Company – Concept
6) Formation of company – stages, important documents to be used in formation of a company
Unit 3: Public, Private and Multinational Company
1) Public sector and private sector enterprises – Concept
2) Forms of public sector enterprises: Departmental Undertakings, Statutory Corporations and Government Company
Unit 4: Business Services
1) Business services – meaning and types. Banking: Types of bank accounts – savings, current, recurring, fixed deposit and multiple option deposit account
2) Banking services with particular reference to Bank Draft, Bank Overdraft, Cash credit. E-Banking meaning, Types of digital payments
3) Insurance – Principles. Types – life, health, fire and marine insurance – concept
Unit 5: Emerging Modes of Business
1) E – business: concept, scope and benefits
Unit 6: Social Responsibility of Business and Business Ethics
1) Concept of social responsibility
2) Case of social responsibility
3) Responsibility towards owners, investors, consumers, employees, government and community
4) Role of business in environment protection
Part B: Finance and Trade
Unit 7: Sources of Business Finance
1) Business finance: Concept and Importance
2) Owners’ funds- equity shares, preferences share, retained earnings, Global Depository receipt (GDR), American Depository Receipt (ADR) and International Depository Receipt (IDR) – concept
3) Borrowed funds: debentures and bonds, loan from financial institution and commercial banks, public deposits, trade credit
Unit 8: Small Business and Entrepreneurship Development
1) Entrepreneurship Development (ED): Concept, Characteristics and Need. Process of Entrepreneurship Development: Start-up India Scheme, ways to fund start-up. Intellectual Property Rights and Entrepreneurship
2) Small scale enterprise as defined by MSMED Act 2006 (Micro, Small and Medium Enterprise Development Act)
3) Role of small business in India with special reference to rural areas
4) Government schemes and agencies for small scale industries: National Small Industries Corporation (NSIC) and District Industrial Centre (DIC) with special reference to rural, backward areas
Unit 9: Internal Trade
1) Internal trade – meaning and types services rendered by a wholesaler and a retailer
2) Large scale retailers-Departmental stores, chain stores – concept
Unit 10: International Trade
1) International trade: concept and benefits
For more solutions and study materials of Class 11 Business Studies, visit BYJU’S or download the app for the best learning experience.
What is Receipt and Payment Account?
Receipt and payment account functions as a summary of cash payments and receipts of an organisation during an accounting period. It provides a picture of the cash position of a Not-for-Profit organisation. It does not differentiate between the receipts and payments, whether they are of capital or revenue in nature and records all cash and bank transactions of both capital and revenue nature.
Receipt and payment account does not include any non-cash transactions such as depreciation. The Receipt and payment account is prepared at the end of an accounting period.
Features of Receipt and Payment Account
Below mentioned are some of the features of Receipt and Payment Account :
1.It does not include any transactions that are not cash or bank items.
2.It shows all cash payments and receipts without making any difference between capital and revenue
- Receipt and Payment Account starts with the opening balance of cash and bank and ends with ending balance of cash and bank
- It is prepared on the last day of the accounting period of the business organisation.
- All cash and cheque receipts are recorded in the debit side while all cash and cheque payments are recorded on the credit side.
What is Promotion? Types of Promotion
Meaning of Promotion
“What is Promotion?” Promotion is a marketing tool, used as a strategy to communicate between the sellers and buyers. Through this, the seller tries to influence and convince the buyers to buy their products or services. It assists in spreading the word about the product or services or company to the people. The company uses this process to improve its public image. This technique of marketing creates an interest in the mindset of the customers and can also retain them as a loyal customer.
Promotion is a fundamental component of the marketing mix, which has 4 Ps: product, price, place, and promotion. It is also an essential element promotional plan or mix, which includes advertising, self and sales promotion, direct marketing publicity, trade shows, events, etc.,
Some methods of this procedure contain an offer, coupon discounts, free sample distribution, trial offer, buy two items in the price of one, contest, festival discounts, etc. The promotion of a product is important to help companies improve their sales because customers reaction towards discounts and offers are impulsive. In other words, promotion is a marketing tool that involves enlightening the customers about the goods and services offered by an organization.
Also read: What are the planning process of marketing?
Types of Promotion:
Advertising-
It helps to outspread a word or awareness, promote any newly launched service, goods or an organization. The company uses advertising as a promotional tool as it reaches a mass of people in a few seconds. An advertisement is communicated through many traditional media such as radio, television, outdoor advertising, newspaper or social media. Other contemporary media that supports advertisement are social media, blogs, text messages, and websites.
Direct Promotion-
It is that kind of advertising where the company directly communicates with its customers. This communication is usually done through various new approaches like email marketing, text messaging, websites, fliers, online adverts, promotional letters, catalog distributors, etc.
Sales Promotion-
This utilizes all sorts of a marketing tool to communicate with the customers and increase sales. However, it is for a limited time, used to expand customers demand, refresh market demand and enhance product availability
Self-promotion-
It is a process where the enterprises send their agents directly to the customers to pitch for their product or service. Here, the response for the feedback of the customer is prompt and therefore, easy to build trust.
Public Relation-
Popularly know as PR is exercised to broadcast the information or message between a company (NGO, Government agency, business), an individual or a public. A powerful PR campaign can be valuable to the company.
Online Promotion-
This includes almost all the elements of the promotion mix. Starting from the online promotion with pay per click advertising. Direct marketing by sending newsletters or emails.
Key Points of Promotion
- It is a communication tool that incorporates all the elements used to spread awareness and convince customers to buy good and services
- It is applicable only for short term sales
- It is one of the variables of the marketing mix
- The effect of promotion is short term
- The result or outcome of the promotion is immediate
- It is an economic marketing tool as compared to advertising
- It can be used for all sorts of businesses irrespective of the size, brand of a company
Marketing vs Branding
What is Marketing?
Marketing is a process that involves identifying the potential customer, analysing their needs, targeting them with the product and services and inculcating an interest to buy a product or services. Marketing is a process that brings both the company and the customers together to exchange goods and services. The aim of marketing is not only selling a product or services but also building a relationship with the customer, maintaining that relation, and generate revenue for a long time. The essential elements of marketing, the 4P’s – Product, Price, Place and Promotion determines the growth of a product that leads to profitable sales.
What is Branding?
Branding is an amalgamation of different things like name, logo, sign, slogan that helps the customers to recognise and differentiate a company from other sellers. Branding involves creating a unique name, images, logos for a product that settles in the mind of the customers. The uniqueness helps the customers to recognise a particular product, establish the fondness and build trust. Brading is one of the marketing practices that aims to place a remarkable presence in the market, attract customers, develop confidence, enhance their experience and retain them for a longer time.
Given below in a tabular column are the differences between Marketing and Branding.
| Basis |
Marketing |
Branding |
| Meaning |
Marketing brings the company and the customers together for an exchange of goods and services |
Branding is a creative process that helps customers to remember a product by their name, logo, image, etc., |
| What does it do? |
Cultivates customers |
It builds trust |
| Influence |
Motivates customers to buy products immediately |
Influence customer to buy a product by leaving an impact in their mind |
| Creates |
Aims at creating customers need |
Creates a healthy and strong relationship with a customer |
| Policy |
Push customer to buy |
Pull customers to buy |
| Generates |
Needs |
Relationship |
| Target Audience |
Marketing is for business |
Branding is for Customers |
| Value |
Promotes intended value |
Creates value |
| Result |
Marketing results in sales |
Branding brings reputation |
Accounts Settlement: All You need to know
Meaning of Settlement Account:
Settlement account is an account that is used in Balance of Payment (BOP) accounting to keep track of central banks’ reserve asset dealings with one other. The official settlement A/c keeps track of transactions that involve foreign exchange reserves, bank deposits, special drawing rights (SDRs) and gold.
For this purpose, it disposes of all its assets for fulfilling all the claims that are against it. It should be noted that, subject to agreement among the partners, the following rules as furnished in Section 48 of the Partnership Act 1932 shall be applicable.
- Treatment of Losses: Losses that include lack of capital, will be paid :
- First out of gains
- Next out of the capital of partners
- Lastly, if required, by the partners independently in their profit sharing ratio (PSR)
- Application of Assets: The assets of the enterprise, that includes any sum that is contributed by the partners to make up insufficiency of capital, will be applied in the following order :
- In paying debts of the enterprise to the third parties
- In paying each partner commensurately what is due to him or her from the enterprise for advances as differentiated from the capital (i.e. partner’ loan)
- In paying to each partner commensurately what is due to him on a/c of capital
- The balance, if any, will be allocated among the partners in their profit sharing ratio (PSR)
Hence, the amount received from assets with contributions from partners, if needed, shall be utilised to pay the outside liabilities of the enterprise such as loans, bank overdraft, creditors, bill payables, etc., (it may be noted that secured loans have more pre-eminence over the unsecured loans); the balance should be pertained to repay advances and loans made by the partners to the enterprise.
Goodwill: How to Calculate Goodwill?
What is Goodwill?
Goodwill is an intangible asset associated with the purchase of one company by another. Specifically, goodwill is recorded in a situation in which the purchase price is higher than the sum of the fair value of all visible solid assets and intangible assets purchased in the acquisition and the liabilities assumed in the process. The value of a company’s brand name, solid customer base, good customer relations, good employee relations, and any patents or proprietary technology represent some examples of goodwill.
Goodwill Meaning in Accounting
Goodwill arises when a company acquires another entire business. The amount of goodwill is the cost to purchase the business minus the fair market value of the tangible assets, the intangible assets that can be identified, and the liabilities obtained in the purchase.
How to Calculate Goodwill
To calculate goodwill, we should take the purchase price of a company and subtract the fair market value of identifiable assets and liabilities.
Goodwill Formula:
Goodwill = P−(A+L)
where,
P = Purchase price of the target company
A = Fair market value of assets
L = Fair market value of liabilities
Types of Goodwill
There are two distinct types:
- Purchased: Purchased goodwill is the difference between the value paid for an enterprise as a going concern and the sum of its assets less the sum of its liabilities, each item of which has been separately identified and valued.
- Inherent: It is the value of the business in excess of the fair value of its separable net assets. It is referred to as internally generated goodwill, and it arises over a period of time due to the good reputation of a business. It can also be called as self generated or non-purchased goodwill.
For example, suppose you are selling an outstanding product or providing excellent service consistently. In that case, there is a high chance of an increase in goodwill.
Read More: Important Questions for Goodwill
Goodwill Accounting Treatment
There are five types of accounting treatment of goodwill at the time of admission of a new partner:
- When the amount of goodwill is brought in cash and not recorded in books.
- When the new partner brings his share of goodwill in cash and is retained in business.
- When the new partner does not bring his share of goodwill in cash.
- When goodwill already exists in the books.
- When goodwill is raised at its full value.
Goodwill Example
To put it in a simple term, a Company named ABC’s assets minus liabilities is ₹10 crores, and another company purchases the company ABC for ₹15 crores, the premium value following the acquisition is ₹5 crores. This ₹5 crores will be included on the acquirer’s balance sheet as goodwill. It is also recorded when the purchase price of the target company is higher than the debt that is assumed.
Factors Affecting Goodwill
The following factors have an impact on the goodwill, which are:
- Location of the business : A business which is located in a suitable location will have a more favourable chance of higher goodwill than a business located in a remote location.
- Quality of goods and services: A business which is providing a higher quality of goods and services stands a great chance of earning more goodwill than competitors who provide inferior goods and services.
- Efficiency of management : An efficient management results in increase in profit of the business which enhances the goodwill of the business.
- Business Risk : A business having lesser risk has a better chance of creating goodwill than a high risk business.
- Nature of business: It means the type of products that business deals with, the level of competition in the market, demand for the products and the regulations impacting the business. A business having a favourable outcome in all these areas will have a greater goodwill.
- Favourable Contracts: A firm will enjoy a higher goodwill if it has access to favourable contracts for sale of products.
- Possession of trade mark and patents : Firms that have patents and trademarks will enjoy monopoly in the market, which will contribute to the increase in the goodwill of the firm.
- Capital : A firm with a higher return on investment along with lesser capital investment will be considered by buyers as more profitable and having more goodwill.
Need for Valuation of Goodwill
- The difference in the profit-sharing ratio (PSR) amongst the existing partners
- Admission of a new partner
- Retirement of a partner
- Death of a partner
- Dissolution of an enterprise involving the sale of the business as a trading concern
- Consolidation of partnership firms
Methods of Valuation of Goodwill
The significant methodologies of valuation are mentioned :
- Average Profits Method
- Super Profits Method
- Capitalisation Method
What is Traditional Commerce vs E-commerce?
Traditional Commerce vs E-commerce
Overlooked are the days when business activities such as the exchange of goods and services for money, between 2 parties, had to take place in a traditional environment. The consumer going to the market, checking out a variety of goods, picking needed items, buying them and then paying the precise amount is what distinguishes traditional commerce. However, now with the advent of technological innovations, modern techniques of selling goods and services have arisen. For example, e-commerce, where people purchase and sell commodities via the Internet.
Both modes have their own merits and demerits, here, the students can learn the meaning of traditional commerce and e-commerce.
Traditional Commerce
Traditional commerce includes the exchange of goods and services between 2 people. As stated in the introduction, it is one of the traditional methods of purchasing goods and services. It is followed by everyone across the globe.
E-Commerce
E-commerce i.e., electronic commerce is similar to traditional commerce. It also includes the exchange of goods and services. The solitary difference is that it is handled online through an electronic network – the Internet. Now it has spread across to online social networks. With e-commerce, support, transactions and communication are done via the use of electronic communication. All trading activities including selling, ordering, buying, payments are executed over the internet.
This article is a ready reckoner for the students to learn the comparison between Traditional Commerce vs Ecommerce.
Comparison Table:
| TRADITIONAL COMMERCE |
E-COMMERCE |
| Meaning |
| Traditional Commerce comprises to be a branch of trade, which concentrates on the exchange of goods and services. |
E-commerce means executing the transactions or exchange of data, on the internet. |
| Accessibility |
| Limited |
Any time |
| Scope |
| Restricted to a definite area |
Across the globe |
| Business Relationship |
| Linear |
End-to-end |
| Marketing |
| One way |
One to one |
| Payment |
| Cash, Debit or Credit card, cheque, etc., |
Debit or Credit card, NEFT or Cash on Delivery (COD) etc., |
| Delivery of products |
| Instantly |
Takes some time |
Sales and Marketing Difference
What is Sales?
Sales refer to the exchange of goods and services in return for the money. It is a process to transfer goods from manufacturer to distributor, distributor to wholesaler, wholesaler to retailer and from retailer to the consumer. The primary object of sales is to increase revenue.
Generally, to promote sales of a product or services a special discount or offers are encouraged to attract the consumer. Few activities involved in strengthening the sales are:
- Demonstration of the product
- Establishing tie-up with various companies
- Customers satisfaction
- Building contacts
Also Check: Difference between Selling and Marketing
What is Marketing?
Marketing is a process that involves research and analysing customer requirement, according to which a company manufactures a product to satisfy their need. The marketing team regularly do market research to examine the likes and dislikes of customers or a group with different tools. In other words, marketing is all about discovering human needs and satisfying them with the desired product, thus resulting in sufficient income.
Few activities that are involved in Marketing:
- Market research
- Manufacturing of product
- Promotion of product
- Advertising of the product
- Selling the product
- After sell service
- Customer satisfaction
Must Read: What Is Marketing Mix?
This article is ready to reckoner for all the students to learn the difference between Sales and Marketing.
The above mentioned is the concept, that is elucidated in detail about ‘Difference between Sales and Marketing’ for the Commerce students. To know more, stay tuned to BYJU’S.
| Sales |
Marketing |
|
| Definition |
|
| Sales is a transfer of product from the manufacturer to the customer in exchange for the money |
Marketing is understanding the customers need and introducing a product |
|
| Approach |
|
| Product oriented approach is followed |
Customer oriented approach is followed |
|
| Strategy adopted |
|
| Sales follows push strategy |
Marketing adopts pull strategy |
|
| Target audience |
|
| Individuals and companies |
Target audience for marketing is the public in general |
|
| Tenure |
|
| Short-term |
Long-term |
|
| Primary Objective |
|
| Influence the target audience to become buyers of the product |
Identify customer requirements and make products that fulfills their requirements |
|
| Scope |
|
| Scope of sales is limited only towards product selling. |
Scope of marketing is varied and includes advertisement, customer support, after sales service etc. |
|
| Essential skills required |
|
| Good communication and selling skills |
Good analytical skills |
|
What is Management Audit?
Management Audit
A management audit is an independent and systematic analysis and evaluation of a company’s overall activities and performances. It is a valuable tool used to determine the efficiency, functions, accomplishments and achievements of the company.
The primary objective of the management audit is to identify errors in management activities and suggest possible changes. It guides the management to manage the operations most effectively and productively.
In other words, a management audit is involved in the evaluation and assessment of the management system and information in the various departments or the entire company. Its reach has been extended to review system and subsystem, authorisation, procedure, accountability, quality of data generated, quality of personnel, etc.,
The Scope of Management Audit:
A management audit is vast as compared to a financial review because it not only evaluates finance but also other features of a company. It has an efficiency for assessing management from top to lower level. Few main scopes of management audit are described below:
- Calculate the Effectiveness of the Management- It audits the entire level of management of a company.
- Execution of Principals and Policies- It reviews whether the policies and the principles deployed by the company is effective and successful.
- Locate and Examine the Differences-It helps to identify the differences in productivity and if the pattern set by the company is not fulfilled.
- Suggest for Improvement- The management audit suggests improvement in areas, e.g. purchase, sale, finance, administration, human resources, etc.,
Objectives Of Management Audit:
- Verify Efficiency- It aims at increasing productivity at all the levels of management and execution of policies.
- Give the Recommendation to Increase Efficiency- The management audit marks the incapabilities in various levels of management and provides suggestions to enhance the efficiencies.
- Evaluates the Potential of Policies and Planning- It audits and evaluates the policies and plannings structured by the management and judges if its appropriately implemented.
- Increase Profit- It helps to increase the profit margin by providing solutions to maximise the company’s resources in a valuable way.
What Is Marketing Mix – 4 P and and 7 P of Marketing
Definition of Marketing Mix
The marketing mix is defined by the use of a marketing tool that combines a number of components in order to harden and solidify a product’s brand and to help in selling the product or service. Product based companies have to come up with strategies to sell their products, and coming up with a marketing mix is one of them.
Table of Content
- Marketing Mix 4P
- 7Ps of Marketing
- Marketing Mix Example
- Marketing Mix Product
- Importance of Marketing Mix
- Questions on Marketing Mix
What is Marketing Mix?
Marketing Mix is a set of marketing tools or tactics, used to promote a product or services in the market and sell it. It is about positioning a product and deciding it to sell in the right place, at the right price and right time. The product will then be sold, according to marketing and promotional strategy. The components of the marketing mix consist of 4Ps Product, Price, Place, and Promotion. In the business sector, the marketing managers plan a marketing strategy taking into consideration all the 4Ps. However, nowadays, the marketing mix increasingly includes several other Ps for vital development.
What is 4 P of Marketing
Product in Marketing Mix:
A product is a commodity, produced or built to satisfy the needs of an individual or a group. The product can be intangible or tangible as it can be in the form of services or goods. It is important to do extensive research before developing a product as it has a fluctuating life cycle, from the growth phase to the maturity phase to the sales decline phase.
A product has a certain life cycle that includes the growth phase, the maturity phase, and the sales decline phase. It is important for marketers to reinvent their products to stimulate more demand once it reaches the sales decline phase. It should create an impact in the mind of the customers, which is exclusive and different from the competitor’s product. There is an old saying stating for marketers, “what can I do to offer a better product to this group of people than my competitors”. This strategy also helps the company to build brand value.
Price in Marketing Mix:
Price is a very important component of the marketing mix definition. The price of the product is basically the amount that a customer pays for to enjoy it. Price is the most critical element of a marketing plan because it dictates a company’s survival and profit. Adjusting the price of the product, even a little bit, has a big impact on the entire marketing strategy as well as greatly affecting the sales and demand of the product in the market. Things to keep on mind while determining the cost of the product are, the competitor’s price, list price, customer location, discount, terms of sale, etc.,
Place in Marketing Mix:
Placement or distribution is a very important part of the marketing mix strategy. We should position and distribute our product in a place that is easily accessible to potential buyers/customers.
Promotion in Marketing Mix:
It is a marketing communication process that helps the company to publicise the product and its features to the public. It is the most expensive and essential component of the marketing mix, that helps to grab the attention of the customers and influence them to buy the product. Most of the marketers use promotion tactics to promote their product and reach out to the public or the target audience. The promotion might include direct marketing, advertising, personal branding, sales promotion, etc.
What is 7 P of Marketing:
The 7Ps model is a marketing model that modifies the 4Ps model. As Marketing mix 4P is becoming an old trend, and nowadays, marketing business needs a deep understanding of the rise in new technology and concepts. So, 3 more new P’s were added in the old 4Ps model to give a deep understanding of the concept of the marketing mix.
People in Marketing Mix:
The company’s employees are important in marketing because they are the ones who deliver the service to clients. It is important to hire and train the right people to deliver superior service to the clients, whether they run a support desk, customer service, copywriters, programmers…etc. It is very important to find people who genuinely believe in the products or services that the particular business creates, as there is a huge chance of giving their best performance. Adding to it, the organisation should accept the honest feedback from the employees about the business and should input their own thoughts and passions which can scale and grow the business.
Process in Marketing Mix:
We should always make sure that the business process is well structured and verified regularly to avoid mistakes and minimise costs. To maximise the profit, It’s important to tighten up the enhancement process.
Physical Evidence in Marketing Mix:
In the service industries, there should be physical evidence that the service was delivered. A concept of this is branding. For example, when you think of “fast food”, you think of KFC. When you think of sports, the names Nike and Adidas come to mind.
Marketing Mix Example:
This article will go through a marketing mix example of a popular cereals company. At first, the company targeted older individuals who need to keep their diet under control, this product was introduced. However, after intense research, they later discovered that even young people need to have a healthy diet. So, this led to the development of a cereal product catered to young people. In accordance with all the elements of the marketing mix strategy, the company identified the product, priced it correctly, did tremendous promotions and availed it to the customers. This marketing mix example belongs to Honeycomb, one of the most renowned companies in the cereal niche. Following these rules clearly has managed to make the company untouchable by all the other competitors in the market.
This makes Honeycomb, the giant we know and love today, to eat as morning breakfast!
Marketing Mix Product
All products can be broadly classified into 3 main categories. These are :
- Tangible products: These are items with an actual physical presence such as a car, an electronic device, and an item of clothing or a consumer good.
- Intangible products: These are items that have no physical presence but can be felt indirectly. An insurance policy is an example of this. Online items such as software, applications or even music and video files are also intangible products.
- Services: Services are also intangible products but they are the result of an economic activity that does not result in ownership. It is a process that creates benefits for customers. Services depend highly on who is performing them and remain difficult to reproduce exactly.
Importance of Marketing Mix
The marketing mix is a remarkable tool for creating the right marketing strategy and its implementation through effective tactics. The assessment of the roles of your product, promotion, price, and place plays a vital part in your overall marketing approach. Whereas the marketing mix strategy goes hand in hand with positioning, targeting, and segmentation. And at last, all the elements, included in the marketing mix and the extended marketing mix, have an interaction with one another.
Difference Between Customer and Consumer
Marketing and advertising include many words that can be difficult for common people to understand. Likewise, many people think that the words Customer and Consumer have a similar meaning, but they have a different meaning from the marketer’s viewpoint, though they sound similar. There are various situations where we can understand that the customer and consumer can be the same person, but these words altogether have a different meaning.
Every human being on earth is either a consumer or a customer, in some way or the other and they are commonly misunderstood. However, a consumer is someone who consumes or uses the goods, and the customer is someone who purchases the commodity and makes the payment.
Click here to learn the difference between Management and Entrepreneurship
Sometimes, both the customer and consumer are the same individual, when an individual buys good for their personal use. However, they are not similar, therefore, this article will help you understand the difference between the two. All the marketing processes are aimed towards influencing customers’ behaviour, which means to influence the customer so that they take desired action expected by marketers.
Another important feature in the discussion between consumer vs customer is that customers can also be businesses that purchase and then resell goods or merchandises. In such concern, they are only customers and not consumers of the goods they buy because they are reselling it to the consumer to ultimately utilise the product. So let’s understand in this article what are the points that make the word customer and consumer different from each other.
Who is a Customer?
A customer is a person who buys goods and services regularly from the seller and pays for it to satisfy their needs. Many times when a customer who buys a product is also the consumer, but sometimes it’s not. For example, when parents purchase a product for their children, the parent is the customer, and the children are the consumer. They can also be known as clients or buyers.
Customers are divided into two categories:
- Trade Customer- These are customers who buy the product, add value and resell it. Like a reseller, wholesaler, and distributor, etc.
- Final Customer– These are the customers who buy the product to fulfil their own needs or desires.
Further, according to an analysis of the product satisfaction and relationship with the customers, the customers are divided into three kinds-
- Present Customer
- Former Customer
- Potential Customer
Do you know? What is the difference between dealer and distributor
Who is a Consumer?
A consumer is someone who purchases the product for his/her own need and consumes it. A consumer cannot resell the good or service but can consume it to earn his/her livelihood and self-employment. Any person, other than the buyer who buys the product or services, consumes the product by taking his/her permission is categorized as a consumer. In simple words, the end-user of the goods or services is termed as a consumer.
All individuals who engage themselves in the economy are consumers of the product. For instance, when a person buys goods from a grocery store for their family, you become a customer, as you are only purchasing the commodities. But, when they feed the grocery to other members of the family, they become the consumer.
Given below in a tabular column are the differences between Customer and Consumer.
| Customer |
Consumer |
| Definition |
| Customer is the one who is purchasing the goods. |
Consumer is the one who is the end user of any goods or services. |
| Ability to resell |
| Customer can purchase the good and is able to resell |
Consumers are unable to resell any product or service. |
| Need for purchase |
| Customers need to purchase a product or service in order to use it. |
For a consumer purchasing a product or service is not essential. |
| Motive of buying |
| The motive of buying is either for resale or for consumption |
The motive of buying is only for consumption |
| Is payment necessary |
| Must be paid by customer |
May or may not be paid by the consumer |
| Target group |
| Individual or Company |
Individual, family or group |
Types of Customers
In business, customers play a vital role. In fact, customers are the actual boss and responsible for a company to make a profit. A few different types of customers are:
- Loyal Customer- They are less in numbers but increase more profit and sales as they are completely satisfied with the product or service.
- Discount Customers- They are also regular visitors but buy when they are offered discounts or they purchase only low-cost goods.
- Impulsive Customers- These types of customers are hard to convince, as they don’t go for a specific product, but buy whatever they feel is good and fruitful at that particular point of time.
- Need-Based Customers- These customers buy only those products which they are in need of or habituated with.
- Wandering Customers- These are the least valuable customers as they themselves don’t know what to purchase.
Types of Consumers
A service or product producing firm has to recognise different types of consumers when they target them with its product to gain profits. Some of the different types of consumers are:
- Commercial Consumer- They buy goods in large numbers whether they need the product or not and sometimes associate special needs with their purchase orders.
- Discretionary Spending Consumers- They have unique buying habits and purchase a lot of clothes and electronic gadgets.
- Extroverted Consumer- They prefer brands that are unique and become a loyal consumer once they gain that trust as a customer.
- Inferior Goods Consumer- Consumer having low-income buy goods having low price.
Why are consumers important?
The importance of consumers in various avenues is presented below:
- Encourage Demand- They are the main root for the demand of any product. All manufacturers of goods and services produce various things according to the demand in the market.
- Create Demand for Various Products- Different consumers have several varieties of demand or an individual consumer can also demand various types of goods. These encourage the manufacturer to deliver various products in the market.
- Increase Demand for Consumer Goods- It creates demand for various consumer goods, like long-lasting, semi-durable and biodegradable goods.
- Enhance Service Diversification – Consumers not only utilise different types of products but also use diversified services to support the standard of living. Such as educational service and health service, transport and communication service, and banking and insurance service, etc. This will direct the development or improvement of the service sector in the economy.