Chapter 9 INTERNAL TRADE - BST class 11th

Lulu International Shopping Mall-Kochi

2

Select City Walk-New Delhi

3

Phoenix Market City-Mumbai

4

Elante Mall-Chandigarh

5

Phoenix Market City-Chennai

6

Fun Republic-Lucknow

7

Mantri Square Mall-Bangalore

8

Sahara Gunj Mall-Lucknow

9

Z Square-Kanpur

10

Neptune Magnet Mall-Mumbai

1

Wholesale trade and

2

Retail trade.

1

Soap,

 'Godrej No.1' and 'Godrej Shikakai 'Cinthol, 'Godrej Fair Glow'Godrej

2

Hair colorants

'ColourSoft' in hair , Godrej Renew Powder Hair Colour

3

liquid detergents

'Ezee'

manufacturing facilities

Seven locations at

1.Malanpur (Madhya Pradesh),

2.Guwahati (Assam),

3.Baddi- Thana

4.(Himachal Pradesh), Baddi-

5.Katha (Himachal Pradesh),

6.Pondicherry, Near Chennai and

7.Sikkim.

1 C

Connection and Assistance in distribution  

2 R

Risk

3 P

Purchase of goods

4 G

Grading   of goods

5 H

Help to retailers

1 C

Connection and Assistance in distribution  

Whole sellers Connect and Assist  in distribution of goods .They enable the producers not only to reach large number of buyers spread over a wide geographical area (through retailers), but also to perform a variety of functions in the process of distribution of goods and services.

2 R

Risk

They generally take the title of the goods and bear the business risks by purchasing and selling the goods in their own name.

3 P

Purchase of goods

They purchase in bulk and sell in small lots to retailers or industrial users.

4 G

Grading   of goods

They undertake various activities such as grading of products, packing into smaller lots, storage, transportation, promotion of goods, collection of market information, collection of small and scattered orders of retailers and distribution of supplies to them.

5 H

Help to retailers

They also relieve the retailers of maintaining large stock of articles and extend credit facilities to them.

1

S

Sells the goods in small quantities

2

P

Purchases a variety of products from the wholesale distributors and others

3

P

Promotes the sale of products through displays, participation in various schemes, etc.

4

A

Arranges for proper storage of goods

5

M

Market information collection

5

B

Bears business risks

6

C

Extends credit to the buyers

7

G

Grades the products

E

Expert advice

L

Large scale production Facilitating

E

Ensure and Facilitate production continuity

P

Provide Financial assistance

H

Help in marketing function

A

Assured Storage

N

Neutralize the risk

T

Total distribution solution

E

 Expert advice

Wholesalers advice the manufacturers about customer's tastes and preferences, market conditions, competitive activities and the features preferred by the buyers.

L

Large scale production Facilitating

Wholesalers collect small orders from a number of retailers and pass on the pool of such orders to the manufacturers and make purchases in bulk quantities. This enables the producers to undertake production on a large scale and take advantage of the economies of scale.

E

Ensure and Facilitate production continuity:

The wholesalers facilitate continuity of production activity

throughout the year by purchasing the goods as and when these are produced and storing them till the time these are demanded by retailers or consumers in the market.

P

Provide Financial assistance

The wholesalers provide financial assistance to the manufacturers in the sense that they generally make cash payment for the goods purchased by them. Sometimes they also advance money to the producers for bulk orders placed by them.

H

Help in marketing function:

The wholesalers take care of the distribution of goods to a number of retailers who, in turn, sell these goods to a large number of customers spread over a large geographical area. This relieves the manufacturers from many of the marketing activities and enable them to concentrate on the production activity.

A

Assured Storage:

Wholesalers take delivery of goods when these are produced in factory and keep them in their godowns or warehouses. This reduces the burden of manufacturers of providing for storage facilities for the finished products. They thus provide time utility.

N

Bearing risk:

Wholesalers deal in goods in their own name, take delivery of the goods and keep the goods purchased in large lots in their warehouses. In the process, they bear variety of risks such as the risk of fall in prices, theft, pilferage, spoilage, fire, etc. To that extent, they relieve the manufacturers from bearing these risks.

T

Total distribution solution

Wholesaler Provides complete distribution solution to manufacture.

1

Risk sharing

2

Availability of goods

3

Total Marketing support

4

Specialized knowledge

5

Support  of credit facilities

1

Risk sharing:

The wholesalers purchase in bulk and sell in relatively small quantities to the retailers. Being able to purchase merchandise in smaller quantities, retailers are in a position to avoid the risk of storage, pilferage, obsolescence, reduction in prices and demand fluctuations.

2

Availability of goods:

The wholesalers perform various manufacturing readily available to the retailers. This relieves the retailers of the work of collecting goods from several producers and keeping big inventory of the same.

3

Total Marketing support:

The wholesalers perform various marketing functions and provide support to the retailers. They undertake advertising and other sales promotional activities to induce Customers to purchase the goods. The retailers are benefitted as it helps them in increasing the demand for various new products

4

Specialized knowledge:

The wholesalers pass on the benefit of their specialized knowledge to the retailers. They inform the retailers about the new products, their uses, quality, prices, etc. They may also advise them on the decor of the retail outlet, allocation of shelf space and demonstration of certain products.

5

Support  of credit facilities

The wholesalers generally extend credit facilities to their regular customers. This enables the retailers to manage their business with relatively small amount of working capital.

1

Help in distribution of goods:

2

Help in promotion:

3

Obtaining or Collecting market information

4

Personal selling:

5

Enabling large-scale operations:

1

Help in distribution of goods:

A retailer's most important service to the wholesalers and manufacturers is to provide help in the distribution of their products by making these available to the final consumers, who may be scattered over a large geographic area. They provide place utility.

2

Help in promotion:

From time-to-time, manufacturers and distributors have to carry on various promotional activities in order to increase the sale of their products. For example, they have to advertise their products and offer short-term incentives in the form of coupons, free gifts, sales contests, and so on.  Retailers participate in these activities in various ways and, thereby, help in promoting the sale of the products.

3

Obtaining or Collecting market information

As retailers remain in direct and constant touch with the buyers, they serve as an important source of collecting market information about the tastes, preferences and attitudes of customers.

4

Personal selling:

By undertaking personal selling efforts, the retailers relieve the producers of this activity and greatly help them in the process of actualising the sale of the products.

5

Enabling large-scale operations:

On account of retailer's services, the manufacturers and wholesalers are freed from the trouble of making individual sales to consumers in small quantities. This enables them to operate on, at relatively large scale, and thereby fully concentrate on their other activities.

1 P

Provide credit facilities:

2 A

After-sales services:

3 N

New products information:

4 W

Wide selection:

5 A

Actual Convenience in buying:

6 R

Regular availability of products:

7 I

Innovation suggestion

1 P

Provide credit facilities:

The retailers sometimes provide credit facilities to their regular buyers. This enables the consumers to increase their level of consumption and, thereby, their standard of living.

2 A

After-sales services:

Retailers provide important after-sales services in the form of home delivery, supply of spare parts and attending to customers.

3 N

New products information:

By arranging for effective display of products and through their personal selling efforts, retailers provide important information about the arrival, special features, etc., of new products to the customers.

4 W

Wide selection:

Retailers generally keep stock of a variety of products of different manufacturers. This enables the consumers to make their choice out of a wide selection of goods.

5 A

Actual Convenience in buying:

Retailers generally buy goods in large quantities and sell these in small quantities, according to the requirements of their customers. Also, they are normally situated very near to the residential areas and remain open for long hours. This offers great convenience to the customers in buying products of their requirements.

6 R

Regular availability of products:

The most important service of a retailer to consumers is to maintain regular availability of various products produced by different manufacturers. This enables the buyers to buy products as and when needed.

7 I

Innovation suggestion

1

Cash on delivery (COD)

2

Free on Board or Free on Rail (FoB or FoR)

3

Cost, Insurance and Freight (CFF}

4

Errors and Omissions Excepted(E&OE)

1

Cash on delivery (COD)

It refers to a type of transaction in which payment for goods or services is made at the time of delivery. If the buyer is unable to make payment when the goods or services are delivered then it will be returned to the seller.

2

Free on Board or Free on Rail (FOB or FOR)

It refers to a contract between the seller and the buyer in which all the expenses up to the point of delivery to a carrier (it may be a ship, rail, lorry, etc.) are to be borne by seller.

3

Cost, Insurance and Freight (CIF}

It is the price of goods which includes not only the cost of goods but also the insurance and freight charges payable on goods up to destination port.

4

Errors and Omissions Excepted(E&OE)

It refers to that term which is used in trade documents to say that mistakes and things that have been forgotten should be taken into account.

1

ITINERANT RETAILERS- चलनेवाला

चलनेवाला

भ्रमणकारी

यायावर

रमता

चलता फिरता

दौरा करने वाला

यात्रा करनेवाला

2

FIXED SHOP RETAILERS

1 S

Small traders

2 M

Multiple Consumer products of daily use

3 A

Available at the very doorstep of the customers.

4 L

Limited inventory of merchandise

1 S

Small traders

toiletry products, fruits and vegetables, and so on.

They are small traders operating with limited resources

2 M

Multiple Consumer products of daily use

toiletry products, fruits and vegetables, and so on.

They normally deal in multiple consumer products of daily use such as toiletry products, fruits and vegetables, and so on.

3 A

Available at the very doorstep of the customers.

customer service by making the products available at the very doorstep of the customers

The emphasis of such traders is on providing greater customer service by making the products available at the very doorstep of the customers.

4 L

Limited inventory of merchandise

limited inventory of merchandise either at home or at some other place.

As they do not have any fixed business establishment to operate from, these retailers have to keep their limited inventory of merchandise either at home or at some other place.

1

Peddlers and hawkers

2

Market traders-  Shani bazar  Weekly market

3

Street traders (pavement vendors)

4

Cheap jacks-  Mochi Bag repairs  Consumer item on road side -swimming pool

1

Peddlers and hawkers

A bicycle, a hand cart, a cycle- rickshaw or on their heads, toys, vegetables and fruits, fabrics, carpets, snacks and ice creams, etc.

exhibitions or meals, and outside schools, during a lunch break

Peddlers and hawkers are probably amongst the oldest form of retailers in the market place who have not lost their utility even during the a modern times.

They are small producers or petty traders who carry the products on a bicycle, a hand cart, a cycle- rickshaw or on their heads, and move from place to place to sell their merchandise at the doorstep of the customers.

They generally deal in non-standardized and low-value products such as toys, vegetables and fruits, fabrics, carpets, snacks and ice creams, etc.

They are also found in streets of residential areas, places of exhibitions or meals, and outside schools, during a lunch break.

The main advantage of this form of retailing is the provision of convenient service to the consumers. However, one should be careful in dealing with them, as the products they deal in are not always reliable in terms of quality and price.

2

Market traders

Shani bazar

Weekly market

fabrics or ready-made garments, toys, or crockery, or alternatively, they may be general merchants

fixed days or dates, such as every Saturday or alternate Saturdays, and so on.

Market traders are the small retailers who open their shops at different places on fixed days or dates, such as every Saturday or alternate Saturdays, and so on.

These traders may be dealing in one particular line of merchandise, say fabrics or ready-made garments, toys, or crockery, or alternatively, they may be general merchants.

They are mainly catering to lower-income group of customers and deal in low-priced consumer items of daily use.

3

Street traders (pavement vendors)

near railway stations and bus stands, and sell consumer items of common use, such as stationery items, eatables, readymade garments, newspapers and magazines

Street traders are the small retailers who are commonly found at places where huge floating population gathers, for example, near railway stations and bus stands, and sell consumer items of common use, such as stationery items, eatables, readymade garments, newspapers and magazines. They are different from market traders in the sense that they do not change their place of business so frequently.

4

Cheap jacks

Mochi

Bag repairs

Consumer item on road side -swimming pool

repair of watches, shoes. buckets .

Cheap jacks are petty retailers who have independent shops of a temporary nature in business locality. They keep on changing their business from one locality to another, depending upon the potentiality of the area. However, the change of place is not as frequent as in the case of hawkers or market traders.

They deal in consumer items as well as services Such as repair of watches, shoes. buckets etc.

1 G

Greater resources

2 D

consumer durables as well as non-durables

3 P

Provides Credibility in the minds of customer

1 G

Greater resources

Compared with the itinerant traders, normally they have greater resources and operate on a relatively large scale. However, there are different size groups of fixed shop retailers, varying from very small to very large

2 D

consumer durables as well as non-durables

These retailers may be dealing in different products, including consumer durables as well as non-durables.

3 P

Provides Credibility in the minds of customer

This category of retailers has greater credibility in the minds of customers, and they are in a position to provide greater services to the customers such as home delivery, guarantees, repairs, credit facilities, availability of spares, etc.

1

Small Scale Fixed Shop Retailers

2

Large Scale Retailers

1 G

General stores

2 S

Specialty shops-  shops selling children's garments, men's wear, ladies shoes, toys and gifts, school uniforms, college books or consumer electronic goods, etc.

3 S

Street stall holders

4 S

Second-hand goods shops

1 G

General stores

General stores are most commonly found in a local market and residential areas. These shops carry stock of a variety of products required to satisfy the day-to-day needs of the consumers residing in nearby localities.

Such stores remain open for long hours at convenient timings and often provide credit facilities to some of their regular customers.

The biggest advantage of such stores is in terms of convenience to the customers in buying  products of daily use such as grocery items, soft drinks, toiletry products, stationery and confectionery.

As most of their customers are residents of the same locality, an important factor contributing to their success is the image of the owner and the rapport he has established with them.

2 S

Specialty shops

This type of retail store is becoming very popular, particularly in urban areas

Instead of selling a variety of products of different types, these retail stores specialize in the sale of a specific line of products. For example, shops selling children's garments, men's wear, ladies shoes, toys and gifts, school uniforms, college books or consumer electronic goods, etc.

The speciality shops are generally located in a central place where a large number of customers can be attracted.

They provide a wide choice to the customers in the selection of goods.

3 S

Street stall holders

These small vendors are commonly found at street crossings or other places where flow of traffic is heavy. They attract floating customers and deal mainly in goods of cheap variety like hosiery products, toys, cigarettes, soft drinks, etc.

They get their supplies from local suppliers as well as wholesalers.

The total area covered by a stall is very limited and, therefore, they handle goods on a very small Scale.

Their main advantage is in providing convenient service to the customers in buying some of the items of their needs.

4 S

Second-hand goods shops

These shops deal in second-hand or used goods, like books, clothes, automobiles, furniture and other household goods. The goods are sold at lower prices.

Generally persons with modest means purchase goods from such shops.

Such shops may also stock rare objects of historical value and antique items which are sold at rather heavy prices to people who have special interest in such antique goods.

The shops, selling second-hand goods may be located at street crossings or in busy streets in the form of a stall having very little structure-a table or a temporary platform to display the books or may have reasonably good infrastructure, as in the case of those selling furniture or used cars or scooters or motorcycles.

1

Departmental stores- 'Akberally' in Mumbai and  'Spencers' in Chennai

2

Multiple shops or Chain stores- Bata Shoe stores are typical examples of Such shops,Raymonds ,

1 R

retailing as well as warehousing

2 A

All facilities

3 C

central place

4 C

centralized purchasing arrangements.

5 E

Ensure management by BOD

1 R

retailing as well as warehousing

A departmental store combines both the functions of retailing as well as warehousing. They purchase directly from manufacturers and operate separate warehouses. That way they help in eliminating undesirable middlemen between the producers and the customers.

2 A

All facilities

A modern departmental store may provide all facilities such as restaurant, travel ana information bureau, telephone booth, restrooms, etc. As such they try to provide maximum service to higher class of customers for whom price is of secondary importance.

3 C

central place

These stores are generally located at a central place in the heart of a city, which caters to a large number of customers.

4 C

centralized purchasing arrangements.

They have centralised purchasing arrangements. All the purchases in a department store are made centrally by the purchase department of the store, whereas sales are decentralised in different departments.

5 E

Ensure management by BOD

As the size of these stores is very large, they are generally formed as a joint stock company managed by a board of directors. There is a managing director assisted by a general manager and several department managers.

1

Big Bazaar of future group

Of future group – Kishore Biyani

2

24 X7

Godrefre Philips inida – modi group

3

D MART

Radha Krishnan Damani

4

More

Aditya Birla , now taken over by Amazon

5

Reliance Fresh

Mukesh Amabani

1 C

Centralized at the head office