COMMERCE O LEVEL(FORM THREE) NOTES – MARKETING

MARKETING

1. A way for these parties to communicate, that is, the buyer will not buy unless he knows the existence of a product and seller will not sell unless he knows the market.
2. Desire and ability to satisfy these wants and needs.
3. Something of value to contribute in the exchange.

1. To increase sales volume through aggressive selling techniques.
2. To achieve profit.
3. To face competition.
4. To give quality assurance to customers

1. Primary marketing
2. Secondary marketing
3. Service marketing

1. PRIMARY MARKETING

1. Marketing enables the consumers to know the sources of supply for what they demand.
2. Marketing improves the standard of living of the people by availing the goods needed by the consumers in the market.
3. Through marketing, consumers are able to determine the price of goods, hence there may be no exploitation.
4. Marketing enhances the variety of choice due to wide range of goods supplied in the market. The consumer is provided with a wide range of goods where they can choose from

1. Marketing enables producers to know the demand of their consumers. The quality and quantity of the goods consumers need will also be considered.
2. It enables producers to know their competitors as result, producers are in position to improve their goods to fit the competition market.
3. Marketing enables the producers to fix the price at which they will sell their products.
4. Marketing increases the sales volume.
5. Marketing enables the producers to know the best means of communication with their consumers in order to complete a transaction.

1. It is an area or place where buyers and sellers meet to transact. This means buyers and sellers meet to exchange goods and services. A market is always designated place authorized by the government through local authorities.
2. It is a situation in which buyers and sellers transact or exchange goods and services for example people buy goods through internet, one can purchase a car from Japan, pay by cheque and the selling company ships the car where the buyer will get it at the port.

1. Commodity market
2. Factor market (input)
3. Financial market

1. Perfect competition
2. Monopoly
3. Monopolistic competition
4. Oligopoly
5. Duopoly

1. High initial costs of investment

1. Large number of sellers and buyers.

2. No barrier to entry into the industry or exit. Firms are free to enter or leave any time they wish

3. Differentiation product

4. Knowledge of the market

5. The firms are the price determinants.

1. Few sellers

2. Price is determined by the firm

1. Wholesalers and retailers prefer branded goods as the branded goods can easily be sold.
2. It enables the manufacturers to control price of the product because of branded goods, retail selling price is fixed by the manufacturer.
3. It is possible for a manufacturer to eliminate a wholesale and sell the products directly to the retailers or customers in order to increase profit and sales volume.
4. The individuality of the product is established. This helps a manufacturer to differentiate his or her products from those of his or her competitors.
5. Advertising costs may be reduced. Once a brand such as Coca Cola has been made popular, retailers are forced to keep the product in their stock because of their popularity.

1. Consumers cannot be charged higher prices by the retailers as price of branded goods are well advertised and known in the market.
2. Branded goods are easily available. This consumer can get such goods easily at the point of their choice.
3. Quality of branded goods is protected. Branded goods are usually sold in sealed packages. Thus branded goods are protected from dust and water hence are more secured.
4. Manufacturers and producers do not easily change the price of branded goods as opposed to the price of non branded goods.

1. Size and weight of goods

2. Shape

3. Nature of the goods to be packed

4. Promotional policies and strategies. An attractive package has an impact to consumers in buying decision.
5. Cost

1. To protect goods from damage.
2. To facilitate branding and labeling.
3. To make the handling of goods convenient.
4. To make the product look attractive.
5. To protect the quality of goods against atmospheric conditions such as bad weather condition.
6. To prevent loss by evaporation in the case of products like petroleum and gas.

1. A package can be used for other purposes when the product in it has been consumed. Plastic bottles for instance are used for storage of water.
2. Packaging and packing facilitates branding and advertising. Most of the branded goods are packed and making easy to advertise them.
3. Package ensures hygiene for food products stored with other goods.
4. Packed goods are convenient to handle
5. Goods are protected from damage when being transported from the area of production to the area of consumption.

1. It increases the cost of production to the manufacturers.
2. Packed goods are more expensive than unpacked goods as the cost of packaging and packing is usually passed on to the consumers in terms of increased price.
3. Consumers are denied the right of inspecting the quality and quantity of packed goods.
4. In the process of opening or unwrapping consumers may not open the package properly thereby damaging a product thus a loss to a consumer.

1. Reduces the cost of advertising and marketing.

2. Wider market

3. Selection by customers

4. Helps in future grading

5. Simple and cheaper financing

1. To find out if there is a market for the goods to be produced.
2. To establish the suitable method and channel of distribution for the product.
3. To determine the most attractive form of presenting the product to the consumers (packaging ).
4. To assist one in knowing the most suitable effective, cheap and convenient method of promoting the product.
5. If done before production, it will determine the best price of the product for the advantage of the consumer.

1. Field investigations

2. Statistical data collection

3. Testing the market

4. Feedback from distributors

1. Definition of the problem

2. Source of secondary data

3. Source of Primary data

1. Market research enables producers to find new markets for their products.
2. Market research contributes a lot in reduction of prices due to cheaper but appealing method of packing.
3. Market research helps to improve the quality of the products.
4. Active market research eliminates wasteful advertising campaigns and improves on the useful ones.

1. Some researchers may not show the expected results if the research methods used were inappropriate.
2. Market research is expensive to undertake.
3. Information collected from interviews and questionnaires depends on the moods, honesty and reliability of the respondent.
4. A selected population sample may be too small to adequately represent the entire population. This may result to get biased information.

MONEY AND BANKING

• Barter trade
• Commodity money
• Cowries
• Precious metal
• Coins and Notes

1. Lack of Double coincidence of wants

2. Lack of measure of value.

5. Difficult of transporting some commodities

1. Barter trade may not involves many documents
2. It removes the problems of currency differences
3. One can easily know the extact quality of others goods he is like to get from their goods exchanged.
4. Barter trade promotes social understanding among the part involved
5. Barter trade eliminates the risk involved in carrying money
6. The system is quite simple and fast avoiding unnecessary delay
7. Even illiterates can carry out exchange since no documentation required
8. Cheating is not possible because both parties physically see and involved in the exchange.

1. Medium of exchange:

• Should be generally acceptable
• Should be easily and tight to carry
• Money should be durables
• Should be homogeneous
• Should not be easy to forge or counterfeit
• Good money should be scarce
• Should be stable in value
• Should have standard units (divisible)
• Should be cheap and convenient to print
• Should be easy to recognize whether it is real money or forged

• Credit worthiness of a person
• Objective for the loan
• Period for which the loan is to be used
• Whether a borrower is a bank customer or not
• The economic integrity of the applicant
• The value of the security presented
• The amount of money required by the borrower
• The government policy on lending

• SHORT-TERM LOAN
• MEDIUM-TERM LOAN
• LONG-TERM LOAN

• Some shops and hotels may be willing to accept person cheques
• They are available in various currencies
• They are safer to carry than cash.
• They are easy to carry compared to hard cash.
• Travelers cheques may be given in different denominations

1. GENERAL CROSSING CHEQUE
2. SPECIAL CROSSING CHEQUE

1. The words “and company” or any abbreviation between two parallel lines
2. Two parallel lines with or without words “not negotiable”. This indicates that should a person receive a cheque from another, he has the same right as the one who gave it to him and should have a right as the one who gave it to him in case it is lost no one else can get money on it.
3. Two parallel lines with words “Account payee only” between them. Here money must be paid in the account of the named person and not across the counter or to someone else.

1. Stale cheques: This is a cheque which has stayed for over six months from the day it was written. This cheque cannot be honored by the bank.
2. Post dated cheques: This is the one presented to the bank before the date on it. This cannot also be honored by the bank.
3. Stopped cheques: The drawer instructs the bank not to pay E.g. if it is stolen or lost
4. Blank cheques: This is a cheque which has been completed accept for the amount in words and figures. Blank cheques are risky in that one may fill in any figure and gets money from ones account, unless they are crossed.
5. Forged cheques: This is used by an importer or thief to get money from another person’s account. It is advisable that the account holders keep his cheque book safely so that no one else can use it
6. Lost cheque: One may lose a cheque as he goes to the bank to cash or deposit it in this cases he should report the matter to his bank immediately before one draw it however crossing cheque make it safe, even if one who loose it the founder cannot get money on it.

• Convenience: It is very convenient in writing a cheque is less time than counting large sums of bank notes and coins.
• Safety: It is safe that it cannot easily be stolen like cash.
• Proof of payment: It can act as proof of payment because once a cheque has been affected by a bank it acts as evidence that money has been paid on it.
• Easy to carry: It is easier to carry than physical cash. A cheque can be carry large sums of money easily compared to bulky bank notes.
• Storage: It is easy to store, since it does not occupy a large space.
• Easy to transfer: Economics (large) amounts can easily and safely be transferred by cheque.
• Reference: The counter foil in the cheque book act as a record to the drawer.
• Easy to pay many people: With a single cheque an employer can pay many people with it.
• Easy to send: A cheque can easily be sent through post compared to physical money.
• It is secure: A cheque can be person based by crossing it.

• When there are no sufficient funds in the drawer account.
• When the drawer is bankrupt.
• When the drawer is dead.
• The cheque is presented before the date on it.
• When the cheque has an error for instances if the figures differ from words in the cheque.
• When the cheque is stale
• If the signature of the drawer is different from his specimen signature on his account.

• Crossing the cheques is the best way of making cheques safe because the bank cannot easily cash them across the counter.
• Do not leave unnecessary gaps between the words and figures when filling a cheque.
• Avoid signing blank cheques: this will make imposters fill in the necessary amounts and with draw the money.
• Do not expose your signature as people make forge it and withdraw money from the account
• Always report loss of cheques or cheque book to the bank and police.
• Always keep the cheque book under key and lock and the keys kept away from exposure.

• Lack of information: The majorities of the people in Tanzania lives in rural areas and are peasants. Very little effort has been taken to educate these people about banking so they are ignorant about cheque, hence they will be reluctant to accept cheque payments.
• Bank are limited: The spread of banks in the country is limited to major business centers, so they are many areas in the country not benefiting from banking services, These will be reluctant to accept cheques.
• Loss of Trust: Many people have lost trust in banking. This is because of the closure of many banks due to efficiency. People are reluctant to accept cheque especially the post dated ones in fear that the bank may close before cashing it.
• Lack of Account: Some people do not have bank accounts yet the present bank policy restricts insuring of open cheques. All cheque must be deposited on bank accounts for clearing. Therefore people without bank accounts will not accept cheque payments.
• The amount involved: The majority of the people in Tanzania are small income earners and
  hence buy in small quantities example it will be inconveniencing to buy a loaf of bread at 700/= using a cheque so in case of small payments people will reluctant to accept cheques.
• Time consuming: People who need immediate funds to carry out certain activities may be reluctant to accept cheques. This is because a cheque takes several days before it is cleared by the bank.

1. Lends money to members
2. Keeps money for members
3. Assists farmers with same farming advise
4. Assists members with transport facilities

1. Stores money and jewels for customers
2. Transfer money for customers by means of cheques, bank drafts, standing orders, and credit transfer and travelers cheques.
3. Advises the customer on business and investment matters
4. Commercial bank buys and sells stocks and shares for customers.
5. It acts as a trustee to some of its customers
6. Collect money for its customers
7. It provides financial advice to customers
8. It lends money to the public in form of bank loans or bank overdraft.
9. It issues booklets and pamphlets to its customers regarding banking practices.
10. Assists customers in international trade especially by selling traveler’s cheque and assuring bank drafts.
11. Provides right safe services to its customers.
12. It is a source of foreign currency of various countries it exchanges foreign currency with local through foreign exchange bureaus

• Current Account
• Saving Account
• Fixed Deposit Account

• A minimum initial balance is required at the amount at the time of opening a current account.
• The withdraw are only limited by the amount on the account. One can withdraw all his money from his account.
• An account holder can deposit any amount at anytime in any form like cash, cheques, drafts, Postal orders and many others.
• A cheque book is provided to a current account holders.
• Bank statements are issued to customers on a monthly basis.
• No interest is given to current account holders (unless negotiated with the bank).
• Sometimes banks allow overdraft facilities to their customers.

• Name, address and occupation if any
• Two referees, who should be bank employers or bank existing customers who must give information regarding. Your financial position and your credit worthiness.
• A signature card is issued where a specimen signature is displayed.
• The applicant then issued with an account number.
• Then he is issued with a cheque book ready to begin transacting with the account.

• A minimum initial deposit as required when opening up the account.
• A minimum balance is required at the time in the account
• Money can be deposited at any time in case of a post office, savings bank money can be deposited from any post office
• Withdraws are allowed once a week
• Notice of seven (7) days must be given to the bank before higher withdraws are made.
• A pass book is provided but not a cheque book which the holder must present to the book when withdrawing or depositing the money.
• Interest is offered on deposit is held on a saving account
• A person holding the account cannot send someone to withdraw money on his behalf; he must be there .
• In case of post office savings account one can draw from any post office within the country of issue.

• It is opened with not less than a certain minimum amount
• A fixed rate of interest is paid on these account
• They are very good for those who have large sums of money which they do not intend to use in the near future.
• Notice must be given before withdraws takes place.

1. LOSS OF CONFIDENCE: Many people have lost confidence in banking due to continuing closing.
2. LACK OF INFORMATION: Many people especially in rural areas are ignorant of the importance of banking.
3. POVERTY: The majority of Tanzania is peasant and poor who may not have any surplus money for saving after spending on basic needs.
4. LACK OF COMMITMENT: Lack of committed qualified staff has led to closing of many banks in the country.
5. MORAL DECAY: Moral decay among the bank staff has forced some to collaborate with the public to forge and withdraw money and this has led to heavy losses to these banks.
6. RELUCTANCY TO PAY BACK LOANS: Many borrowers from banks are untrustworthy and do not pay their loans making the banks to sell on their securities (property) This makes people lose confidence in the bank.
7. POLITICAL INSTABILITY: Political instability has discouraged investors towards banking business, especially in those areas experiencing political instabilities e.g Wars
8. INFLATION: Inflation in the country has discouraged many people from saving.
9. HIGH INTEREST RATES: Businessmen are sometimes discouraged to take bank loans due to the high interest rates yet lending is the source of income to commercial banks.
10. LACK OF MODERN EQUIPMENT: Some banks lack modern equipment of count and enter the figures which contribute to congestion in these banks.
11. FORGERY: Modern technology in the country has encouraged some people to forge money which may lead to heavy losses to the unfortunate banks, which may receive such money as deposits.
12. CONCENTRATE IN URBAN CENTER: Bank concentrate in urban areas neglecting rural areas, hence limiting the scope of banking.

1. Currency notes
2. Coins
3. Cheque

1. He can keep it with the maturity date when he can present it to the drawer in order to get money.
2. He can transfer the right to receive money to someone else the act is called endorsement which means singing back of that bill so that money should be paid to someone else.

• Bills of exchange
• Cheque
• Promising notes
• Travelers cheque
• Bank draft