Introduction And Types Of Commerce Production To Note In Our Current Word
All countries must obtain essential items such as food, shelter and clothing. The undeveloped countries have to devote much of the time producing these items. More advanced countries obtain a wider range of goods and services and so enjoy a higher standard of living.
The commercial services are a vital element in the business world. Firms producing goods or services rely on them to ensure that they function efficiently and that their output is made available to their customers. As a country s economy continues to expand and become more complex, the need for commercial services grows and the number of people employed providing them increases.
The commercial services are classified in the business world as a tertiary activity. The three categories of the business world (types of production) are listed below with examples of specialization and business organization.
TYPES OF PRODUCTION
1. Primary production: This is the production of raw materials and basic foodstuffs. Nigeria is an important primary produce with large-scale agricultural and forestry activities; some mining, quarrying and fishing and of most importance oil extraction.
2. Secondary industry: Here the products of primary industry are utilized to make goods such as machinery and factory buildings for other producers, and goods such as cars, radios and shoes for the consuming public.
3. Tertiary activity: This is the part of the economy which reduces services:
(a) Direct Services: These are provided for direct consumption by the public. As a country becomes more prosperous more of these services are available. For example, the government can provide more health and education services and a growing number of private firms supply the services of restaurants, hotels and entertainment.
(b) Commercial services: All of these services are designed to assist other businesses. Additionally some provide important services for members of the public. Briefly they are;
Banking – important for making loans to businesses in order to buy factories, machinery and stocks of materials and to private customers enabling them to purchase expensive products. Banks also provide a wide range of other services.
Insurance – helps to reduce the risks that businessmen face. In return for regular payments to insurance companies they are compensated for losses following fire, theft or accident.
Advertising – ensures that a firms likely customers are made aware of its products. This activity can be informative and persuasive.
Wholesaling – is the activity of the ‘middle man’ operating between the primary or secondary producers and their final customers, generally by purchasing goods in bulk and then distributing them to retailers.
Retailing – acts as the outlet to the public for the goods that industry produces.
Transport – The various means of moving the output of firms to their customers.
Importing and Exporting – Nigeria engages in international trade, selling foodstuffs such as cocoa, and raw materials such as oil and hardwoods, and buying manufactured goods from abroad This trade is essential for the further development and prosperity of the country; an important aspect of the commercial services is arranging for such trade to take place.
Without the commercial services none of the other categories of production would be able to function efficiently. Other businesses rely on them. Additionally they provide important services (including for example, banking, insurance, transport) for members of the public.