Category: Commerce Notes PPT

Features of Marketing

After knowing about what is marketing concept, you should also have an idea about the features of marketing that are as follows – 

• Satisfying the needs and wants of customers 

• Creating a product or offering 

• Value to customer

• Exchange of goods and services

Think and Answer: Can e-commerce sites be considered a marketplace? Give reasons to support your answers.

After reading about what is market and marketing, let us now see what can be marketed. Any product that marketers can sell and has the potential to meet the needs and wants of buyers can be marketed. It can be anything from a physical product such as mobile phones and TVs to a service like banking, dining, etc. However, a product must offer some benefits to the buyer. These benefits can be –

• Functional benefit

• Psychological benefit

• Social benefits

Fun Activity: Make a list of as many products that you use in your daily life.

What is the Marketing Process?

Marketing process comprises a series of steps that are undertaken to deliver the finished goods and services to consumers. These steps include – 

The first step in the marketing process involves identifying the needs and wants of prospective and existing customers. Consequently, businesses carry out market research to collect data regarding what their customers want.

The information collected through market research is used to plan and strategies for attaining marketing objectives such as boosting sales, using promotional tools, lowering productivity etc.

For instance, after conducting market research, a certain clothes retail store found out that people prefer pastel coloured clothes more. Accordingly, they decided to offer more pastel coloured apparel in their showrooms to meet customer demand.

The next step after planning is to start manufacturing products as per the decisions reached during market planning. 

During manufacturing, organisations also focus on maintaining quality standards for all products so that consumers can be sure about the quality and packaging. For products like rice, grains, wheat, their quality is judged by the grading system.

In this step, finished products are packaged and labelled. It is an integral part of marketing since appealing packaging manages to attract a higher number of customers.

A product is then given a brand name that facilitates in differentiating a particular manufacturer’s product from its competitors in a market. It is also an assurance of quality and service from the manufacturer to consumers.

Apart from providing quality services, providing satisfaction to customers should also be a priority for companies. Accordingly, they need to set up a reliable customer service that is available 24×7 to handle queries and complaints from customers and offer quick services.

It is one of the most critical steps in the marketing process. It is because customers look for affordable products that will add value to their life. On the other hand, a business also needs to earn profits. Therefore, a company should be meticulous while fixing the price of the product and keep in mind factors like competitors’ prices, demand for their product etc.

Goods are not consumed immediately after their manufacturing is completed. Therefore, to keep them safe, goods are stored in warehouses from where they are transported to wholesalers or retailers in different parts of the country or city.

Manufacturers make use of various promotional tools like advertising to communicate to customers about their products and create a demand for them. In other words, it is the answer to “what is product marketing”.

It is the final stage in the marketing process where goods are distributed to different parts of the country for consumption.

What is Marketing Management?

After reading about the marketing process, you must be wondering about what is meant by marketing management. The term marketing management includes planning, organising, implementing, coordinating and controlling all market-related activities for an efficient exchange of goods or services. 

Additionally, marketing management helps businesses and manufacturers to adopt a suitable marketing strategy to meet and manage the demands of their target customers effectively. Marketing strategy is a set of plans that enable an organisation to reach its objectives.

Let us examine what are the different marketing strategies that are employed by businesses.

Besides, marketing strategies, one should also know what is marketing analytics. Marketing analytics refers to the process of analysing the effectiveness of an organisation’s marketing strategies and aids in streamlining it to ensure high returns on investment.

What Are The 7p’s of Marketing? 

• Price

• Product

• Promotion

• Place

• Packaging

• Position 

• Place

To know more on this topic, avail the study materials by on this topic which can be accessed from the website.

Terminologies like ADR and GDR are concepts used in terms of economics to understand the capital market. For students, this concept forms a part of their syllabus in class 11th Business studies in the commerce stream. However, students often miss out on understanding these terms and find the subject to be difficult. Whereas, in reality, these are very simple concepts if taught and learned properly. 

The students need not worry anymore as a team of experts at has analyzed the challenges faced by the students and has scientifically prepared notes on various similar terms making it simpler for the students to understand. 

Download the free PDF notes from the study materials available on the Website of or students can also access the study materials from ‘s mobile app. 

In this Article, Students will be Able to Learn the Following Concepts Related to ADR and GDR- 

• What is an ADR?

• What is a GDR?

• What is the significant difference between ADR and GDR?

• Key takeaways from the chapter

• Frequently asked questions 

What is an ADR?

An American depositary receipt abbreviated as ADR is a type of negotiable certificate that is issued by a U.S. depositary bank that represents a specified number of shares, generally a single share- which is of a foreign company’s stock. The ADR trades on the U.S. stock markets as any domestic shares would trade. 

What is a GDR?

A global depository receipt which is abbreviated as GDR is quite similar to the American Depository Receipt. This is a type of bank certificate which represents the share in a foreign company. This is a foreign bank that holds the shares internationally. The shares are traded as domestic shares among them, but, globally, various bank branches offer the shares for sale.

What is the Difference Between ADR and GDR:

Key Takeaways from the Chapter – 

• ADR is issued by a US bank making it easy for the US investors to invest in foreign companies.

• GDR is issued by a depository bank located outside the domestic boundaries of the company

• The difference between ADR and GDR is on the basis of – 

1. Meaning

2. Currency 

3. Purpose

4. Issues by 

5. Stock exchanges they are listed on  

6. Market

Goods are sold in lieu of cash or credit. The seller immediately gets the payment for the goods sold for cash; however, when it’s a credit transaction, the buyer intends to make payment within the agreed credit period. This promise of paying in the future by the purchaser can be noted in the written promise; in the sense that it can either be the promissory note or Bill of Exchange. 

Definition of the Bills of Exchange

As per the Negotiable Instrument Act, 1881, the bill of exchange is the written instrument that holds the unconditional order which is signed by the drawer that directs a specific person for paying the certain amount only to, or to the order of, the bearer of the instrument or a definite person. 

Conditions when Drawer is the Payee

Here the drawer is the payee himself and if he keeps the bill with himself until the date of the payment.

Conditions when Drawer is not the Payee

The drawer is not the payee if he gets the discounted bill or if the bill gets endorsed in favour of the creditor.

The Bills of Exchange Features

• The bill of exchange should be in writing, and it cannot be verbal. 

• It is made and signed by the drawer.

• It is the unconditional order to the person for whom credit has been granted.

• The drawee or person is payable to the person whose name gets mentioned in the bill.

• The bill also has a mention of the date by which the specified amount needs to be paid by the drawee.

• The bill should be accepted by the drawee for making it legal. 

The Types of Bills of Exchange

The types of bills of exchange are the trade bill and accommodation bill. 

Trade Bill: The trade bill is the bill of exchange that is drawn and accepted for settling the trade transaction. It is known as the trade bill. This bill of exchange is essentially drawn by the seller of goods, and it is accepted by the purchaser. 

Accommodation Bill: In this category, the bill of change is made and accepted for mutual help, and it is known as the accommodation bill. This bill is used for mutual benefit without the trade transaction. It doesn’t involve the purchase or sale of any specific goods or services. This type of bill has an agreement between the parties for giving financial assistance to others. 

Economic growth can be defined as an increase in the potential output level in an economy over a certain time period. It can be represented by a rightward shift that is seen in the production possibility frontier. Economic growth also causes a shift in the Long Run Aggregate Supply curve.

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In some cases, economic growth can also be determined by a change in the GDP or the Gross Domestic Product of a country. Economic growth changes with the real income of a nation and it can be defined as the income that is adjusted properly for inflation in a country. 

Economy and the Business Cycle 

The major fluctuations in the economy can be called the business cycle that results in the change. There are 4 stages in the business cycle known as the boom, recession, slump, and recovery. In the case of a boom, the aggregate demand will increase, and hence there will be an increase in the output that will ultimately result in economic growth. In this article, students will learn how to deal with slow economic growth and the impact of economic growth on business. 

Types of Growth in Economy

Generally, there are 3 different types of growth that take place in an economy. There is the trend growth, potential growth, and actual growth. Actual growth is the change in GDP that happens over a certain period of time. Actual growth is potentially affected by a change that takes place in the efficiency of resources as well as the aggregate demand in the economy. 

Potential growth can be defined as the rise in the quality and quantity of all the resources that are present in the economy. Potential growth could take place without having actual economic growth. Trend growth can be defined as the increase that is expected to happen in the potential output over a certain period of time. It can basically be used to determine the growing capacity of the economy without the consideration of inflation. 

What are the Economic Growth Determinants?

There are some economic growth determinants that decide how economic growth experiences change in a nation. 

Technological Progress

There are a few factors that decide the economic growth of a nation. Technological progress is one of them. When it comes to the productivity of technology, it can have an impact on the potential output of the nation. With proper supply in the economy, consumers are able to spend more money. Technological progress also increases the efficiency of production due to the fact that production cost is reduced. Hence, it would cause economic growth. 

Capital Investments

Economic growth can also be determined with the help of capital investments. With a significant amount of proper capital investments in machinery, factories, and equipment, the economy of a nation can be developed. When a business firm decides to make some investment in new machinery, the potential output will experience an increase. This will lead to stable economic growth. 

Quantity & Quality of Labour

Another important factor that plays an essential role in the growth of the economy is the quality and quantity of labour. With the increased amount of labour, there will be more economic growth. With more workers, the potential level of output will also experience an increase as well. Besides the quantity of labour, the abilities and skills are also pretty important. 

Confidences and Expectations

According to the economic growth indicators and definitions, one of the main causes that lead to economic growth is the confidence of people as well as the expectations of the economy. Firms will eventually increase their investments if they are confident about the return rates on the investments. With more planned investments, the economy will also experience growth. This is due to the fact that the addition of some capital stock in the economy of a country will be used to produce better services and goods. If the consumers tend to have more confidence regarding the future, they will also increase the rates of consumption and hence spend more on the economy. 

Natural Resources

Another one of the causes for economic growth is the natural resources that a nation has. Resources play a pretty important role because the nations that have more natural resources will be able to produce services and goods. These goods and services will also have low prices and costs attached to them when compared to the countries that have to import these resources. With low costs, the companies and firms will be able to increase the output and hence export more goods to other nations. This will lead to an increase in the current account of the country and hence will quicken up the slow economic growth. 

Impact of Economic Growth on Business 

When it comes to the impact of economic growth on businesses these days, there are a lot of factors to be taken into consideration. Economic growth can provide greater potential for:

• An increase in the profits.

• A significant rise in the living standards on an average level.

• Creation of new employment opportunities for the people in the country.

• An increase in the tax revenues for the government can be used for funding more government services. 

• Improved confidence in business. 

• Increase in capital investment. 

• Technological innovations. 

Conclusion 

This article above provides details on the economic growth of a country. Students will be able to use this article to gain more information regarding the topic. 

What is a Control System?

A control system is the one which manages, commands also directs, or regulates the behaviour of other departments or systems in a company.

 

For continuously devised control systems, a feedback control system is used to automatically control all the processes in an organization.

 

Control System in an organization is very essential, before hitting to the main elements to be present in a good controlling system, first let us know what actually this control system in an organization means? Popularly known as MCS.

 

Management Control System (MCS)

This is a system which gathers and also uses the gathered information to evaluate the performance of different resources of the organization like human resources, physical and financial resources and also the organization as a whole in light of the laid strategies which are attempted to be achieved by the company. Management control systems influence the behaviour of the organizational resources to implement the set organizational strategies. Management control systems might be formal or even informal. 

 

Management control systems are tools to assist the management for an organization piloting toward its strategic objectives and it’s competitive advantage. Management controls are the only tool which managers use in implementing the desired strategies. However, the strategies get implemented with the help of management controls, organizational structure, human resources management and culture. 

 

According to Simons, Management Control Systems are the formal system, information-based routine work and procedures which managers use to maintain or to alter the patterns in an organizational activity. Anthony & Young showed that management control system in an image of a ‘black box’. Black box is used to describe an operation whose exact nature cannot be observed by a layman.

 

Elements of a Good Control System Overview

In every organization it is mandatory to have a good control system. An assured control system only comes with good elements present in it, the selective elements are as follows –

 

1. Planning  

Planning and control are closely connected to each other. Planning without controlling is meaningless and controlling without planning is acting blindly. Planning provides the base for control. Control brings focus to all bottlenecks related to work performance and this operates as a straight pin to the requirement of the situation. It is thus related to the planning function of the manager. Control is the result of all set plans, goals or policies. Thus, we see planning offers and affect control. Properly devised plans become important elements in bringing strong control.

 

2. Action  

Control suggests what actions can be taken to correct the deviation that might occur between the standards and the actual results. Definitely, it should assume the role of an emergency handler who comes into action right when it is the urgency. But deviations do occur in spite of the best guiding from the manager. In such a situation, the manager should be vigilant in his act. He should be quick not only in identifying the deviations, but also in rectifying them with the correct ones. Thus, control means the required and quick action to correct differences or actions which at least try to prevent such variations in future.

 

3. Delegation of Authority 

Delegation of authority only means to grant the authority or power to the subordinates to operate within the prescribed limits. Control means the authority to get the performance and detect it’s deviations and then to take the necessary corrective action. A manager cannot exercise control without the adequate authority. He also has a need to control the operations which are exercised by taking action which may be taken within the limits of his authority. The best policy of delegation is the matching of equitable responsibility and authority. It also suggests that a manager must have corresponding authority as compared to his own responsibility.

4. Information 

For an effective control system, there must be a prompt flow of information to the manager. Managers in the organisation must have adequate information about the performance, standards, and resources being contributed to the achievement of the organizational objectives. The system of communicating back to the manager is called a “feedback” system. An effective feedback system helps the manager to know where and when the deviation from any plan took place. This can then initiate a prompt corrective action. Promptness in reporting and information is vital for quick remedial action.

 

Thus, we see there are these elements which form an effective control system. Every organization must make sure about this system of control in order to control all the resources in the department.

We have often heard about the term ‘shares’ in the financial sector. The definition of the term share lies in the word itself. But we may not know about the term in detail. A share, in the finance market, means a unit used as limited partnerships, mutual funds, and real estate investment trusts. A person who holds the share(s) in a particular company is known as the shareholder of the organisation. In a further technical term, a share is a unit of capital that cannot be divided and it expresses the ownership relationship between the shareholder and the corporation. Everything about shares is not an easy task to understand. For this purpose, we have to understand the basics of the equity shares and preference shares only, in detail. 

Equity Shares

The other name of ‘equity share’ is ‘ordinary share’. It is a subset under the fractional ownership or part ownership in which the shareholder tackles the maximum business risk as a fractional owner. Generally, the members of the company with voting rights are the holders of Equity Shares. Long-term capital is raised with the aid of Equity shares. Equity shareholders are called ‘residual owners’. They are paid the residual amount after the settlement of claims on the company’s income and assets. These shareholders can take part in the management of the company through their voting rights.

Advantages of Equity Share

1. Equity capital is the building block of a company. It is the last thing added in the list of claims and it produces a cushion for creditors.

2. Equity capital generates creditworthiness to the company and boosts up the confidence of various loan producers.

3. Equity shares are preferred by investors who are willing to take larger risks. 

4. It is not compulsory to pay the dividend to the equity shareholders. So, the company will not face any burden for this. 

5. The funds are raised by equity issues without generating any charge on the assets of the company.

6. The management of the company may be controlled by the equity shareholders by their voting rights.

Disadvantages of Equity Shares

1. Risk-averse investors with the preference of fixed income will not like equity shares.

2. The cost of raising funds from other sources is lower than the cost of equity shares. 

3. The voting rights and earnings of existing equity shareholders are dismissed by the issue of the additional equity shares.

4. Equity share is a time-consuming process as it involves various formalities and administrative delays.

Preference Shares

Preference Shares are the shares which guarantee the holder a fixed and steady dividend, whose payment takes priority over the equity share dividends. Capital raised by the issue of preference shares is termed as preference share capital.The basic difference between preference shareholder and equity shareholder is that preference shareholders are in a better position over the equity shareholders. Preference shareholders receive a fixed and steady dividend from the revenue of the company before an equity shareholder gets any dividend. 

Types of Preference Share

There are three types of preference shareholders namely Cumulative and Non-Cumulative, Participating and Non-participating and Convertible and Non-Convertible. 

a) Cumulative and Non-Cumulative

Cumulative preference shares are known as the preference shares that have the power to collect dividends which are not paid in the future years, in case the same is not paid during a year. If the dividend is not accumulated over the unpaid dividends in a particular year it is called Non-cumulative shares. 

b) Participating and Non-Participating

Preference shares which have the power to take part in the extra surplus of company shares which, after dividend, is paid at a fixed rate on equity shares are called participating preference shares. In the case of non-participating preference shares, the above power is not exercised. 

c) Convertible and Non-Convertible

If the preference share is converted into equity shares for a certain period of time, it is called convertible preference share. The rest is called non-convertible preference shares.

Advantages of Preference Share

1. It does not influence the control of equity shareholders over the management.

2. There may be a hike in dividend for the equity shareholders in the good time.

3. The income of the shareholders is steady and fixed.

4. They have a preferential power of repayment over the equity shareholders.

5. Any sort of charge against the assets of a company is not created by the preference capital.

Disadvantages of Preference Share

• The amount dividend is higher than the rate of interest on debentures.  

• The dividend on these shares is regulated by the revenue of the company.

• Risk lovers will not prefer this kind of share.

• Claims of equity shareholders diluted by the preference capital.

• It is not possible to deduct the dividend paid from the profits as an expense.

• So, in a nutshell, shares of certain companies are based on two types of shares namely equity shares and preference shares. Both the shares are equally important in respect of shareholders of companies and both of them have certain merits and demerits. 

Quick Hacks to Test your Knowledge on Equity Shares and Preference Shares Incorporating

A student must be thorough with equity shares as well as preference share by understanding the basic concepts related to this topic. In order to make it convenient for the students, here are listed the differences between equity share and preference–

1. Preference shares can be transformed into equity shares but equity shares can not be transformed or changed into preference shares. 

2. On the basis of Dividends, equity shareholders do not get fixed dividends while preference shareholders have fixed dividend payout who receive the dividends before equity shareholders. 

3. Equity shareholders have the right to vote in the company meetings while preference shareholders enjoy no such votes in the company annual meetings. 

4. The rate of dividend received by the equity shareholders can fluctuate based on the turnovers and profits of the company while preference shareholders enjoy fixed payout on dividends. 

5. Upon winding up of company and liquidation of company assets, preference shareholders receive repayment of capital while equity shareholders do not.  

Upon understanding the difference between them both, a student can understand the advantages and disadvantages of both of the types of shares deeply. It will surely come in handy during preparing for exams. 

The objective of Financial management

A student must understand the importance of financial management since it is an essential concept in Commerce. Here are a few points that explain that throws some light on the objectives of finance management–

1. Financial management delves primarily into maximising the shareholder’s wealth corresponding to the current market rates of equity shares. The wealth can be optimised upon optimum utilisation of present funds. 

2. The cost has to be minimized and in order to achieve that, the funds should be acquired at the lowest minimum price and rate so that the financial planning can come to successful fruition. 

3. The composition of capital must be a perfect balance between funds and debts. 

4. The returns must always exceed the investment so as to optimize the utilization of the funds which in return makes the utilization more effective and efficient. 

5. The investment must be safe and free of risks so that the plan works in favor of shareholders in maximizing their returns.  

• Students can find the notes of Equity shares and Preference shares from ’s official website as well as the mobile application. The solutions to questions on textbooks of Class 11 and 12, sample questions as well as practice papers can also be found and downloaded in PDF formats. 

• Incorporating on a regular study schedule can be beneficial for a student in terms of understanding Equity shares and Preference shares. Live sessions, as well as doubt clearing sessions, are available for students’ ease and convenience. 

• The basic concepts and textbook solutions to the Equity Shares and Preference Shares chapter are also available on the e-learning platform that will surely help the students who are looking for an easy understanding of this topic and make notes for exams. 

• To better understand this topic, a student may also indulge in understanding the market practices and learn from the experts regarding the investment policies as well as stock market practices to make it more elaborate in terms of understanding the shares and investment behind it. 

• A student must study this topic regularly and understand the differences between both of the shares in order to clear the basic concepts and prepare for the exams with more agility and confidence. 

Summary on Equity and Preference Shares

• Equity shares and Preference shares are one of the core topics in a basic understanding of commerce that must be taken seriously but they must be understood along with the concepts of capital structure. 

• Capital structure is the blend of equity funds and debts that results in total capital. Some of the factors of capital structure that centre around equity and preference shares are listed below for a quick reference–

1. Cost of equity 

2. Floatation cost 

3. Cost of debt 

4. Considering risks (Financial risks and operating risks) 

5. Stock market conditions (Bullish phase and Bearish phase) 

6. Cash flow position 

7. High and low return of investment 

• A student must prepare notes and pay minute attention to the definitions and explanations of the concepts without neglecting the advantages and disadvantages of equity shares and preference shares. Writing them down also helps in memorising them. 

• A student can refer to the visual concepts and interactive sessions that are available over . It is helpful for the students to recall the answers later during examinations. 

• The solutions regarding equity shares and preferences that are available over ’s website are curated for easy understanding of the concepts and can be downloaded for incorporating the notes and solutions for revision. 

• The sample papers have proven to be essential for scoring better marks in the exams, however,  textbooks are just as important so a student should pay attention to both of them.