Production of goods or services

Manuf Resources required: Finance (purchase land, build warehouse, buy raw materials, pay
acture wages, insurance.
r or Requires: skill, personnel, marketing of the product, transport
Produ
cer

Buys in bulk from the manufacturer

Takes on the duty of marketing the product
WHOL Provides warehousing for storage of goods in large quantities
ESALE Also stores goods and releases them in times of shortage
R

Buys in bulk
Breaks the bulk to buit the requirements of individual customers
Provides goods in locality, which may be distant from the source
RETAIL
ER Provides personal services to customer

CUSTO
MER
ADVANTAGES
Convenience: You don’t have to worry about how
much cash you have on hand.
Easy access to credit
The biggest advantage of a credit card is its easy access to
credit. Credit cards function on a deferred payment basis, which
means you get to use your card now and pay for your purchases
later. The money used does not go out of your account, thus not
denting your bank balance every time you swipe.
Recordkeeping: A credit card provides a useful record of
your spending through your monthly statement and online
account. Some credit cards do send yearend summaries,
though, that can be a great resource when you’re doing
your taxes
Temptation: Since they’re so easy to use, they also make
it easy to overspend.
Easy to overuse
With revolving credit, since your bank balance stays the
same, it might be tempting to put all your purchases on
your card, making you unaware of how much you owe.
This could lead to you overspending and owing more
than you can pay back, beginning the cycle of debt and
high interest rates on your future payments.
Monthly scrutiny: You must review your bill each
month to confirm that it accurately reflects your
purchases and that there aren’t any signs of fraudulent
use of your card. Credit cards are a prime target for
scammers.
Record of expenses
A credit card records each purchase made through the card, with
a detailed list sent with your monthly credit card statement. This
can be used to determine and track your spending and purchases,
which could be useful when chalking out a budget or for tax
purposes. Lenders also provide instant alerts each time you swipe
your card, detailing the amount of credit still available as well as
the current outstanding on your card.
Low-cost loans: there’s a purchase you need to make
today. You can charge your purchase now and pay off the
charge after you get paid.
Credit card fraud
Though not very common, there are chances you might
be victim of credit card fraud. With advances in
technology, it is possible to clone a card and gain access
to confidential information through which another
individual or entity can make purchases on your card.
Check your statements carefully for purchases that look
suspicious and inform the bank immediately if you
suspect card fraud. Banks usually waive off charges if
the fraud is proven, so you will not have to pay for
purchases charged by the thief.
Interest charges: If you buy something and don’t pay it
off immediately, you will end up paying not only the
purchase price but also the interest charge on that
item. In other words, if you carry a balance, all your
purchases will end up costing you a little more.
High interest rate

Cash advances: You can get money when you need it.
Flexible credit
Credit cards come with an interest-free period, which is a
period of time during which your outstanding credit is not
charged interest. Ranging between 45-60 days, you can
avail free, short-term credit if you pay off the entire
balance due by your credit card bill payment date. Thus,
you can benefit from a credit advance without having to
pay the charges associated with having an outstanding
balance on your credit card.
Member perks: you can choose from a wide range of
discounts or cash back based on your purchases.
If you do not clear your dues by your billing due date,
the amount is carried forward and interest is charged on
it. This interest is accrued over a period of time on
purchases that are made after the interest-free
period. Credit card interest rates are quite high, with the
average rate being 3% per month, which would amount
to 36% per annum.
cash advances often have a higher interest rate, so it’s
important that you have a realistic plan to pay back those
advances
Hidden costs
Credit cards appear to be simple and straightforward at
the outset, but have a number of hidden charges that
could rack up the expenses overall. Credit cards have a
number of taxes and fees, such as late payment fees,
joining fees, renewal fees and processing fees. Missing a
card payment could result in a penalty and repeated late
payments could even result in the reduction of your
credit limit, which would have a negative impact on
your credit score and future credit prospects.
incentives and offers
Most credit cards come packed with offers and incentives to use your
card. These range from cash back to rewards point accumulation each
time you swipe your card, which can later be redeemed as air miles or
used towards paying your outstanding card dues. Lenders also offer
discounts on purchases made through a credit card, such as on flight
tickets, holidays or large purchases

Build a good credit history: Using a line of credit by
making purchases—and paying them off on time—will
help you get a good credit rating from credit rating
agencies, which will make lenders more likely to lend to
you and offer you a good interest rate.
Building a line of credit
Credit cards offer you the chance to build up a line of credit. This
is very important as it allows banks to view an active credit
history, based on your card repayments and card usage. Banks
and financial institutions often look to credit card usage as a way
to gauge a potential loan applicant's creditworthiness, making
your credit card important for a future loans or rental
applications.
Minimum due trap
The biggest con of a credit card is the minimum due
amount that is displayed at the top of a bill statement. A
number of credit card holders are deceived into thinking
the minimum amount is the total due they are obliged to
pay, when in fact it is the least amount that the company
expects you to pay to continue receiving credit facilities.
This results in customers assuming their bill is low and
spending even more, accruing interest on their
outstanding, which could build up to a large and
unmanageable sum over time.

EMI facility Tricky short-term teaser rates: A low interest rate may
seem like a good deal, but many people are surprised to
If you plan on making a large purchase and don't want to find that the rate was only temporary. If you don’t read
sink your savings into it, you can choose to put it on your the fine print, you may pay far more in interest than you
credit card as a way to defer payment. In addition to this, expected.
you can also choose to pay off your purchase in equated
monthly installments, ensuring you aren't paying a lump
sum for it and denting your bank balance. Paying through
EMI is cheaper than taking out a personal loan to pay for a
purchase, such as a television or an expensive refrigerator.

Fees: Some accounts have annual fees. There may also

be fees for cash advances, along with high interest
rates. In addition, you may spend more on interest and
fees than you earn in discounts or cash back.

Purchase protection: Your credit card may step in to help

if you want to dispute a charge or return a defective
product.

Purchase protection

Credit cards offer additional protection in the form of

insurance for card purchases that might be lost, damaged
or stolen. The credit card statement can be used to vouch
for the veracity of a claim, if you wish to file one.

PURCHASING WITH A CREDIT CARD – ADVANTAGES AND DISADVANTAGES, PROS AND CONS
Difference Between Credit Card and Debit Card
The differences between a credit card and a debit card are more than you can think of. Even though both cards often look the same, have many similar
functions.

The major difference is that with a credit card, the bank lends you money to use which you can use and pay them back with interest on a monthly basis.
Whereas, with a debit card, you are spending the money which you already have.

Debit Cards Vs. Credit Cards: A Comparison

Let's take a closer look at the differences between credit cards and debit cards.

Parameters Debit Card Credit Card

Deducts money directly from your saving's bank

Definition Allows you to borrow funds to pay for goods and services.
account or your current account.

Credit extended to you by your card issuer. It gives you

Source of funds Your savings bank account or current account. access to money you otherwise do not have (like a very
short-term loan).

Spending
You can only spend how much you have. Can spend more than what you have.
advantage
Parameters Debit Card Credit Card

Who pays for the The credit card company pays the vendor for your
You pay for your purchase.
purchase purchase. You pay the credit card company.

You get a bill or statement each month with details of the

Bill Monthly statements are online
transactions you have made.

There is no payment that needs to be made since you A bill needs to be paid each month since it is being
Payment
are using your own money. borrowed.

Credit cards have multiple fees applicable. These include

Fees and charges Annual fees and PIN regeneration fees are applicable. joining fees, annual fees, late payment fees, and bounced
cheque fees among others.

Interest is charged on the outstanding amount if it hasn't

Interest There is no interest that is charged.
been paid by the due date.

Limit to funds that You can access any amount up to what is currently You can use the card only up to the pre-set credit limit on
can be accessed available in your savings bank or current account. your card.

Get to enjoy cashback, air miles, and reward points which

Rewards Typically, the rewards you get are minimal
can be redeemed.
 Parameters Debit Card Credit Card

Come with numerous dining, retail, entertainment, and

Privileges Doesn't come with many privileges.
travel privileges (depending on the type of card you have).

Most cards offer 100% lost liability protection. So, you are
Lost card liability Protection from theft or loss of the card is minimal.
not liable for any unauthorised transactions made.

While a debit card may offer similar protection, you

Purchase Your credit card may step in to help if you want to dispute
will have to wait until the issue is investigated before
protection a charge or return a defective product.
getting your money back.

Pros and Cons of Debit Cards and Credit Cards

Now that you know the fundamental ways in which debit cards differ from credit cards, let's look at their pros
and cons.

Debit Cards
Pros
 There is no debt involved since you are using your own money.
 It is cheaper to use since there are no interest charges involved.
 Serves as an ATM card as well, so you can use it to withdraw money from an ATM.
 Approval for a debit card is easier and faster.
 Doesn't help build a credit history.
Cons
 You don't have the ability to leave disposable cash in your account since money is directly debited.
 It can complicate balancing your passbook at the end of the month if you don't keep track of your spending.
 You may be charged a fee if you withdraw money from a different bank ATM.
 There is very little protection when it comes to debit card fraud.

Credit Cards
Pros
 Credit cards are extremely convenient and prevent you from having to carry cash with you.
 Credit cards help you build your credit score.
 The rewards you earn are much higher than those on debit cards.
 They provide you with flexibility when it comes to spending since they come with relatively high credit limits.
Cons
 If you don't pay your bills on time or in full, you are charged a high rate of interest.
 Credit cards have multiple fees.
 Missing a payment (even due to genuine reasons) could end up adversely affecting your credit score. You then
must work much harder to build it.
 While there is a credit limit, you could always be tempted to spend more than what you have. This leads to debt.
 Demand of consumer goods can change even when prices are stable. This is due to external factors
like changing trends,
global issues,
the local and state economy, and even a
damaged brand identity.

Market factors affecting demand of consumer goods

The demand for a good increases or decreases depending on several factors. This includes the
product’s price,
perceived quality,
advertising spend,
consumer income,
consumer confidence, and
changes in taste and fashion. Understanding the many varied elements and the small CPG landscape that
affects product demand is hugely beneficial. Fortunately, we’ve compiled a list of the top seven factors
affecting demand for you. Select each factor below for a detailed breakdown.
Price of product
The single-most impactful factor on a product’s demand is the price. In general, there is a clear connection between the
price of a good and the demand. Higher prices create lower demand and lower prices create higher demand. This is due
to the satisfaction levels of consumers. If they can’t afford your good, there won’t be much demand for it.

This is also called the price elasticity of demand (PED). Price elasticity is usually a negative number, like -0.5. So, with
that example, if the price of a product goes up by five percent, its volume will go down by 2.5 percent.

Tastes and preferences

Consumer tastes and preferences have a direct impact on the demand for consumer goods. Unfortunately, preferences
can change within a market for a wide array of reasons. Some of these reasons can be intrinsic, while others are external.

For example, the tastes of single shoppers and families are vastly different. A family will likely buy child-friendly products,
while a single person is generally only shopping for themselves. Other influences can include:

 Age
 Geography
 Marital Status

Consumer’s income
As a rule, the more money consumers have, the more they like to spend it and buy more. Not only do wealthier groups
shop more frequently, but they tend to prefer high-quality, pricier products. The opposite is also true, meaning
that changes in consumer demand can ebb and flow along with general economic stability. During a recession,
consumers will spend less than they do in a boom.
Availability of substitutes
When talking about the availability of substitutes, the factors that influence it can include:

 Price Gaps – How much are your products compared to others?

 Distribution – Do competitors offer more items in a similar product line? Are those products more widely available?
 Relation of Substitutes – Are these products a direct one-to-one translation, or are they just similar? For example, coffee
and tea are unique, but if the price of one falls, the demand for it increases, reducing the demand for the other. This is even
more important when supply dwindles and consumers begin looking for alternatives.

Number of consumers in the market

In this case, demand is determined by how many people are buying a particular product. Therefore, the more consumers
available, the greater the demand. In some cases, this number increases because of population changes. In other
instances, demand goes up because the product appeals to more demographics. There, the number of consumers is
technically the same, but more of them are buying than before.

Consumer’s expectations
Another reason that anticipating demand can be so challenging is that you have to pay attention to both habits and
expectations. Unfortunately, it’s much harder to predict or understand these expectations. Overall, it’s much easier to look
at past data to figure out what could happen in the future.

Many things can influence consumer expectations. If we take the COVID-19 pandemic, for example, fears drove
consumers to buy toilet paper and hand sanitizer in massive quantities. Pre-pandemic, it would have been difficult to
anticipate that kind of reactionary spending
Elasticity vs. inelasticity
We discussed price elasticity, but this concept affects both prices and consumer demand. Elastic goods are those that are
affected by driving factors. Prices, availability, and competition can have a positive or negative correlation, depending on
the situation. As we illustrated, price elasticity is usually negative. However, if the driving factor is wider distribution, it
would create positive elasticity as your volume would also increase.

By comparison, demand for inelastic goods doesn’t fluctuate much (if at all) from external factors. For example, if the price
of Product A goes up, but the sales volume stays constant, that product is inelastic.
Use of modern technology in transactions


 Change in terms of how financial and commercial transactions are being conducted.
 Previously involved face-to-face contact
 Also involved mail order, telephone and fax
 Modern technology has revolutionized the way commercial and financial transactions are carried out.
 Many transactions are possible today without any form or human contact or communication.
 Freedom, choice in using modern technology to conduct transactions

Increased convenience and increased risks for consumers from using modern technology to conduct transactions.

ADVANTAGES/ BENEFITS/PROS DISADVANTAGES

Increased security – reduced need to carry and use Credit/debit cards can be hacked
cash, which can be more easily stolen
Convenience – allows people to carry out transactions People who are not tech-savvy are at a disadvantage
any time of the day or night, from any location.
No longer need to visit the bank or shop to carry out
transaction.
For goods sold online, online store is open 24 hours of
every day.
Opportunity to shop in multiple websites Connectivity (internet) problems
Easy access to goods and services, money and financial
records – from a computer with internet access
Time-saving – No need to travel to visit bank or store,
saves time.
Accessibility – online services are available regardless
of the customer’s level of personal mobility and the
availability of suitable transport e.g. persons in
wheelchairs, visually impaired persons.

 Integration
– use of mobile devices to access banking records and make banking transactions
- Use of payment platforms for mobile devices e.g Endcash
- Use of payment platform at lottery centres e.g. Via
- Use of portable, wireless payment machines e.g. Linx
- Use of QR code scanning to access websites and make payment e.g. KFC
- Use of technology to make money transfers to friends and relatives throughout the region e.g. Western Union, Moneygram