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Business, Trade and Commmerce — Business Studies STD 11 Commerce — Question

CBSE BoardEnglish MediumSTD 11 CommerceBusiness StudiesBusiness, Trade and Commmerce6 Marks
Question
Phoenix Technologies Ltd., have developed such a washing machine through years of research which requires very less water for washing clothes and cleans them without damaging the cloth, as compared to other washing machines presently being sold in the market.
This machine use 3D wash system, whereby there are 3 nozzles to spray water inside the drum while it rotates 360 degree. This facilitates complete dissolving of detergents and deep penetration of detergents into the clothes while washing. During the rinsing stage, the 3D wash system helps better penetration of fresh water in to the clothes, thereby minimizing any detergent traces in the clothes.
This machine is available at a highly competitive price to motivate people from lower middle class to buy it. The company wants to provide information about new features, price, availability and brand name to the maximum potential customers.
On the basis of the given information about Phoenix Technologies Ltd., answer the following questions:
(a) Explain the service facility/aids to trade which the company can utilize to generate maximum sales.
(b) Explain other service facility/aids to trade facilitating smooth movement of goods from the producer to the ultimate consumers.
✓

Answer

(a) The aids to trade which the company can utilize is Advertising.
Advertising is one of the most important methods of promoting the sale of products, particularly for consumer goods. Advertising helps business activities to overcome the hindrance of information. Advertising helps to inform the potential buyers about the uses, quality, prices, competitive information about the goods etc.
(b) The other service facility/aids to trade facilitating smooth movement of goods from the producer to the ultimate consumers are:
(i) Banking: Business activities cannot be undertaken unless funds are available for acquiring assets and meeting the day-to-day expenses. Banking helps business activities to overcome the problem of finance.
(ii) Insurance: Business involves various types of risks. Factory building, machinery, furniture, etc., must be protected against fire, theft and other risks. Material and goods held in stock or in transit are subject to the risk of loss or damage. Insurance provides protection against business risk. On payment of a nominal premium, the amount of loss or damage and compensation for injury, if any, can be recovered from the insurance company. So, insurance helps business activities to overcome the problem of risk.
(iii) Transportation and Communication: Production of goods generally takes place in particular locations. But these goods are required for consumption in different part of the country. The obstacle of place is removed by transport-road, rail or coastal shipping. Transport facilitates movement of raw material to the place of production and the finished products from factories to the place of consumption. There is also a need for communication facilities so that producers, traders and consumers may exchange information with one another.
(iv) Warehousing: Usually, goods are held in stock to be availableas and when required. Special arrangement must be made for storage of goods to prevent loss or damage. Warehousing helps business firms to overcome the problem of storage and facilitates the availability of goods when needed. So, warehousing helps business activities to overcome the problem of time. Prices are thereby maintained at a reasonable level through continuous supply of goods.

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