Trade Class 9 Geography Notes Maharashtra State Board
Based on the information obtained, you will realize that we buy the goods we need from the shops, markets, or malls around us. Generally, the sellers of these goods are not the manufacturers of the goods. They bring these commodities from somewhere. These commodities don’t need to be manufactured in our surroundings. They are manufactured at places very far away. They could be first brought by retail sellers from wholesale markets, factories, agricultural product market committees, etc. and then they reach us.
We have various needs in our day-to-day life. We buy various things to satisfy these wants. When we buy them we create a demand for them. To fulfill the demand for these products, the production of these goods is carried out. The producer supplies these goods. In other words, he sells them to wholesale traders. Thus, the buying and selling of goods is done to fulfill each others’ needs. Those who purchase are the consumers of the goods. The producer produces and the sellers sell the goods. Buyers and sellers buy and sell the goods, respectively. This is called trade.
Trade is an important economic activity. The economic life of people is interdependent. No region or country is self-sufficient. Trade between two regions is necessary to fulfill the needs of the people. As each region has different geographical conditions, each region produces specific commodities. If there is a paucity of a commodity, then there is demand for that commodity. The place where it is abundant supplies the commodity. Thus, supply is done from regions producing excess commodities to regions facing a deficit according to the demand. For example, apples produced in Jammu and Kashmir are sent to other states of India having a demand for them.
Trade is an age-old concept. In ancient and medieval periods, trade was done through the barter system. In this, there was an exchange of goods with other goods. Grains were exchanged instead of work done or oil, salt, honey, and milk were exchanged for grains. There was no currency used in this trade. Even today we see traders who exchange utensils instead of old clothes but this creates problems in estimating the proper price of commodities. Earlier too such problems were encountered. As a result, the use of currency started. Today, in this modern age, trade is carried out with the help of currency only but the barter system is still prevalent to a small extent in remote areas amongst the tribal people.
In the above instances, when there is buying and selling of goods, it is called visible trade. On the other hand, when there is an exchange of services, it is called invisible trade.
Types of Trade:
According to the Quantity of Goods:
Depending on the quantity of goods, there are two types of trade: wholesale and retail.
Traders buy commodities on a large scale directly brought from the producers. The commodities are also sold on a large scale to retail traders. This is called wholesale trading. Wholesale traders buy goods on a large scale from industrialists, farmers, etc. For example, the orchard owners of mangoes or oranges sell their entire production to wholesale traders.
When the traders buy goods from wholesale traders and sell them directly to consumers, then it is known as retail trading. The quantity of goods sold is less in this case. For example, the shopkeepers selling goods, vegetable vendors in markets, etc.
According to the extent of the Region:
The buying and selling of goods happens at various levels. On that basis, trade can be divided into local, regional, national, and international trade.
Domestic Trade (Internal Trade):
This trade takes place between different regions within the same country. The size of the country, diversity, distribution, and availability of natural resources affect the internal trade within the country. The size of the population, transport and communication services, the living standard of the people, marketing system lead to large-scale internal trade. In India, factors like diversity in geographical conditions and high population also affect domestic trade. A country’s development is dependent on the extent of the domestic trade. If there is good economic growth, then trade will also be more. Thus, there is a positive relationship between economic growth and trade.
International trade means the exchange of goods and services of one country with other countries. Some countries produce specific products in excess, for example, crude oil in Saudi Arabia, Kuwait, and wheat production in the USA, Canada, etc. These products are sent to countries having demand for those goods. This led to the beginning of international trade. When international trade takes place between two countries it is bilateral trade. When it occurs between more than two countries it is called multilateral trade.
Export and Import:
Export and import are the basic processes of international trade. When a country buys goods and services that are scarce in their own country from another country, it is known as import. When a country produces more goods or services than required, it sells these to countries that have a demand for them. This is called export.
Balance of Trade:
The difference between the import and export values of a country in a specific period is called the balance of trade. Following are the types of balance of trade:
When the value of imports is more than the value of exports, it is called an ‘unfavourable balance of trade.’
When the value of exports is more than the value of imports, it is called ‘favourable balance of trade’.
When the value of exports and imports is almost the same, it is called a ‘balanced balance of trade’.
International Trade Organisations:
Carrying out trade at an international level is a more complex process than domestic trade. Trade takes place between two or more nations. Factors like the economy of the country, government policies, markets, laws, judicial system, currency, language, etc. influence trade. The political relations between the two countries also influence the trade between them. Sometimes, the obstacles in the way of trading affect the mutual relationship adversely. To avoid this, international economic and trade organizations came up. To smoothen and justify the process of trade between countries of different economic standing, some international economic organizations were formed. These organizations work towards the facilitation and growth of international trade. The details of a few organizations have been given here in the following table.
Some Economic Organisations of the World
An appropriate presentation of any commodity is indispensable. The price of the commodity is determined by its quality, its grading, and how it is presented before the customer. Dhondiba’s commodities lacked this. Dhondiba’s son recognized it and adopted the necessary changes on time. Thus, when we take similar measures for industrial and agricultural products, the value of the commodity increases from the customers’ view. Thus, the product fetches a good price, and demand for the product increases.
A list of a few goods you regularly use at home is given here. Write the name of the product, the manufacturer’s name, and the source of information in front of it.
After answering the questions above, you must have realized that it is necessary. To have a good quality product. Also, its advertisement affects us. Everyone doesn’t possess knowledge about every product but when we see others using that product or if we see an advertisement about the product when we enquire about it or see it in the market, it occurs to us that we need to use this product and we buy it. All this is possible because of marketing. Good marketing promotes business.
Importance of Marketing:
Modern industrial social fabric, globalization and availability of abundant choices/alternatives of products are the structure of today’s business world. In this context, the existence of a marketing system for trade is very important. Through marketing, one can increase business systematically. The production can be distributed all at once on a large scale. The product can reach a large number of consumers. The selling price of the product also increases. Also, defective products can be recalled from the market. Therefore, in today’s era, marketing is a vital part of trading systems. Advertisements making the customers feel the need to buy the goods are on the rise. Reaching maximum customers, attracting consumers to the products, and making consumers buy the products are the objectives behind them.
In recent times, information technology and media have affected the marketing systems deeply. Because of the revolution in the field of information technology, the whole world has become a big market. Through the Internet, we can get information about the production taking place in various countries. This makes numerous options available to the customers. It is due to the Internet that customers can use facilities like ‘online trading’, ‘e-marketing’, etc. An invisible flow develops when a product goes from producer to consumer. The commercial functions involved in this flow are collectively called marketing. The price of a commodity, sales promotion, advertising, and distribution are the major components of marketing.
If a product is advertised using incorrect information, fraudulent means, or exaggerated statements to cheat the consumers, pointing out the shortcomings of the competitors, then advertisements tend to lose our trust many times. Therefore, while advertising, it is necessary to follow rules and regulations. Consumers should also be aware of such advertisements. That is why the Consumer Protection Act has been enacted. It is necessary that the consumer recognizes his own needs and buys goods at reasonable rates.
Well-structured Maharashtra State Board Class 9 Geography Notes Trade can reduce anxiety during exams.