we discuss primary sector, secondary sector and service sector. Manufacturing sector,

1. Spectrum of Business Activities
Kulbir Singh

2. The spectrum of business activities is very wide. It
should not be confused with trade. Trade is
concerned with purchase and sale of goods and
services whereas business includes primary,
secondary and service or tertiary sector.

3. Sectors of Indian Economy
Primary Sector
Secondary Sector
Service or Tertiary Sector

4. Primary Sector: it relates to all those activities which
are concerned with the extraction, producing and
processing of natural resources. The activities covered
under this sector are:
• Agricultural
• Forestry
• Fishing

5. Secondary Sector : This sector includes those
industries which are related to the process of
materials which have already been produced at the
primary stage. These industries cover following
activities:
Manufacturing
Construction
Electricity, Gas, Water supply

6. Service or Tertiary Sector: It deals with all those
activities which smoothen the flow of goods and
services from manufacturing to those who use them.
This sector supplements the activities of primary and
secondary sectors. The activities included in this
sector are :
Trade
Transportation, storage, communication, advertising
Financial services like banking and insurance
Public administration and defense.
Community and personal services

7. Manufacturing Sector
Manufacturing sector is concerned with the conversion
of raw materials into finished products. There may also
be industries producing semi-finished goods and then
other industries converting them into finished goods
through further processes. Manufacturing is the base
for the economic development of a country. The
development of many industries is linked to the growth
of manufacturing industries

8. Types of Manufacturing Industries
Analytical industries: In this industry a product is analysed
and many products are received as final products. In the
processing of crude oil, we will get kerosene, petrol, gas,
diesel etc.
Processing Industries: In this industry a product passes
through various processes to become a final product. The
finished product of one process becomes the raw material of
the receiving process and so on, the final process produces
the finished goods. For examples Cotton textiles, sugar
industry and paper industry

9. Synthetic Industries: Many raw materials are brought
together in manufacturing process to make a final
product. In manufacturing cement, rocks gypsum,
coal, etc. are required. Soap making, paints are the
other examples.
Assembly Industries: This industry assembles
different components to make a new product, as in
the case of television, cycle, car, computer, etc.
Conditioning Industries: These are those industries
which employ conditioning process in the production
of goods. A conditioning process involves such
procedures as rolling, casting, blending, forging, etc.

10. Service Sector
The service sector consists of the soft part of the
economy i.e. activities where people after their
knowledge and time to improve productivity,
performance, potential and sustainability. This
sector produces services instead of end
products. The tertiary sector of industry involves
the provision of services to other business as
well as final consumers.

11. Service
service is a transaction in which no physical
goods are transferred from the seller to the
buyer.
According to Philip Kotler, “Any activity or
benefit that one party can offer to another that
is essentially intangible and does not result in
the ownership of anything.

12. Characteristics of Services
• Intangibility: service are intangible. They
cannot be seen, felt, heard or smelt before
they are bought unlike physical products.
• Inseparability: It cannot be separated from
the service provider.
• Variability: service are highly variable. One
may not have the same service from the same
seller the second time.

13. Perishability: service are perishable and cannot be
stored.
No Ownership: Service consumers will have
experience but not ownership. Since the services are
intangible and perishable, there is no question of
ownership

14. Need for Service Sector
• Need for financing activities: For long term and short term
funds. Long term funds for purchasing the fixed assets and
short term funds for day to day running of a business.
• Need of creating awareness among consumers: In the
competitive market as at present the producer will have to
convince the consumer about the utility of goods which he
has produced. This activity brings in the service of
advertising.
• Need for sending goods to consumers: There is need for
certain agency which takes goods from producers and
suppliers them to consumers. This service is taken by the
middlemen.

15. • Need for distributing the goods : There is need to send the
goods to the consumers. The service of transporters and
other supportive agencies are required for this purpose.
• Need for insuring risk: There is need to provide insurance
cover when goods are taken from producer to consumer.
There is a risk of damage, theft or pilferage of goods while
in transit. The producer and middlemen will try to cover
this risk by getting the goods insured with insurance service
provider.
• Need for storage and safety of goods : goods are
produced round the year but their demand may be
prominent at specific periods. Warehousing facilities are
required to store the goods for meeting future needs.

16. Importance of service sector
• Better consumer service: Service sector helps in improving
customer services. Better customer service is the best way
of having an edge over competitors.
• Additional sales volume: An efficient service sector helps
in increasing the volumes of sales. Proper publicity and
advertisement of goods and services helps in creating more
and more customers and higher demand
• Lower distribution costs: The cost of distribution of goods
from producers to customers form an important part of
cost. An efficient system of transportation and storage will
help in lowering the cost of distribution.

17. Stabilization of prices: Service facilities help in stabilizing
prices at different places and regions. The efficient
transportation system helps in the quick movement of goods
to those places where there are in more demand. These
facilities help in maintaining stable prices at different places.
Time and place utilities: service sector adds time and place
utilities in goods when goods are produced in excess of
demand than these can be stored in warehouses. The goods
will be supplied only when these are required.

18. Thanks