Examples of Production, Distribution and Consumption Activities

Knowing examples of economic activities in the form of production, distribution and consumption activities is very important so that we can distinguish the three.

In their daily activities, people carry out economic activities. These activities include buying, selling, and distributing a product or service. These economic activities are carried out to meet the daily needs of the community. Economic activity is an activity that is very close to the community, it can be said that news about economic activity will always be there every day.

For Sinaumed’s who want to see various other examples of existing economic activities, you can read the book 100 Basics of Economic Activity 1 which is below which provides material exposure through comics so that it is more fun to learn.

There are so many things that fall into the category of economic activity. But sometimes we don’t realize it. Economic activity includes three things, namely the production process, the distribution process and the consumption process. If Sinaumed’s doesn’t know examples of these activities, this article will explain and provide examples of economic activities.

A. Examples of Production Activities

Production is an activity to produce or create a service or goods. Goods created can be in the form of raw goods, semi-finished or almost finished goods, and finished goods or ready-to-use goods. In addition to adding value to an item, the production process in economic activity aims to seek maximum profit.

The objectives of production activities include the following:

  •       Meet consumer consumption needs
  •       Get maximum profit
  •       Helping to increase the prosperity of society
  •       Stimulating the opening of other production so that it can create jobs
  •       Help increase the income of the state and society
  •       Helping the country by producing goods that can be exported so that it becomes a source of foreign exchange

a. Example of Trade Production

Production in the field of trade is an economic activity that we often encounter. This production activity is the activity of reselling goods that have been purchased to consumers.

Examples of these activities include:

  • grocery shop
  • agent
  • stall
  • shop
  • supermarket
  • and others.

b. Industrial Sector

Production activity in the industrial sector is the production of material processing. Materials will be processed according to what will be sold.

Existing raw materials will be processed so that they become semi-finished, almost finished, or finished goods. In addition there is also the processing of semi-finished goods into finished goods.

Examples of production activities in this field are:

  • Processing wood raw materials into furniture.
  • factory produces leather bags
  • the factory produces clothes
  • restaurants produce food
  • the factory manufactures motorcycles
  • producing shoes

c. agricultural sector

Production in the agricultural sector is production done with nature. Processing of natural products to raise animals and plants.

Examples of production in the agricultural sector are as follows:

  • plantation (garden of mangoes, durians, watermelons, melons etc.)
  • animal husbandry (raising chickens, ducks, ducks, rabbits etc.)
  • aquaculture (cultivation of carp, tilapia etc.)
  • agriculture (growing rice, vegetables etc.)
  • and others.

d. Extractive field

Production in the extractive sector is the production of an item with minimal processing. The point is that there is no processing of the materials needed in production. Items are taken directly from nature.

Examples of production in the extractive sector are:

  • gold mining
  • sand mining
  • and others.

e. Service sector

Production in the service sector is indeed different from production activities in other fields. If production in other fields is to make goods, not with production in the service sector. Production in the service sector is production that produces a service for consumers.

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Examples of this production are:

  • hospitals that provide doctors for patients to treat,
  • banking provides employees to assist the financial process,
  • schools provide teacher services to educate their students,
  • open a barber service
  • provide graphic design services
  • provide architectural services
  • and others similar to the provision of services.

Examples of Producers in Indonesia

a. Food/Beverage Manufacturers

  •       Indofood
  •       Unilever
  •       Nestle
  •       Sido Appears
  •       Kraft Foods
  •       A B C
  •       Akasha Wira International
  •       Three Pillars of Prosperous Food
  •       ETC

b. Service Producer

  •       bni
  •       BCA
  •       BRI
  •       Indonesian Telecommunications
  •       Jasa Marga
  •       ETC

As an example of a producer in Indonesia, Sinaumed’s can study the production process carried out in Walanda Bandoeng’s Producer Ontbijt book below.

B. Examples of Distribution Activities

Factors Affecting Distribution

There are several factors that affect the distribution process, including the following:

a. Product factors
Non-durable products, such as food and beverages, have a different way of distribution than durable products such as clothing. The distribution process will be seen from the product, such as the quality of the goods.

b. Purchasing factors
Another factor that also influences the distribution process is the purchasing factor. Distributors must be able to see what is needed by buyers or consumers. Like whether the need for intermediaries in the purchase.

c. Factor markets
Markets are places for people to buy and sell. Market factors that influence distribution are how consumers buy, the number of consumers, the number of orders and so on.

d. Company Factors
The company factors that influence the distribution process in question are regarding funding in the distribution process. In addition, the management of the company also influences the distribution process. If the company’s work is good, then product distribution will run smoothly.

Examples of Distribution Activities Based on the Type of Channels

a. Indirect distribution example

Indirect distribution is the distribution or distribution of a product or goods, which is done through intermediaries. In direct distribution activities, producers do not directly provide or distribute their products or goods to consumers.

Goods or products that have been produced are distributed through agents or other sellers before they can reach consumers.

An example of an indirect distribution is:

  • a rice warehouse owner who does not sell his rice directly to the public, but through a rice agent.
  • a factory exports wood to other countries such as Malaysia, China, and so on using certain agents
  • a clothing factory sells its products using retail traders

With the development of technology in today’s world, intermediaries or distributors must also adapt to existing digital technology in order to survive. Learn about it through the Complete Distribution Management Guide book.

b. Semi-direct distribution

Semi-direct distribution is the distribution or distribution of a product or goods, which is carried out by someone other than the producer.

The difference with indirect distribution is that the person to whom the product or goods are distributed is part of the producer.

An example is a factory that produces goods or products and is distributed by a special team, which is still part of the factory.

c. Direct distribution

Direct distribution is the distribution or distribution of an item or product that is carried out directly by producers to consumers.

Examples of direct distribution are:

  • sellers of Nasi Padang side dishes who immediately serve their customers when they come.
  • Meatball sellers sell their meatballs directly to consumers by traveling around the village
  • a shop that sells food and drinks in a village.

With intermediaries in the distribution process, various strategies are needed to prepare it. Sinaumed’s can use the Business Opportunity Book to Establish a Distributor Company to develop the right strategy to form a good distributor company.

 

C. Examples of Consumption Activities

Read more: Definition of Consumption

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Characteristics of Consumption Activities

a. Consumption activities are carried out directly
One of the characteristics of consumption economic activities that must exist is that consumption activities need to be carried out directly. The point is that economic activity is carried out directly and aims to meet the needs of the community.

b. Goods or products obtained from purchasing activities
When consumers want to consume goods or products, the thing that must be done is to buy the product.

c. Products, goods or services used will be reduced.
An example of this characteristic is when a pencil is used for writing, over time the pencil will run out. This is an example of a product that used to be reduced. This happens because it is the consumption activity of consumers. If the product has been used, then the use value of the product will also decrease.

d. The product used is useful
The next feature in consumption activities is that the product or goods used have benefits or use value. Even though the value of the item that has been used is reduced, that means the item or product is useful.

There are two types of goods or products based on their value. First, products whose value runs out when used in one use. An example is food or drink. Second, products whose value will slowly run out when used continuously or repeatedly. Examples include notebooks, pencils, makeup, and others

Examples of Consumption Activities

There are three actors in consumption activities, namely household consumption activities, corporate consumption activities, and state consumption activities.

a. Examples of Consumption Activities by Households

Actors in household consumption activities can be categorized as the general public. Examples of these activities are:

  • buy food at the stall
  • buy clothes in the store
  • buy staples in the market
  • buy household items at the store
  • use a haircut
  • using netflix premium
  • use paid internet

b. Examples of Consumption Activities by Companies

Actors of company consumption activities are goods or products needed to run the company. When a company produces an item or product, the company will need raw materials. This is what is called the perpetrators of corporate consumption activities, for the benefit of the company. In consumption activities carried out by a company, it is important to always manage both expenses and income, and this can be learned by Sinaumed’s in the book Managing Business Transactions Accurate+ CD.

Examples of consumption activities in companies include:

  • Advertise on social media / internet
  • Purchase office equipment
  • Purchasing raw materials for production
  • Hiring workforce
  • Pay electricity rent, building rent, internet, telephone

c. Consumption Activity Actors by the State

A simple example of actors in state consumption activities are the things that the state needs to build people’s needs. Examples of consumption activities by the state:

  • state infrastructure development
  • personnel spending on salaries, benefits, meal allowances and other costs for civil servants
  • spending on state goods for government administration
  • spending by central government agencies
  • regional shopping
  • interest and debt repayments both domestically and abroad
  • subsidies are expenditures for various kinds of government subsidies such as the community such as fuel and electricity
  • construction of bridges in remote areas
  • construction of places of worship
  • and others.

Conclusion

Economic activity has three processes, namely production, distribution and consumption. These three processes are related to each other, when the production process is complete, distribution will be carried out to reach consumers. But before the production process takes place, producers certainly need raw materials to make a product, so that at this time producers act like consumers. This process will continue to rotate so that economic activity will run well.

That’s some information about economic activities in the form of production, distribution and consumption. Find other interesting information at www.sinaumedia.com. Sinaumed’s can find the right recommendation books to learn more about economics. sinaumedia as #FriendsWithoutLimits will always provide the best books.

Also read articles related to “Examples of Economic Activities” :

  • Definition of Consumption
  • How to Calculate Production Costs
  • Monetary policy
  • Definition of Economics
  • Definition of Macroeconomics
  • Definition of Microeconomics
  • Definition of People’s Economy
  • Types of Economic Systems
  • What is an Economic Recession

Source: from all sources

Author: Wida Kurniasih