Communication is the process of conveying information from a sender to a receiver with the use of a medium.

Effective Communication

In which the communicated information is understood the same way by both sender and receiver.

Importance of communication in commerce

  1. Need for exchange of documents in trade.
  2. Minimizes confusion and misunderstanding between buyer and seller.
  3. Ensures better business control.
  4. Business can get reliable and cheap information about their market.
  5. Frequent travelers need to develop a contact with their offices.
  6. International trading is not possible without efficient communication system.
  7. Modern banking is also dependant on communication system.

Elements of Effective Communication

  1. Sender.
  2. Recipient.
  3. Mode of communication.
  4. Feed back.

Mode of communications



  1. Quick.
  2. Normally cheap.
  3. Facial expressions can be seen.


  1. Message can be distorted.
  2. No proof or record.



  1. Record can be made.
  2. Sometimes it is fast and cheap in case of SMS and internet.
  3. Lesser chances of message being distorted.


  1. Some times it can be expensive.
  2. Useful only for literate people.
  3. Not very quick is case of newspaper and postal mail.

Postal Office

Ordinary Mail:

Registered Mail:

Express Mail:

Post Boxes:

Franked Mail/Prepaid Mail:

Air Mail:

Parcel Service:

Means of Payment:

  1. Money Order: For larger amounts.
  2. Postal Order: For smaller amounts.
  3. National Giro: For making payments in someone’s account.

Saving Account:


Agency Service:


1. Telephone:


  • Cheap.
  • Easily available.
  • Wide coverage.
  • Speedy.
  • SMS facility.


  • Facial expressions can not be seen.
  • Only two people.
  • No record.

2. Mobile Phones:


  • Can be carried any where.
  • Becoming cheaper.
  • SMS.
  • MMS.
  • Internet.
  • Payments of bills.
  • Enables travelers to keep in touch with his office.


  • Still expensive.
  • Informational can be distorted in case of weaker signals.
  • Not so wide coverage.
  • Battery needs to be charged.

3. Fax:


  • Confirmation of communication.
  • Fast.
  • Exact copy is received.
  • Record can be kept.


  • Expensive, charges are based on time and distance. Suitable only for sending few papers.
  • Fax quality is not so good. Limited life of fax copy.
  • Need special equipment on both ends.

4. Internet:

5. Intranet:

6. Email:


  • Used to send messages over the internet.
  • One must get an email address to use this facility.
  • Attachment can be done.
  • Quick.
  • Cheap.
  • C.C. and B.C.C. can be done.


  • Sender and receiver both required email address.
  • Virus.
  • Information can be distorted.
  • For computer literate people only.
  • Hacking.

7. Teleconferencing:

8. Videoconferencing:

Factors affecting choice of communications

  1. Cost.
  2. Speed.
  3. Accuracy of information.
  4. Availability.
  5. Nature of information.
  6. Secrecy of information.
  7. Distance.