Approaches to the study of agricultural marketing

Functional approach
The

study of marketing involved in classification of activities that occur in the marketing processes by breaking down the processes into functions. A marketing function is defined as a major specialized activity performed in accomplishing the marketing process. approach attempts to answer the what

functional

The functions are classified as follows

1.

Exchange functions 2. Physical functions 3. Facilitating functions

1. Exchange functions
Exchange

functions are activities involved in the transfer of title to goods, through buying and selling functions.

Buying function
This It It

function is largely one seeking source of supplies. can be the assembling the raw products from the production areas. can be the assembling of finished products into the hands of other middlemen in order to meet the demands of the ultimate consumer.

Selling function
It

consists of various activities that are sometimes called merchandizing, physical arrangements of display of goods, advertising and other promotional devices to influence or create demand.

2. Physical functions
those

activities that involve handling, movement, and physical change of the actual commodity itself.

Storage function
It

is concerned with making goods available at the desired time. It may be activities of elevators in holding large quantities of raw materials until they are needed for further processing. It may also be holding of supplies of finished goods as the inventories of processors, wholesalers or retailers.

Transportation function
It

is concerned with making goods available at the proper place. It also includes the activities involved in preparation for shipment such as crating and loading.

Processing function
It

includes all those manufacturing activities that change the basic form of the product, such as converting live animals into meat, fresh peas into canned or frozen peas, or wheat into flour and finally into bread

3. Facilitating functions
Facilitating

functions are those activities that make it possible for the smooth performance of the exchange and physical functions. These activities are not directly involved in either exchange of title or the physical handling of products.

Standardization function
It

is the establishment and maintenance of uniform measurements of both quality and quantity.

Financing function
It

is the use of money to carry out various aspects of marketing. Financing may take the obviously recognizable form of credit from various lending agencies or the form of tying up the owners capital resources.

Risk bearing function

It is the accepting of the possibility of loss in the marketing of a product. Physical risks are those that occur from destruction or deterioration of the product itself by fire, accident, wind, earthquakes, cold, and heat. . Market risks are those that occur because of the changes in value of a product as it is marketed.

1.

2.

Market intelligence function

It is the job of collecting, interpreting and disseminating the large variety of data necessary to the smooth operation of the marketing processes. Market research- to evaluate possible alternative marketing channels that may be used, the different ways of performing other functions. Demand creation- activities involved in advertising the product and designing a promotional devices using either mass media or house to house campaign.

Institutional Approach
study

the various agencies and business structures which perform the marketing processes. institutional approach to marketing problems focuses attention on the who. this approach the human element receives primary emphasis.

the In

Middlemen
Middlemen

are those individuals or business concerns who specialize in performing the various marketing functions involved in the purchase and sale of goods as they are moved from producers to consumers.

Classifications of middlemen

Merchant middlemen- normally take title to, and therefore own, the product they handle. The buy and sell for their own gain and derive their income from the margins arising from the sales.

1.

Wholesalers: Any merchant who does not sell to ultimate consumer in any significant amount. He therefore can sell to other wholesalers or to industrial users or retailers. Retailers: Any merchant middlemen who buys goods / services for resale directly to ultimate consumers. Represent the most numerous types of agencies involved in the marketing process.

2.

Classifications of middlemen
Agent Are

middlemen of marketing dont own what they handle. basically hired by their principals or clients are paid by their clients or commissions given.

they

Agent middlemen

. Commission agents are given more discretionary powers over physical handling of the product, arrangement for terms of sale / purchase, collection of revenue from sale. Brokers: hey are not given any physical control over the product. They ordinarily follow directions from their principals. Usually have little power over terms of sale or revenue collection. Bring seller and potential buyer together. Auctioneers: They do not own what is handled, may be involved in a number of activities. Have places for physical display, space where participants meet, announce the date of auction, facilitate in price formation.

Classifications of middlemen

Speculative middlemen. Are those who take title to goods / products with a major purpose of profiting from price movement. They are specialized risk takers. Speculative Middlemen are interested in short term price fluctuations. Speculators derive their income from short term price fluctuations in goods they handle.

The emergence and growth of speculative Middlemen is due to the fact that merchant middlemen are not willing to engage themselves in added risk involved in purchasing and storing of goods for longer period of time.

Processors and manufactures

Their

role in marketing in to undertake some action on the products in order to change their form. Form changing is basically a marketing service

The Structure-Conduct-Performance approach

The

Market Structure refers the organizational characteristics that establish interrelationships between the buyers and sellers of a particular market. Its elements include the number and size distribution of buyers and sellers, the degree of product differentiation, the ease of entry of new firms into an industry, vertical integration and cost structure.

Market structure
Pure

competitive market.

Absolute
oligopoly

monopoly
market

Monopolistic

Market conduct
Refers

to the way firms adjust to the markets in which they are engage as buyers and sellers. It is the behaviour or pattern that the firm exibits in the market.

Market performance

is the appraisal of how much the economic resource of the industrys market behaviour contribute to achievement of socio economic goals.

profitability, growth rate, technological advancement)