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Marketing
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a series of services involved in moving the product from the point of production to the point of consumption
Market
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a place where buyers and sellers meet to exchange goods and services
Why is Marketing Productive? Because it creates utility Types of Utility - Place - Possession
- Form - Time
Marketing Components/Subsystem
Producer Subsystem o Channel Subsystem o Flow Subsystem o Functional Subsystem o Consumer Subsystem o Environment Subsystem
o
o
o o
What to produce and how to prepare it for sale When and where to sell Who will do the task What to do to expand the market Which marketing arrangements are desirable What practices necessarily be changed
Characteristics of the Products Number of Producers Characteristics of the Consumers Reflecting the demand of consumers
The Commodity Approach The Institutional Approach The Functional Approach The Conduct Performance Approach
Middlemen
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are those individuals or business concerns that specialize in performing the various marketing functions involved in the purchase and sale of goods as they moved from producers to consumers.
Classification of Middlemen
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Merchant Middlemen Agent middlemen Processors and manufacturers Facilitative Organizations Market Associations
Exchange Function
Physical Function
Facilitating Function
PRICES
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the amount of money plus goods which is needed to acquire in exchange of some product and its accompanying services the attribute of an item that makes it capable of satisfying wants is the quantitative expression of the power a product has to attract other products in
Utility
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Value
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Roles of Price
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tell producers what and how much to produce keep supplies coming forward in line with consumer demands rationing and allocating function guide the channel of trade ration the goods and services to those who demand them
PRICE DETERMINATION
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Pricing Strategies
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Skimming the Market Moving down the demand curve Penetration Pricing
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Competitive Pricing Psychological Pricing Unit pricing Price Lining Special Prices
MARKETING CHANNELS
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refers to the set of interdependent institutions and agencies involved in the task of moving products from their point of production to the point of consumption
It varies according to the types of commodity handled, time and location Producer Retailers Consumers Sample Marketing Channel with One Middlemen
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Nature of Product
Nature of the Market
Contract buyers Wholesalers Commission agents Assembler Wholesalers Butcher Retailers Retailers
Marketing Margin refers to the difference between what the consumer pays and what the producer receives for his agricultural produce.
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Types of Margins
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Absolute constant margin constant regardless of quantity Percentage margins absolute margin divided by the selling price
where: Absolute margin = Selling Price Buying price Absolute margin %Mark-up Buying Pricex 100
% Margin
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Pr = a + b(Pf)
where: Pr = retail price Pf = farm price
Marketing Costs
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Marketing cost and the farmers share of the consumer peso Marketing cost differ among products Are marketing costs too high Marketing efficiency
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Using marketing margins Input-output measurements Evaluation of product loss and waste
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Standardization
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is the practice of making the quality specifications of grade uniform among buyers and sellers and from places to places and time to time.
Advantages of Grading
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Determination of Standards
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The objective of ideal standard is to aid the consumer in telling the producer what he considers desirable in a product.
Built on characteristics that users consider important and easily recognizable Built on factors that can be accurately and uniformly measured and interpreted.
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Should use terminologies in grading meaningful to all kinds of users Should consider the quality of the product produced Should pass the adequacy of standard in acceptance use
Number of grade classes Grade terminology Quality deterioration Relevant quality characteristics
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Space Dimension of Marketing Transportation Primary Concern of Transportation Time and Transfer Cost
Location of Production Market Area Served Farm of Product Marketed Size and quality of product marketed
If demand for the product is inelastic buyers will bear the transportation cost If demand and supply have the same elasticities both buyers and sellers will bear the added cost equally
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Seasonal nature of production Demand for the different products throughout the year Time required to perform the various marketing services The need for a carry-over into the following seasons.
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Objectives of storage
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To help balance supply and consumption or to balance periods of plenty and periods of scarcity.
Place of Storage
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cost that provide and maintain the physical facilities for storage
Repairs Depreciation Insurance
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interest on the amount of capital invested in the stored products quality deterioration, shrinkage during storage, insect and rodent damage
Risk of Storage
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Time of Storage
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ADVERTISING
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To inform consumers what is available for purchase. To change the demand for the product.
Food products have a number of unique characteristics Food products have to be processed before use by consumer Demand for most products is inelastic (purchase of products remain uniform, even with changes in prices.)
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Competition among food products is in price. Food products have few emotional appeals. Difficulty of getting sufficient funds for conducting and advertising program.
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Farm product advertising is most successful for commodities moving to the consumers in fresh. There should be substantial amount of money intended for advertisement. Use commodity advertising.