MARKETING CO-OPERATIVES

A marketing cooperative is set up in order to market and sell the surplus

produce of its members, being such a surplus, as they cannot consume
themselves. Marketing cooperatives generally sell agricultural produce, but
there are also those, which sell fish produce or handicrafts.
There are also other definitions of cooperative
marketing. Margaret Digby defines a marketing cooperative as a system in
which a group of farmers join together in order to carry out part or all of the
processes involved in bringing the produce from the producer to the
consumer.TheBank of India defines a marketing cooperative as a society of
farmers, organized for the purpose of helping the members to market their
produce, so as to obtain higher profits than is possible by way of private
marketing.
Source of Finance
Marketing societies raise their finance by
Issuing Shares The State Govt. purchases half the number of shares.
Raising Loans Loans are raised from

The Central Co-operative Bank

The National Co-operative Development Corporation
The National Agricultural Co-operative Marketing Federation
The State Bank of India
The Marketing Board

Objective
To secure best possible market price for members products
To reduce the cost of marketing
To act as a powerful check upon the monopolistic power
To save farmers from exploitation

 Protection of consumers interest

Need and Importance

Abolition of Middlemen
Collective Bargaining
Storage Facility
Standardization and Grading
Higher prices to members
Large and wide Infrastructure
Supply inputs & Consumer goods
Relief from illegal deduction

Failure [Problems] of Marketing Cooperatives

They do not have sufficient storage space.
The loaning policy has been faulty.
Their operational costs are high.
Their staffs are untrained.
The operations of marketing cooperatives are not satisfactory.

Reasons behind Failure

The Farmers are indifferent to Co-operatives & traders and other
acquire the membership.
Marketing co-operatives do not have a well thought out programme of
action in regard to the conduct of different marketing activities.
There is no proper link between Primary Marketing Co-operatives and
State Marketing Federation, Primary Marketing Societies and Primary
Credit Societies.
The managing committees of most marketing societies do not take keen
interest in conduct of their business.
The marketing societies provide only few marketing services such as
processing, to the farmers.
Marketing societies suffer from lack of sufficient working capital.
Unhealthy competition with credit societies.
Inefficient supervisory machinery.
Measures for Improvement
Effective relationship between marketing and credit societies.
Primary Marketing Societies should be member of the State Marketing
Federation.
The marketing societies must work out the detailed plans best suited to
their local conditions.
The management committee should be wisely elected to ensure effective
functioning.
The Central and State Government must help the societies to build
proper storage places.

 Grading and standardization must be done by experts hired by

marketing society.
The Government must offer adequate financial assistance to marketing
societies.
FACTORS REQUIRED FOR IMPROVING THE WORKING OF
CO-OPERATIVE MARKETING SOCIETIES

For removing unnecessary & unhealthy competition between marketing

& credit societies an effective relationship must be established.
All the primary marketing societies should be members of the state
marketing federation so that they may avail of the specific facilities
provided by the apex organization.
Marketing societies must use the expert options for grading,
standardization, etc. so that it will create confidence among members.
The government must provide adequate finance for
meeting working capital & permanent capital.
The working of management committee should be boosted so that it will
increase the efficiency.
The government both Central & State must help the societies in an
effective manner to build proper storage places.
The societies should develop to offer new services to its members.
The marketing federation should develop a clear cut strategy for the
development of its member societies.
The co-operative principle should be widely published among the
farmers.

Cooperative Marketing Strategy

Marketing is an organizational as well as a set of processes aimed at creating,
communicating and delivering value to customers and for managing customer
relations in ways that benefit both the organization, its customers as well as its
numerous stakeholders. Coping with marketing exchange processes calls for a
considerable amount of work and skills. Marketing is a Management function.
It is an area that requires considerable efforts to develop in the cooperative
sector.
Different markets require specific marketing strategy options such as
1. Direct Consumer Marketing:Under this category, much of the strength lies on a very strong brand,
superior products, higher quality packaging, as well as ensuring continuous
availability and very strong presence. This is relatively low key in cooperatives
as the focus is mainly on bulking undifferentiated products which are bulky
and raw. There is limited research and development, limited investment in
value addition in the sector. On the other hand, there are vast potentials for
market development and access. Under this strategy, the ministry in
collaboration with cooperative societies should upscale and promote direct
consumer marketing in the sector in order to increase the market share of the
cooperative produced products. Information on what is available and needed
needs to be collected, packaged and disseminated at all levels.
2. Business Marketing:Business to Business dealing usually involves well trained and well informed
professional buyers on either side who seek to get either high value or lower
costs for their respective organizations. This is weak in cooperatives as few
cooperatives have embraced effective marketing in their organizations. Under
this Strategy, the ministry and cooperatives need to engage the services of well
trained marketing personnel and also embark on human resource
development and provision of Business Development Services (BDS). There is
great demand for high quality produce and commodities by manufacturers

and processors in the food industry, which cooperatives can take advantage of
through outsourcing, contracts, joint ventures and partnerships. The Ministry
should provide policy guidelines, promote and support functional marketing
departments in the Cooperatives, commencing with itself.
3. Global Markets:Organizations selling in the global Marketplace face additional risks and
challenges. They must decide which countries to enter, how to enter each
country, either as exporters, licensers, joint venture partners, contract
manufacturing or sole manufacturers. It also entails knowledge on pricing for
products in different countries and how to communicate. The penetration of
cooperatives in this market is currently minimal. There is limited information
on global, emerging markets, certification and trade requirements. The
Ministry should work very closely with other key government ministries
particularly the Ministry of Trade, Ministry of Agriculture, Kenya Missions
and Foreign Embassies represented in the country so as to establish the
potential and develop linkages in niche markets for niche products. Few
cooperatives have ventured into Fair Trade, Organic marketing and emerging
new markets.
4. Marketplaces and Market-spaces:Marketplace is physical, such as a shop or a departmental store. When
compared to other private business enterprises and a few agricultural
cooperatives with stores for resale of farm inputs, cooperative business
facilities are not cut out for marketplaces and market spaces. The presence of
cooperative products on the shelves in super and hyper markets is currently
low. There is need to develop linkages with the marketing chain and industry
players for space hire and franchising of products and services to enhance
cooperative presence and ownership of cooperative brands.
In market-spaces, the internet is a virtual shop. These are
emerging innovative markets that are fast developing and driven by
technological development. Online marketing is currently operating in very
few cooperatives. In this Marketing Strategy, the focus should be responding
to consumer needs, wants and demands through market positioning, market
segmentation, target marketing, coupled with properly linked communication
and distribution channels. E-Commerce is another opportunity which
cooperatives need to explore.

This notes is available on: - [djaysharma.yolasite.com]