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INTRODUCTION
The study of marketing systems and their problems can be frustrating and confusing without a system
of organization and procedure to guide our observations, thought, and judgements. This leads to the building
of an organizational framework which will then provide us a unique perspective on the nature and workings
of the food marketing processes. This unit deals with the four major approaches to the study of agricultural
marketing, namely; commodity, institutional, functional, and market-structure-conduct-performance
approach.
As a whole, this module focuses on the ways of breaking down a particular marketing problem into its
parts so that it can be better understood.
LEARNING OBJECTIVES
By the time you finish this lesson, you will be able to:
comprehend the various approaches to the study Agricultural Marketing
analyze the uses of different approaches to the study of agricultural marketing
classify the major activities under different approaches to the study of agricultural marketing
describe salient features of market-conduct-performance approach
distinguish the different types of markets
LEARNING GUIDE
1. The Commodity Approach
refers to the study of a product in detail
characteristics of the product, the market demand, and supply situation at the domestic and
international levels
behavior of the consumers in relation to a specific product
prices either at the farm, wholesale, or retail level.
2. The Institutional Approach
studies the various agencies and business structures involved in the marketing processes
attempts to answer the question “WHO”?
gives more emphasis to the human element of the marketing process.
considers the nature and character of the various middlemen and related agencies
Middlemen
individuals or business concerns that specialize in performing the various marketing functions
may operate as individual proprietors, partnerships, or cooperative.
Also known as intermediaries or marketing channel
Classification of Middlemen
A. Merchant Middlemen
They take title to, and therefore own, the products they handle.
They buy and sell for their own gain.
Their income is in a form of profit.
a.1. Contract – buyers
buyer shoulders all the expenses in preparing the produce for the market
assumes the pre-harvest and post-harvest risks
a.2. Grain Millers
own warehouses and mills and procure grains from suppliers including their own agents,
farmers, wholesalers and farmers’ cooperative.
Do pre-harvest contract arrangements to ensure continuous supply.
Provide technical advice, inputs, improved methods of production
a.3. Wholesalers
They sell to retailers, other wholesalers, and industrial users
do not sell in significant amounts to ultimate consumers.
B. Agent Middlemen
They act only as representatives of their clients.
They do not take title to, and therefore do not own the products they handle.
They receive their incomes in the form of fees or commissions.
They sell their services to their principal, not physical goods to consumers.
b.1. Commission Agent
takes over the physical handling of the product;
arranges for the terms of sales;
collects, deducts his fees, and remits the balance to his principal
grains, poultry and livestock are commonly sold to wholesalers and processors through the
commission agent.
b.2. Broker
do not have physical control over the product
follows the instruction of his principal closely and has less discretionary power in price
negotiations
usually found in fish markets in the country.
D. Facilitative Organizations
Aid the various middlemen in performing their tasks
do not directly participate in the marketing processes, they furnish the physical facilities
aid in grading, arranging and transmitting payment
receive their income from fees and assessments from those who use their facilities
E. Market Organizations
active in buying and selling of goods and often have far – reaching influence on the nature of
marketing.
making goods available at the proper place; requires the weighing of alternatives of
routes and types of transportation costs; preparing product for shipment such as crating
and loading
b.3. Processing Function
At the macro-level, market performance is viewed through the goals which the society and the
marketing system hope to achieve, i.e. efficiency, employment, equity, progressive and effectiveness of the
industry.
SUMMARY
Several approaches to the study of marketing may be utilized to gain a thorough understanding of
marketing principles. The use of each approach however, will depend on the researcher’s objectives in
analyzing marketing problems. For example, if one is interested in a specific product, the commodity is the
best. It helps to focus attention on the characteristics of the product. The functional approach on the other
hand, looks at the various activities that are performed to increase the utility of the product as it moves from
the farmer to the consumer. Hence, any marketing services and their costs call for this kind of approach.
The institutional approach to marketing describes the people who perform the various functions in the
marketing system. thus, this approach gives emphasis on people and business organizations and not on the
characteristics of the product or on services added to it. If one wants a better understanding of the market
for goods and services where buyers and seller’s meet, then the market structure-conduct-performance
approach must be used. So far, this approach is the most comprehensive among all approaches. In doing
marketing studies however, a combination of two or more of these approaches are usually used.
Reference
PTIA Instructors and Participants from BAC, BUCA, PNAC, PSPC and SSAC. 1991. Resource Unit in
Agricultural Marketing during the National Seminar-workshop on Agri-business Management and
Administration on April 15-May 3, 1991. Central Mindanao University, Musuan, Bukidnon.