APPROACHES TO STUDY THE MARKETING OF AGRICULTURAL PRODUCTS

1. APPROACHES TO STUDY THE MARKETING OF AGRICULTURAL PRODUCTS BY : NUR BALADINA, SP. MP.

2. INTRODUCTION • There are several ways to approach the study of agricultural product marketing and each orientation provides a unique perspective on the nature and workings of the agricultural marketing process. • Some of the approaches are purely descriptive, whereas others attempt to evaluate the agricultural marketing system and provide recommendations for improving it.

3. I. THE COMMODITY APPROACH • Mempelajari Komoditi (commodity oriented) dari fungsi pemasarannya(marketing function oriented) • Karakteristik produk • Situasi penawaran dan permintaan di dalam negeri dan internasional • Tingkah laku konsumen dalam hubungannya terhadap produk yang spesifik • Harga di berbagai tingkat (petani, pedagang besar dan eceran)

4. II. THE FUNCTIONAL APPROACH • One method of classifying the activities that occur in the marketing processes is to break down the processes into functions. • A marketing function may be defined as a major specialized activity performed in accomplishing the marketing process.

5. The Classification of Marketing Functions A. EXCHANGE FUNCTIONS 1. Buying (assembling) 2. Selling B. PHYSICAL FUNCTIONS 3. Storage 4. Transportation 5. Processing C. FACILITATING FUNCTIONS 6. Standardization 7. Financing 8. Risk Bearing 9. Market Intelligent

6. A. EXCHANGE FUNCTIONS • The exchange functions are those activities involved in the transfer o.f title to goods. 1. THE BUYING FUNCTION is largely one of seeking out the sources of supply, assembling of products, and the activities associated with purchase. 2. THE SELLING FUNCTION are the various activities that sometimes are called merchandising, advertising, the proper unit of sale, the proper packages, the best marketing channel, and other promotional devices to influence or create demands.

7. B. PHYSICAL FUNCTIONS • The physical functions are those activities that involve handling, movement, and physical change of the actual commodity itself. This function involved in solving the problems of when, what, and where in marketing. 3. THE STORAGE FUNCTION is primarily concerned with making goods available at the desired time. It may be the holding of supplies of finished goods as the inventories of processors and retailers.

8. 4. THE TRANSPORTATION FUNCTION is primarily concerned with making goods available at the proper place. It also includes the activities such as crating and loading, the weighing of alternatives of routes and types of transportation. 5. THE PROCESSING FUNCTION would include all those essentially manufacturing activities that change the basic form of the product, such as converting live animals into meat, fresh peas into canned or frozen peas, wheat into flour, and finally into bread.

9. C. FACILITATING FUNCTIONS • The facilitating functions are those that make possible the smooth performance of the exchange and physical functions. These activities are not directly involved in either the exchange of title or the physical handling of product, but without them the modern marketing system would not be possible. 6. THE STANDARDIZATION FUNCTION is the establishment and maintenance of uniform measurements, both of quality and quantity.This function simplifies buying and selling, because it makes the sale by sample and description possible.

10. 7. THE FINANCING FUNCTION is the use of money to carry on the various aspects of marketing to the extent that there is a delay between the time of the first sale of raw products and the sale of finshed goods to the ultimate consumer. 8. THE RISK BEARING FUNCTION is the accepting of the possibillity of loss in the marketing of product. These risks can be classified into two broad classifications: physical risks and market risks. The physical risks that occur from destruction or deterioration of the product itself by fire, accident, earthquakes, etc.

11. Market risks that occur because of the changes in value of a product as it is marketed, a change in the operation of competitors might result in a loss of costumers. 9. THE MARKET INTELLIGENCE FUNCTION is the job of collecting, and disseminating the large variety of data necessary to the smooth operation of the marketing processes. Efficient marketing cannot operate in an information vacuum. Adequate storage programs, an efficient transportation service, and an adequate standardization program all depend to a considerable extent on good information.

12. III. THE INSTITUTIONAL APPROACH • This analysis is to study the various agencies and business structures that perform the marketing processes. The institutional approach attempts to answer the question of “who”. • In this approach the human element receives primary emphasis.

13. The Classification of Marketing 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. They may operate as individuals proprietors, partnerships, or cooperative or noncooperative corporations.

14. Merchant Middlemen 1. Retailers 2. Wholesalers • Agent Middlemen 1. Brokers 2. Commision men • Speculative middlemen • Processors and manufacturers ex: Perusahaan penggilingan padi E. Facilitative organizations ex: pasar lelang ikan F. Trade Associations ex: AEKI (Asosiasi Ekspor Kopi Indonesia), ICO (International Coffe Agreement)

15. IV. MARKETING EFFICIENCY APPROACH • Marketing efficiency approach is the most frequently used measure of market performance. • Efficiency is measured as a ratio of output to input. Student efficiency might be masured by grade level attained per hour study. • Penyebab ketidakefesienan pemasaran : • Panjangnya saluran pemasaran • Tingginya biaya pemasaran • Kegagalan pasar (market failure)

16. Marketing of agricultural product can be viewed as an input-output system. Marketing input incleudes the resources (labor, packaging, machinery, energy, and so forth) necessary to perform the marketing fuctions. • Marketing output includes time, form, place, and the possession utilities that provide satisfaction to consumers. • Efficient marketing is the maximization of this input-output ratio. • The marketing efficiency ratio can be increased in two ways: 1. Operational Efficiency 2. Price Efficiency

17. V. MARKETING STRUCTURE, CONDUCT, AND PERFORMANCE APPROACH • Struktur Pasar (market structure) mempengaruhi bagaimana perusahaan bertingkah laku di pasar (market conduct) • Tingkah laku di pasar (market conduct) akan mempengaruhi penampilan pasar (market performance) dari suatu industri

18. THE MODELS OF MARKETING STRUCTURE, CONDUCT, AND PERFORMANCE Market Structure • Tingkat konsentrasi pembeli dan penjual • Tingkat defferensiasi product • Barriers to entry • Tingkat pengetahuan pasar • Tingkat integrasi dan diversifikasi Market Conduct Market Performance • Aliran produk • Kelembagaan • Exchange function • Physical function • standardization Pricing eficiency Marketing cost, margins net profit Progresiveness, dll Anindita (2004)

19. VI. Marketing Management APPROACH CORPORATE PROCESS ORGANIZATION IMPLE MENT ING DEVE LOPING PROGRAMMES CONSUMER SATISFACTION AND BENEFIT