問題一覧
1
value of a product in terms of pesos or centavos
Price
2
Role of price (5)
*Basis of producers on what and how much to produce *Ration or allocate productive resources *Basis of the proper combination of resources *Guide the product through the marketing channel *Basis of distribution of goods
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FACTORS WHICH CAUSES PRICE FLUCTUATIONS
*Fluctuations in demand *Fluctuations in supply *Experimentation in the price discovery process
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TYPES OF PRICE FLUCTUATIONS (5)
*Seasonal price variation *Annual price variation *Trends *Cyclical price variation *Random or Irregular movement
5
follow a more or less the some pattern within a year and always conform to this pottern over a period of years
Seasonal price variation
6
Causes due to weather condition
Annual price variation
7
associated with general Inflation and deflation in the economic factors specific to agricultural products
Trends
8
fluctuation is in regular pattern
Cyclical price variation
9
unexpected and unpredictable shift in prices
Random or Irregular movement
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discovering price which will clear the market through the negotiation of the buyer and seller
Price mechanism or Price discovery
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simple negotiation of Individual buyer and seller. No formal rules to follow. the seller tries to get the highest possible price while the buyer tries to get the lowest possible price.
Individual Negotiation
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CATEGORIES OF PRICE MECHANISM (4)
*Individual Negotiation *Organized Market *Administered Prices *Collective Bargaining
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ORGANIZED MARKET: (3)
*Commodity exchange *Auction markets *Terminal livestock market
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provides site for trading to take place under a specified rule
Commodity exchange
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actual trading of commodities through samples
spot or cash market
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specify minimum grade, quality of products to be delivered at some future dates
future contracts
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for products which are difficult to standardized - actual inspection of the product - prices determined through bidding
Auction market
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producers consign their animals to commission firms or terminals. Commission agent will negotiate the sale
Terminal livestock market
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price is administratively determined by the government ex. Price ceiling, floor price
Administered Prices
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producers form bargaining associations to bargain a higher price ex. Cooperative, farmers association
Collective Bargaining
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use when the manufacturers wants to get the highest possible price of the product in the short run.
Skimming the market
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prices are set at a relatively high level till the market is saturated
Moving down the demand curve
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use for product with high degree of elasticity of demand
Penetration pricing
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set the price of the product so low to discourage competitors
Pre-emptive pricing
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set price based from variable cost to kill the competition with weak financial condition
Extinction pricing
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used by wholesalers
Formula pricing
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use when there is a large volume of less desirable products
Tie-pricing
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set price near or equal with others
Competitive pricing
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appeal to psychological frame up Odd centavo pricing-give appearance of price cut- for low quality products Even centavo pricing- premium pricing-for good quality products
Psychological pricing
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use to gain volume - pricing in units of two or more ex. 3 for 100
Unit pricing
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offering 2 or more classes of the same product at different price. Small, Medium, Large
Price lining
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inter-organizational system made up of a set of interdependent institutions and agencies involved in moving the product from the point of production to the point of consumption
Marketing channels
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• Producer - Assembler wholesaler - wholesale retailer consumer
Long and Wide
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Producer retailer consumer Producer-consumer
Short and Wide
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FACTORS TO CONSIDER IN CHOOSING A MARKETING CHANNELS (2)
*Nature of the product *Nature of the market
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NATURE OF THE PRODUCT: (3)
*Perishability *Unit value *Newness of the product
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Must be short channel
Perishability
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high value short channel low value needs to be sold In volume-long channel
Unit value
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needs middlemen for promotion and selling
Newness of the product
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NATURE OF THE MARKET
*Consumer buying habits *Size or Average sale *Total sales volume *Concentration of purchase *Seasonality of sales
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convenience goods - needs intermediaries shopping goods - direct
Consumer buying habits
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small average sale - needs channel large average sale - direct selling
Size or average sale
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contract is made before the product is harvested, harvesting will be done by the buyer
Contract buyers
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merchant middlemen who sells to retailers
Wholesalers
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act as negotiator for middlemen. Paid in commission basis
Commission Agent
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buys product in large quantities for other wholesalers. They sell to retailers on wholesale basis and also retail to consumers
Wholesaler-retailer
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buy from producers and contract buyer -assembles the product and transport them to market -sell on wholesale basis
Asembler-wholesaler(viajeros)
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Buys live poultry and livestock and sell them as dressed or carcass selling in retail
Butcher Retailer
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-last link of the marketing channel -sells to consumer
Retailer
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-the sorting of products into lots and units according to one or more of their quality attributes
GRADING
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making the quality specifications of grades uniform among buyers and sellers across location and time
STANDARDIZATION
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Pricing efficiency (5)
*Increase the meaning of price quotation *Increase the precision of price formation *Increase the level of competition *Systematic allocation of products in the market *Facilitates the collection of reliable information
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Advantages of standardization (2ans)
*pricing efficiency *operational efficiency
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Operational efficiency (6)
*Limits time bargaining about quality and price *Increase the ability to buy and sell on the basis of description *Specialization of marketing function *Optimum movements of farm products *Decrease expensive promotional costs *Increase the use of new technologies
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Criteria for good standards (4ans)
Should be built on characteristics which are important to the consumers Should be built on factors which can be accurately and uniformly measured and interpreted Should use factors and terminology that will make the grades meaningful Should include enough of the average production
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Problems in developing standards (4ans)
*Number of grades of classes *Grade terminology *Quality deterioration *Relevant quality characteristics
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Primary concern of transportation
1.Costs 2. Time
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FACTORS AFFECTING THE CHOICE OF TRANSPORTATION: (4ans)
*Location of the product *Market area served *Form of product marketed *Size and quality of products marketed
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WHO PAYS THE TRANSPORTATION COSTS?
Depends on the elasticities of the product If D is more inelastic than S - buyer bear the greater part of the transport costs If D is more elastic than S seller will bear the greater part of the transport costs If D and S have the same elasticity buyer and seller have equal share of the transport cost
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Operation of storage (2ans)
*Storage to equalize seasonal-production to the pattern of demand. *Storage at all times within trade channels to keep marketing system operations without interruption
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Objects of storage (4ans)
*Balance supply and consumption during period of plenty and period of scarcity *To maintain a reasonable stable price for the *producers, middlemen and the consumers *To make products available at all times. To bring the product from the farm to the market *Prolong the shelf life of the product
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Place of Storage (5ans)
*Farm *Marketing channels *Terminal markets *Cold storage *Consuming areas
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Cost of physical facilities (6ans)
Repairs and maintenance Depreciation Insurance against loss Handling fee Electric Rent for equipment
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Interest on capital Costs of quality deterioration (2)
a. Shrinkage b. Insect damage
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Risk of Storage
Physical risk Market risk
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Purpose of Food Advertising (2)
*To inform customers what is available for sale *To change the demand of the product
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PROBLEMS IN ADVERTISING FOOD PRODUCTS: (6)
*Agricultural products needs processing thereby losing their identity *Extremely perishable *Demand is relatively inelastic *Food products are consumed in volume *Competition in food products is in price not emotion *Lack of funds