Ag business chapter 3
4 utilities
form utility place utility time utility possession utility
prerequisites of an efficient economic system
free market economy prices reflect the full value of resources high degree of interaction between consumers and producers
ownership separation
inability to transfer ownership
grades and standards function overcomes
information separation barrier
marketing information function overcomes
information separation barrier by disseminating information that could influence the buying and selling of products
information separation
lack of information about the product
fewer suplliers means
less efficiency consumers face higher prices
producers
maximize long term profits by specializing int he production of few goods and services
consumer
maximize satisfaction through the consumption of preferred goods and services
who performs the 9 functions
middlemen
structure-conduct-performance model
model based on the way firms are organized in a market evaluation method
buying and selling function overcome what
ownership barrier
value separation
product is not in the form that consumers desire
space separation
product is not where consumers need it
time serparation
product not available when its desired
The role of marketing
provides an overwhelming assortment of food and fiber products that meet consumer needs at the lowest prices
transportation function overcomes
separation of space barrier
storage function overcomes
separation of time barrier maintain condition of product between production and sale
risk taking function overcomes
time separation barrier assumes physical and price risks between purchase and sale
structure
to be fair and efficient markets must have: sufficient # of firms few barriers firms that differientiate
the mission of marketing
to bridge the gap between the conflicting needs of producers and consumers by completing the production process
processing function overcomes
value separation barrier transforms commodities into a form with greater consumer value
financing function overcomes
value, time and space barrier
9 marketing functions to overcome the barriers
1. buying function 2. selling function 3. storage function 4. transportation function 5. processing funciton 6. grades and standards function 7. financing function 8. risk-taking function 9. marketing information function
how to evaluate performance
1. efficiency- how well goods and services flow from producers to consumers 2. fairness- how well the market meets the needs of consumers
five barriers of consumer satisfaction
1. ownership separation 2. time separation 3. space separation 4. value separation 5. information separation
evolution of marketing system
1. specialization and trade 2. central markets 3. money 4. middlemen
consumers show how they feel by
1. voting with dollars in the marketplace 2. expressing their opinions through political action
5 key marketing questions
1. what 2. how 3. when 4. who should produce it 5. who are the consumers
performance
4 criteria 1. optimum output and minimum cost 2. reasonable profits given risk, management, skill, product development 3. innovations and imrovements 4. reasonable levels of investment and R&D
economics
allocation of resources
conduct
conduct enhances firms ability to maximize its long term profits large number of firms no unfair trade practices truthful claims
