AGBU 2385 SHSU

Wholesalers:

Import/Exporters, Agents, brokers, chainstore warehouses, merchant wholesalers

Job of a Wholesaler:

efficiently assemble various products in reasonable quantities from the shipping point firms and processors, and sell them in smaller quantities to retailers (or other wholesalers)

Merchant Wholesalers

buy, sell, and store groceries and preform numerous other marketing functions

what are the 2 types of merchant wholesalers?

General line and Specialty line

General line

handle wide variety of food and nonfood products

Specialty line

mainly meat, produce, dairy, and poultry

Manufacturers sales and brokers

Extensions of food processing firms marketing activities to the wholesale level, they are owned and operated by food manufacturers that preform storage, selling, transportation, and intelligence marketing functions

Wholesale Agents and Brokers

Preform wide variety of sales related marketing for their client, usually used by smaller retailers, common in fresh produce

Who are retailers?

Supermarkets, Buying Clubs, and Specialized food stores (butcher and bakery)

Characteristics of retailers

food service, (restaurants, institutions, and plants, offices, and caterers)

Non traditional- vending machines, gas stations, and in store sales

market basket pricing

different stores have different prices on each item, similar for comparable stores.

variable price marketing

frequent price specials to get consumers attention to differentiate between stores

everyday low pricing

maintain low prices in the store on every item year round

Food Shopping Trade-offs

shopping time vs. price

Quality vs. price

brand loyalty vs. price

service vs. price

travel time vs. price

variety vs. time spent in store

Types of competition

1. Product Competition

2. Firm Competition

3. Brand competition

4. interegional competition

5. International Competition

6. Institutional Competition

7.Functional Competition

Perfect Competition

1. large number of buyers and sellers, no one of which is large enough to influence price through its actions alone

2. No product differentiation

3. Firms are free to enter or leave the market without facing any obstacles

Monopolistic Competition

Lies between perfect competition and oligopoly

and seeks to make the product different

Vertical Marketing Coordination

the process of directing and harmonizing the several interrelated and sequential decisions involved in efficiency producing the nations food supply

why is the vertical market coordination critical to the food market?

1. length of marketing channels

2. large # of specialized firms involved

3. Uncertainty of prices

4. Uncertainty of supplies

5. Uncertainty of quality of products

6. The urgency of marketing perishable products

Decentralized food markets

major structural change that has occurred since the early 20th century - farm products move from farms to the hands of the processors and wholesalers without utilizing the utilities and the services of the traditional central markets

Buyers also go to the product instead of the other way around

EX: Car dealership

Centralized Markets

often located at the terminal markets- easier to preform marketing functions like exchange

Sellers go to the buyers

EX: Sale Barn

impacts of decentralization

increased operational efficiency

imporved product quality

farmers preform more marketing functions

what is a thin market?

market with a low volume

few buyers and sellers: imperfect competition

price subject to manipulation

what's a cooperative?

A legal, institutionalized entity that permits group action that can compete within the framework of other types of business organizations

Types of marketing co-ops?

1. Marketing co-op

2. Purchasing co-op

3. service co-op

4. processing co-op

marketing co-op

sells farmers products

purchasing co-ops

sells supplies to farmers

service co-ops

provides members with improved services or services that couldn't obtain otherwise obtain

processing co-ops

packs or processes the farmers product

3 groups that are involved with the management

members

directors

managers

problems with co-ops

producers are sometimes not happy having an equal vote when they produce more than a smaller producer