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MARKETING CO-OPERATIVES A marketing cooperative is set up in order to market and sell the surplus produce of its members, being

such a surplus, as they cannot consume themselves. Marketing cooperatives generally sell agricultural produce, but there are also those, which sell fish produce or handicrafts. There are also other definitions of cooperative marketing. Margaret Digby defines a marketing cooperative as a system in which a group of farmers join together in order to carry out part or all of the processes involved in bringing the produce from the producer to the consumer.TheBank of India defines a marketing cooperative as a society of farmers, organized for the purpose of helping the members to market their produce, so as to obtain higher profits than is possible by way of private marketing. Source of Finance Marketing societies raise their finance by Issuing Shares The State Govt. purchases half the number of shares. Raising Loans Loans are raised from The Central Co-operative Bank The National Co-operative Development Corporation The National Agricultural Co-operative Marketing Federation The State Bank of India The Marketing Board

Objective To secure best possible market price for members products To reduce the cost of marketing To act as a powerful check upon the monopolistic power To save farmers from exploitation

Protection of consumers interest

Need and Importance


Abolition of Middlemen Collective Bargaining Storage Facility Standardization and Grading Higher prices to members Large and wide Infrastructure Supply inputs & Consumer goods Relief from illegal deduction

Failure [Problems] of Marketing Cooperatives


They do not have sufficient storage space. The loaning policy has been faulty. Their operational costs are high. Their staffs are untrained. The operations of marketing cooperatives are not satisfactory.

Reasons behind Failure


The Farmers are indifferent to Co-operatives & traders and other acquire the membership. Marketing co-operatives do not have a well thought out programme of action in regard to the conduct of different marketing activities. There is no proper link between Primary Marketing Co-operatives and State Marketing Federation, Primary Marketing Societies and Primary Credit Societies. The managing committees of most marketing societies do not take keen interest in conduct of their business. The marketing societies provide only few marketing services such as processing, to the farmers. Marketing societies suffer from lack of sufficient working capital. Unhealthy competition with credit societies. Inefficient supervisory machinery. Measures for Improvement Effective relationship between marketing and credit societies. Primary Marketing Societies should be member of the State Marketing Federation. The marketing societies must work out the detailed plans best suited to their local conditions. The management committee should be wisely elected to ensure effective functioning. The Central and State Government must help the societies to build proper storage places.

Grading and standardization must be done by experts hired by marketing society. The Government must offer adequate financial assistance to marketing societies. FACTORS REQUIRED FOR IMPROVING THE WORKING OF CO-OPERATIVE MARKETING SOCIETIES

For removing unnecessary & unhealthy competition between marketing & credit societies an effective relationship must be established. All the primary marketing societies should be members of the state marketing federation so that they may avail of the specific facilities provided by the apex organization. Marketing societies must use the expert options for grading, standardization, etc. so that it will create confidence among members. The government must provide adequate finance for meeting working capital & permanent capital. The working of management committee should be boosted so that it will increase the efficiency. The government both Central & State must help the societies in an effective manner to build proper storage places. The societies should develop to offer new services to its members. The marketing federation should develop a clear cut strategy for the development of its member societies. The co-operative principle should be widely published among the farmers.

Cooperative Marketing Strategy


Marketing is an organizational as well as a set of processes aimed at creating, communicating and delivering value to customers and for managing customer relations in ways that benefit both the organization, its customers as well as its numerous stakeholders. Coping with marketing exchange processes calls for a considerable amount of work and skills. Marketing is a Management function. It is an area that requires considerable efforts to develop in the cooperative sector. Different markets require specific marketing strategy options such as 1. Direct Consumer Marketing:Under this category, much of the strength lies on a very strong brand, superior products, higher quality packaging, as well as ensuring continuous availability and very strong presence. This is relatively low key in cooperatives as the focus is mainly on bulking undifferentiated products which are bulky and raw. There is limited research and development, limited investment in value addition in the sector. On the other hand, there are vast potentials for market development and access. Under this strategy, the ministry in collaboration with cooperative societies should upscale and promote direct consumer marketing in the sector in order to increase the market share of the cooperative produced products. Information on what is available and needed needs to be collected, packaged and disseminated at all levels. 2. Business Marketing:Business to Business dealing usually involves well trained and well informed professional buyers on either side who seek to get either high value or lower costs for their respective organizations. This is weak in cooperatives as few cooperatives have embraced effective marketing in their organizations. Under this Strategy, the ministry and cooperatives need to engage the services of well trained marketing personnel and also embark on human resource development and provision of Business Development Services (BDS). There is great demand for high quality produce and commodities by manufacturers

and processors in the food industry, which cooperatives can take advantage of through outsourcing, contracts, joint ventures and partnerships. The Ministry should provide policy guidelines, promote and support functional marketing departments in the Cooperatives, commencing with itself. 3. Global Markets:Organizations selling in the global Marketplace face additional risks and challenges. They must decide which countries to enter, how to enter each country, either as exporters, licensers, joint venture partners, contract manufacturing or sole manufacturers. It also entails knowledge on pricing for products in different countries and how to communicate. The penetration of cooperatives in this market is currently minimal. There is limited information on global, emerging markets, certification and trade requirements. The Ministry should work very closely with other key government ministries particularly the Ministry of Trade, Ministry of Agriculture, Kenya Missions and Foreign Embassies represented in the country so as to establish the potential and develop linkages in niche markets for niche products. Few cooperatives have ventured into Fair Trade, Organic marketing and emerging new markets. 4. Marketplaces and Market-spaces:Marketplace is physical, such as a shop or a departmental store. When compared to other private business enterprises and a few agricultural cooperatives with stores for resale of farm inputs, cooperative business facilities are not cut out for marketplaces and market spaces. The presence of cooperative products on the shelves in super and hyper markets is currently low. There is need to develop linkages with the marketing chain and industry players for space hire and franchising of products and services to enhance cooperative presence and ownership of cooperative brands. In market-spaces, the internet is a virtual shop. These are emerging innovative markets that are fast developing and driven by technological development. Online marketing is currently operating in very few cooperatives. In this Marketing Strategy, the focus should be responding to consumer needs, wants and demands through market positioning, market segmentation, target marketing, coupled with properly linked communication and distribution channels. E-Commerce is another opportunity which cooperatives need to explore.

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