Livestock Economics, Marketing and Business Management

BUYING AND SELLING

PHYSICAL FUNCTIONS-GRADING, TRANSPORTATION,STORAGE AND WAREHOUSING

Buying and Selling

• Buying and selling are the complimentary functions, around which all marketing efforts revolve and they are basic to the entire marketing process and these two are known as exchange functions which are involved in the transfer of ownership of goods.

Physical functions

• Standardizing
• Grading
• Transport
• Storage and
• Risk bearing

• These are essential to the main functions of marketing (Assembling, Processing and Dispersion).
• Standardizing and Grading imply setting up of the basic measures which the goods must conform.
• A standard specifies what basic quality a product must have to be consistent with the established characteristics.
• Standards are set with regard to the shape, size, colour, flavour, composition, weight etc.

Grading

• Grading is the act of separating goods into different lots according to established specifications.
• Purpose of grading is to establish a common language easily understood by buyers and sellers as the basis of judging the quality of the product in relation to its price.
• Grading and standardization also help to cater to the special tastes and liking of different section of buyers.

Transport

• It is one of the most important functions of the modern marketing system. This function is primarily concerned with making goods available at the proper place resulting in creating place utility of the products.
• Transportation  is necessary not only to provide the goods to the consumers in time, but also to find remunerative markets at far away places.
• An efficient transport system enables the goods to reach the markets far and wide without losing the precious time.
• Special type of transport is highly essential for the transportation of livestock products.
• E.g. Refrigeration facility is essential for the transportation of milk and meat.

Storage

• It is the process of holding and preserving goods. Storage creates time utility whereby goods are made more useful.
• Farm products are stored to make them available throughout the year to balance the periods of plenty and periods of scarcity.
• Reasons for storing farm products:
  • To even out the seasonal fluctuation in production
  • To lengthen the shelf life of the farm products which are mostly perishable
  • To improve the quality as well as the value of the products.