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## Marketing Efficiency

- Marketing efficiency is a measure of market performance. The movement of goods from producers to the ultimate consumers at the lowest possible cost consistent with the provision of service desired by the consumers is termed as efficient marketing.
- Efficiency of supply chain was calculated with the help of the following formula. The higher this ratio, higher would be the efficiency and vice versa. This can be expressed in the following form:
- The Calkin’s index of marketing efficiency is estimated using the following formula.
- The lower the value of the index, higher would be the efficiency.
- According to Acharya (2003), an ideal measure of marketing efficiency, particularly for comparing the efficiency of alternate markets channels should take into account all of the following:
- Further, the measure should reflect the following relationship between each of these variables and the marketing efficiency.
- As there is an exact relationship among four variables, i.e., a+b+c = d, any three of these could be used to arrive at a measure for comparing the marketing efficiency.
- The following measure is suggested by Acharya,
ESC = [(V/I)-1]
b) Calkin’s index Sum of profit or margin
Marketing efficiency= 1+ ( ---------------------------------- )
Sum of marketing cost a) Total marketing costs (MC)
b) Net marketing margin (MM) c) Prices received by the farmer (FP) d) Prices paid by the consumer (RP) i) Higher the (a), the lower the efficiency
ii) Higher the (b), the lower the efficiency iii) Higher the (c), the higher the efficiency iv) Higher the (d), the lower the efficiency ME = FP ÷ (MC + MM) |

Last modified: Tuesday, 19 June 2012, 6:05 AM