Marketing Arrangement is a unit of Competency in that provides farmers how to sell their products in the market.

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MARKETING
ARRANGEMENTS

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an agreement between a seller
and a buyer or between sellers
about some aspect of the sale
of products

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 Establishment of a network of depots and buying centres
 Staff positioned at these depots should be well trained in grading
procedures, and closely monitored
 Grading standards should be clear and transparent (visual aids)
 Farmers need to be well trained in grading of the produce Pricing
Mechanisms
 Expectations for minimum pre-planting price often unrealistic
 Relationship to international market prices often not understood
 Uncertainty about price levels leads to mistrust and feeling of exploitation
 Development of transparent pricing systems important to alleviate
constraints

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Types of Marketing Arrangements
1. Spot market transactions:
This is the informal marketing pathway consisting of many
intermediaries and where local assemblers, brokers and traders are
the main buyers from small scale farmers. The market participants are
either individuals or very small firms (i.e. they are atomistic).
– no personal relationships are developed.
– does not have to be a physical marketplace
– most transactions are very small and executed “on the spot”
– transaction is in three phases (contact, contract and control) are
executed immediately.
The trader will contact the farmer (or vice versa), inspect her products,
negotiate a price, seal the deal, pay and collect the products all within
a few hours or less. In such a pure form of market transaction,
transaction costs are very low for both parties

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Two Types of Marketing Arrangements
2. Contract farming:
An agreement between farmers (producers) and processing and/or
marketing firms for the production and supply of agricultural products
under forward agreements, frequently at predetermined prices.
The agreement often includes the following:
– provision of production support by the buyer (the processing and/or
marketing firm) to the producer,
– technical assistance.
The basis of a contract farming arrangement is a commitment on the part
of the farmer to provide a specific commodity in quantities and at quality
standards determined by the buyer and a commitment on the part of the
buyer to support the farmer’s production and to purchase the commodity.
This is one of the methods to strengthen vertical coordination in the agri-
food chain

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Two Types of Marketing Arrangements
3. Collective action:
In this arrangement, smallholders market farm produce
through farmer organizations, contract farming or out grower
schemes to formal institutions.
It is a vertically coordinated chain relationship in which large
buyers such as Wholesalers, Supermarkets, Schools,
Hospitals, Exporters, Relief agencies enter into formal or
informal agreement.

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Key Functions Performed in Marketing
Arrangements
Marketing Communications
• Advertising the Product
• Providing P-O-P (Point of Purchase) Displays
i.e signage, standalone displays, aisle fixtures, and banners
• Providing a salesforce that offers information & service to customers
Inventory Management
• Ordering appropriate merchandise assortment
• Maintaining adequate stock to meet customer demand
• Storing merchandise in an appropriate facility
Physical Distribution
• Delivering products
• Coordinating delivery schedules to meet customer expectations
• Arranging for the return of defective merchandise

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Key Functions Performed in Marketing
Arrangements
Market Feedback
• Serving on manufacturer advisory boards
• Informing other channel members of competitive
activity
• Participating in test market evaluations
Financial Risk
• Offering credit
• Managing risks related to product loss or deterioration
• Managing risks related to product safety and liability

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Contributions of Intermediaries
• Provide Economic Value
• Provide Social Value
• Provide Marketing Support
• Impact Supply-chain Management
• Add Value to the Market Offering

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