Ag Marketing Chapter 2 HW 2-1

The functional approach breaks down system in terms of?
what is done
What are the 3 major groups of functions?
1) Exchange
2) Physical
3) Facilitating
What are the 2 broad classifications of risks in the marketing system?
1) Physical Risk
2) Marketing Risk
What is a physical risk?
Occurs from destruction or deterioration of the product itself by fire, accident, wind, earthquake, or other means
What is a marketing risk?
Occurs because of changes in value of a product as it is marketed
The institutional approach breaks down the marketing system in terms of?
Who does things
What are the 5 major categories of institutions in the marketing systems?
1) Merchant Middlemen
2) Agent Middlemen
3) Speculative Middlemen
4) Processor Middlemen
5) Facilitative Organizations
What are the 2 groups of Agent Middlemen?
1) Commission men
2) Brokers
What is the difference between Commission men and Brokers?
Commission men take over the physical handling of the product while Brokers do not have physical control of the product
What is true of food marketing functions?
They add value to farm products
What marketing function is caused by food price variability?
Risk bearing
In which market does the farmer perform the most marketing functions?
U-pick operations (or farm roadside markets)
True/False- Middlemen exist in the food marketing system will cause high food price and lower efficiency
True/False- Agent middlemen recieve income from fees and commissions
True/False- Functional approach can help managers to understand the difference in marketing costs of various commodities
True/False- In general, the more and/or more complex functions performed, the greater the cost of marketing
True/False- Functional approach can help improve the performance of the marketing machinery

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