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Marketing Quiz 3
| Question | Answer |
|---|---|
| Commodities trading (buying/selling)are frequently done on___ ____ ____ rather than inspection | basis of description |
| Descriptive trade terms are widely understood and accepted, but ___. | Subjective |
| Misunderstandings are less likely when ___ ___ sort, describe, and certify products. | third parties |
| The sum of the attributes of a commodity that influence its acceptability and value to buyers and thus the price they are willing to pay for it. | Quality |
| Dividing a commodity into classes according to a set of criteria | Grading |
| Grading is typically ___. | Voluntary |
| In the short run, ___ is sorting | Grading |
| Set of firms that move a commodity from the farm to the consumer | Marketing Channel Stages |
| One component of marketing efficiency; a measure of how adequately market prices reflect production and marketing costs throughout the total marketing system; different prices for different qualities | Pricing efficiency |
| A measure of marketing system productivity; the raw ratio of marketing output to marketing input; the flow of the product through the marketing chain | Operational efficiency |
| Grading Contributions to Pricing Efficiency | Increases recognition of value differences; better allocates according to demand; improves market news; facilitates futures trading; broadens the market |
| Grading Contributions to Operational Efficiency | Saves time for commercial traders; saves time for consumers; saves time for lenders; permits mixing of separately owned commodities in storage and pooled sales |
| Buyers agree on the ordinal relationships of the various qualities of a commodity (e.g. milk) | Homogeneous Demand |
| Two or more groups of buyers give different rankings to various qualities (e.g. mean beef vs. fatty beef) | Heterogeneous Demand |
| Who offers grading? | Agricultural and Marketing Service (AMS) of the USDA |
| Pooling of grains can raise (or lower) ___ ____. | average grades |
| Grade may ___ during shipment, loading, or unloading. | Decline |
| Meat ___ is required for health and safety purposes. | Inspection |
| Meat ___ is voluntary for marketing purposes. | Grading |
| Who administers meat inspection? | Food Safety and Inspection Service (FSIS) |
| Meat entering interstate commerce must be ___ inspected. | Federally |
| Inspection takes place at ___ step. | every |
| In meat grading, both ___ and ___ grades are used. | Quality and Yield |
| Quality meat grades are assigned on the basis of ___ and ___. | Marbling and Maturity |
| Fat flecks or streaks in the lean | Marbling |
| Hog grades are primarily ___ grades. | Yield |
| New standards of hog grades adopted in 1984 reflect an ___ in leanness. | increase |
| Four principal lean hog cuts: | Ham, loin, picnic shoulder, Boston butt |
| Fruit and vegetable grades are used mainly within ___ and not at ____. | trading;retail |
| Grading is a ____ system supported by producers/industry. | Voluntary |
| Grading is done by an ___ third party. | Unbiased |
| Examples of organized markets: | Livestock auctions; fruit and vegetable terminal markets; futures markets (commodity exchanges) |
| Usually run by third parties who are not controlled by farmers or agribusiness buyers | Organized Markets |
| "Collective bargaining"; common in fruits, vegetables, nuts, and milk marketing orders; negotiated high prices can lead to expansion and lower prices in the long run | Group Negotiation |
| Any price discovery system outside of organized markets in which a buyer and seller as individuals negotiate a transaction; private treaty; formula pricing | Decentralized Individual Negotiation (DIN) |
| Price-Setting Systems: | Firm Price Making; Group Negotiation; Government price setting |
| More likely for differentiated products; relates to firms in monopolistic competition; prices tend to be more stable | Price making by individual firms |
| The only one part of total transaction or exchange arrangements | Pricing |
| Production contract; procurement contract | Vertical Integration Marketing |
| Firm ownership of contiguous stages in the marketing channel, a firm that owns two or more levels of production or marketing; production contracts | Vertical Integration |
| Normally delivery occurs more than ten days away from selling; written ; used frequently between retail chains and produce suppliers | Marketing-Procurement Contract |
| Involves the buyer in the physical production process. The farmer takes responsibility for caring for broilers, turkeys, hogs owned by a contractor | Production Contract |
| Why should agribusinesses vertically integrate? | Market power; savings through increased efficiency; control product quality; efficient flow of product; coordination of production and processing; market security |
| Why should farmers contract? | Separate the pricing decision from the time of delivery; price risk can be transferred to the contractor; access to market |
| Marketing-pricing alternatives for farmers: | M-P contract at fixed price and delivery at harvest; price fixed in futures and delivered at harvest; price fixed in futures but stored at harvest; price cash and delivery at harvest; store on the farm and sell cash; store elevator and wait |
| Marketing-Pricing depends on: | current and expected prices; storage and availability; risk aversion; transaction costs; financial situation |
Created by:
ellenc6
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