A study on the

marketing channels
involving in the egg
marketing

Submitted by
Silambarasan R
09MBAA50
 Introduction to the
study

 A marketing channel is a set of independent
organizations involved in the process of
making a product or service available for
use or consumption.


 “Intermediary” refers to any distribution

channel member located between the
supplier and the end user.

 Industry profile

 Poultry industry is one of the fast growing
agriculture sector.
 Namakkal industry places a significant role in
poultry industry.







 Necc is the deciding authority of egg price.
 Egg marketing

channels

CHANNEL 1 CHANNEL 2 CHANNEL 3

FARMERS FARMERS FARMERS

CBTS

BROKERS BROKERS

WHOLESALERS WHOLESALERS WHOLESALERS

RETAILORS RETAILORS RETAILORS

CONSUMERS CONSUMERS CONSUMERS

 Company profile

 Aishwarya group is being a leading name in poultry farming
in Namakkal.
 The concern owns about 70acres of farm land. It maintains a
turnover of 120crores per year
 Production rate is 2lack eggs/day and 70ton feeds/day.
 Sales rate is 4 lack eggs/day.
 Own transport.
 They use all those three channels to sell their produce.
 Especially as a cbts they are selling 2lack eggs per day.

 Need of the study

 the effective marketing channel is very
important For every commodity to reach
customers without any hurdles and
constrains. This study tends to identify the
cost effective marketing channel in poultry
industry at namakkal.

 Limitation

 The study is focused on nammakal district
only and its cannot be generalized to other
areas.


 There was limitation over time and resources.




 objective

Primary objective:
 To identify the marketing channel which makes
high profit margin to Aishwarya poultry,
namakkal.
Secondary objective:

 To understand the marketing channel systems

practice at poultry industry in namakkal.
 To identify the profit margin of every
intermediate in all channels
 To identify the production cost and marketing
cost in all channels.

 Research Methodology

Research Methodology
 The type of research used in this
project is a Descriptive research design.
Data collection

 The data given in this study are

collected from the poultry farms that are in
contract with the Aishwarya feeds, individual
marketing farms, brokers, wholesalers,
retailers, traders association and NECC,
Namakkal.

 Research methodology

Sample size
30 farmers

15wholesalers

30 brokers

Sampling design:
convenient sampling


Tool used:
Marketing efficiency:

MME = FP/(MC+MM)

Whereas,

MME = modified measures of marketing

efficiency
FP = price received by the farmers,

MC = total marketing cost

MM = marketing margin

 

Note: The cost of eggs considered in this study

is the average cost of 100 eggs in the month of

June, 2010.

 Cost incurred by farmers in channel1, channel2,
channel3


Various cost incurred by Channel 1 Channel 2 Channel 3
farmer

Production cost 225.00 225.00 246.00

transport cost 10.00 0 0
labour cost 2.20 1.00 1.00
damage cost 2.70 1.00 1.00
miscellaneous .10 0 0
Total cost 240.00 227.00 248.00
 Cost incurred by brokers in channel1, channel2,
channel3


Various cost incurred by Channel 1 Channel 2 Channel 3
broker

Purchase price 0 255.00 255.00

Transport cost 0 10.00 10.00

Labour cost 0 1.20 1.20
Damage cost 0 2.60 2.60
Miscellaneous 0 .10 .10
Total cost 0 268.90 268.90
Cost incurred by wholesaler in channle1,
channel2, channel3


Various cost incurred by Channel 1 Channel 2 Channel 3
wholesaler

Purchase price 270.00 275.00 275.00

transport cost 1.00 1.00 1.00

labour cost .30 .30 .30

damage cost .60 .60 .60

miscellaneous .10 .10 .10

Total cost 272.00 277.00 277.00

 Comparative Table All the cost incurred by channel partners in channel1, channel2, Channle3

S.No Particulars I II III 4 Broker’s purchase price 255.00 255.00

1 Farmer’s sale price 270.00 255.00 275.00 Cost incurred by Broker - -
2 Operation cost to the farmer (a)Transport cost - 10.00 10.00


(b)Labour cost - - -
(a)Production cost 225.00 225.00 246.00 i)Loading - - -
(b)Transport cost 10.00 - - ii)Unloading - 1.20 1.20
(c)Labour cost - - (c)Damage cost - 2.60 2.60
i)Loading 1.00 1.00 1.00 (d)Miscellaneous - .10 .10
ii)Unloading 1.20 - - Total cost - 13.90 13.90
(d)Damage cost 2.70 1.00 1.00 Absolute Margin of Brokers’ - 6.10 6.10
(e)miscellaneous .10 - -
Total cost 240.00 227.00 248.00 5 Wholesaler’s purchase price 270.00 275.00 275.00
Absolute Margin of Producers’ 30.00 28.00 27.00
Cost incurred by wholesaler - - -
3 CBT’s Purchase Price - - 275.00 (a)Transport cost 1.00 1.00 1.00
Cost incurred by PHC - - - (b)Labour cost .30 .30 .30
(a)Transport cost - - - (c)Damage cost .60 .60 .60
(b)Labour cost - - - (d)Miscellaneous .10 .10 .10
i)Loading - - - Total cost 2.00 2.00 2.00
ii)Unloading - - - Absolute Margin of WS 8.00 8.00 8.00
(c)Damage cost - - - 6 Retailer’s purchase price 280.00 285.00 285.00
(d)Miscellaneous - - - (a)Damage cost 0 0 0
Total cost - - 0 7 Margin of retailer 20 20 20
Absolute Margin of CBTs’ - - -20.00
Consumer purchase price 300.00 305.00 305.00
 
When consumer, purchases eggs directly from wholesaler, their purchasing cost is

Channel Consumer’s purchase price

I 290.00

II 300.00

III 300.00
Margin for channel partners in three different Channel systems


Particulars Channel I Channel II Channel III

Producers’ 30 28 27
margin
Cbts’ margin 0 0 -20

Brokers’ margin 0 6.10 6.10

Wholesalers’ margin 8 8 8

Retailers’ margin 20 20 20

Production cost 225 225 246

Marketing cost 17 17.80 17.80

Consumer price 300 305 305

 
Marketing efficiency:

Channels I II III

MME 90 83.6 82.9

 findings

 Transport cost is one of the major constraint to go for
direct marketing. But in channel 1 system profit margin
is very high including transport cost.
 the purchasing price of wholesaler from the farmers in
channel 2 and channel 3 is significantly high and it’s
results the price increasing in retail purchase price and
consumer purchase price .

 findings

 Identifying potential wholesalers is one of the
important constraint at channel 1 but when
they choose channel2 and channel 3 ,for
every 100 eggs the poultry loss 2 rupees in
their margin .it ‘s make huge impact when
the production is more than lacks of eggs
every day.
 To retain and maintain the customers the
Contract based traders may reduce their
egg price but they compensate with selling
feeds to the farmers.

 suggestions

 Transport cost considers as one of the major factor
for forgo channel 1 but it may recommend to go
for channel 1 system .Even we including the
transport cost the profit margin is
comparatively high in channel system
 Most of the farmers think finding and
communicating with the wholesalers are hectic
work .So they refused to go for channel1 but for
every 100 eggs the poultry loss Rs2 in their
margin when they go for channel 2 and channel
3. It’s made huge impact when the daily
turnover of poultry is more than lacks eggs. So
it’s wise to go for direct marketing.
 suggestions

 From contract based trader perspective, in
order to retain more formers, aishwarya
poultry may purchase the eggs with lower
margin even with minimum loss, because
they may compensate the same with selling
price of the feeds.
 The contract based traders perspective
aishwarya feeds may omit the layers of
intermediates between the aishwarya feeds
and wholesaler. If they are go by this its
makes their margin almost double

 conclusions

 From the above study, channel 1 is the most
cost effective channel system among three
channel systems practiced in Aishwarya
poultry. Even though the production rate is
high, It is strongly recommended to go for
channel 1 system because after the
constraints and struggles of retaining the
wholesalers in the initial stage the channel
1 system give more margin in long term
perspective.
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 


 Thank u