Storage in Marketing

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Questions and Answers

What is one of the main objectives of storage in marketing?

To reduce production size
To eliminate all storage costs
To increase the seasonal fluctuation of prices
To maintain reasonable stable prices (correct)

Storage is less important for products that are harvested and marketed throughout the year.

True (A)

Name one place where storage can occur.

Farm, marketing channels, terminal markets, cold storage, or consuming areas.

The costs of storage include repairs and maintenance, insurance against loss, and ___.

<p>handling fee</p> Signup and view all the answers

Match the following storage risks with their descriptions:

<p>Physical risk = Loss of product due to environmental factors Market risk = Fluctuations in market prices affecting profitability</p> Signup and view all the answers

Flashcards

Storage's Role in Marketing

Storage equalizes seasonal production with demand, ensuring smooth marketing operations.

Storage Objectives (general)

Balancing supply and demand during times of abundance and scarcity.

Storage Cost Components

Storage costs include physical facility expenses (e.g., repairs, depreciation, insurance), interest on capital, and quality deterioration costs (e.g., shrinkage, insect damage).

Optimal Storage for Products

Storage is crucial for products with short harvest-to-market time frames; less important for year-round products.

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Storage Locations

Storage happens at farms, within marketing channels, terminal markets, cold storage, and consuming areas.

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Study Notes

Storage: The Time Dimension of Marketing

Storage equalizes seasonal production to demand patterns
Storage maintains uninterrupted trade channels
Storage objectives include balancing supply and consumption during periods of high and low supply
Specific objectives include maintaining stable prices for producers, middlemen, and consumers; ensuring product availability; transporting products from farms to markets; and extending product shelf life
Storage is crucial for crops harvested and marketed within a short timeframe, less important for crops produced and marketed year-round.
Storage locations include farms, marketing channels, terminal markets, cold storage facilities, and consumer areas
Storage costs include facility costs (repairs, maintenance, depreciation, insurance, handling fees), energy costs (electricity), equipment rental, and quality deterioration (shrinkage, insect damage)

Risks of Storage

Physical risks include insect damage
Market risks also impact storage

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Description

Explore the crucial role of storage in marketing and its impact on balancing supply and demand. Understand the objectives of storage, including price stability and product availability, along with the associated risks and costs. This quiz covers the time dimension of marketing within the storage context.