Transaction Process Free Essay Example

In the creation of value for coconut which is an agricultural commodity, the farmers, intermediaries and final consumer must take part in a process which is termed the “Transaction Process” where the commodity is moved across separate interface. For this process to be efficient and add the kind of value the actors expected in the distribution channels they must have the same information about the commodity, its marketability in the marketplace and the delivery mode to its channel members (Green, 2015).

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In the “Guyana Coconut Industry Development Roadmap (2016)” Coconut marketing in the Pomeroon followed a similar pattern where the farmers interchange the commodity with the buyers/resellers (wholesalers, agroprocessors or exporters) in return for cash or agricultural input suppliers for its coconut grove.

The infrastructural support plays a facilitating role in moving the coconut raw material from the farmers to the end-users. The boat and road transportation, carries the consignment to the manufacturers, the financial and loan institutions provide credits to the buyers so that the operation and be facilitated.

The insurance companies provide the manufacturers and exporters with the insurance coverage to cover theft, damages or loss through unforeseen risk in exporting to foreign markets. More so, marketing firms plays a key role in identifying feedstock (base) (raw material suppliers), markets, target customers and consumption patterns. As a whole these interface, work in conjunction with each other to add value from its raw material base to its processing or manufacturing based to its end-users.

The marketing channels/supply channel in which the products are transferred incurred high transaction cost, poor market linkages across the regions and a fragmented supply chain that is highly risky in the case of large shipments of coconuts overseas.

According to Mahoney’s (1992) these factors may cause actors to vertically integrate their businesses, especially, if the market uncertainly as it relates to uncoordinated markets beset by input supply, output demand and volume (sales growth) poses high risk since these negatively affect they channels members cash flows.

In the academic review of Shashikumar et al (2014) he posits that tcoconut producers uses many different market channels to make the commodity available to end-users. These 6 main market channels are (a) Coconut Producer – Village Trader/Vendor, (b) Coconut Producer – Contractor – Village trader/Vendor – Consumer (c) Coconut Producer – Wholesaler – Retailers – Consumers (d) Coconut Producer – Commission Agent – Wholesaler – Retailers – Consumers (e) Coconut Producer – Agroprocessors – Wholesaler – Retailers – Consumers and (f) Coconut Producer – Contractor – Agroprocessors – Wholesaler – Retailers – Consumers. In comparison to the study conducted by Kumar et al (2017), in the Raigad District, his findings revealed a similar marketing channels and system for the coconut raw material supplied to the end-users (Kumar, 2017). Ambagan (2009) in his report “Development of a Coconut Water Processing Plant – Market and Technical Feasibility” points out to a similar marketing network that is used for the selling and distribution of the coconut products in Guyana to local sellers, agroprocesors and exporters. All the market channels are almost identical to what Shashikumar & Kumar posits in their research findings in the Tumkur and Raigad District. More so, there is limited research in the areas of marketing channels for coconut and why buyers and sellers select the different intermediaries.