This module has outlined the importance of Prices and price mechanisms in the workings of a modern economy in terms of directing decision making in the allocation and distribution of the scarce resources to various production, marketing and consumption activities. Several approaches that may be used in the study of markets have been discussed. In the functional approach the key issues are whether the necessary number of functions is being performed, and whether these functions are being performed in the most efficient manner. Because the functions add value as well as cost to products simply minimizing the functions is not an acceptable goal. The rule is that additional functions and services should be performed until costs exceed the values of functions. It is important to determine when the shifting of a marketing function from one firm to another, or the combining of additional functions into one firm, is warranted. Some functions are most efficiently performed by specialized firms; others seem appropriately combined in multifunctional firms.

The commodity approach to marketing concentrates on a particular commodity such as maize and follows it through its various processing stages as each market function is performed by each institutional organization. It combines institutional and functional approaches in studying marketing of a single commodity. It helps focus attention on how physical differences of commodities contribute to different marketing costs. It is therefore more comprehensive since it tackles all issues relevant to the commodity from supply point to the end user point.

 The institutional approach considers the various kinds of marketing organizations and. Very often the ‘why’ of certain marketing practices must be answered in terms of the characteristics of who performs them. Such analysis has the advantage of preventing the personal aspects of marketing from being ignored. Attitudes towards change or improvement must often be examined in the light of characteristics of the various marketing institutions. Marketing institutions give voice to the marketing machinery. From them develop ‘pressure’ and ‘educational’ groups attempting to mould public opinion. One of the cardinal rules to be followed in the analysis of many marketing controversy is first to ascertain which groups are vocal in the controversy and what they might stand to gain or lose. The institutional approach can be helpful in understanding why there are specialized middlemen in the agricultural industry. The rationale for the existence of middlemen is that these specialized firms often can perform the marketing functions more efficiently than either farmers or consumers.

The Behavioral systems approach consists of four sub-components: Input- output system, power system, communication system, and adaptive behavior system in the operation of the marketing system at any one time. Keeping these in mind may help explain actions which, when viewed only in the context of one of the systems, seem irrational or unintelligent. A firm may forego the ultimate in an input – output solution because its communication system has broken down or because of considerations of its power situation. For example, a firm may choose to acquire another related firm and integrate its activities in order to improve its internal communications or to enhance its power in the market place. Or in another instance it may acquire another firm because it foresees changes coming, and management of the acquired firm may present the most feasible method of adapting to the new conditions. The analytical view of multiple behavior systems adds the important dimension of decision makers and their differing goals to the rather impersonal functional and institutional analysis.

Managerial approach to agricultural marketing evaluates marketing from management point of view. It deals with the management of the 4-Ps of Marketing or what is known as the Marketing Mix.  The 4-Ps of marketing are product, place, price and promotion. However, the management of the 4-P’s of marketing is influenced by the environment under which a firm operates in. Such environment can be technological, political, economic and socio-cultural. There is a vast array of circumstances that will dictate which elements of the marketing mix are to be employed and in which proportion. If sufficient time is devoted into accurately defining marketplace, market segment, product positioning, and unique selling propositions then it becomes much easier to carry out this task.

Finally the Structure, Conduct ad Performance (S-C-P) model or paradigm, a standard tool for the analysis of markets was considered. This paradigm postulates that the market structure determines the market conduct, which then sets the performance of the market. It hypothesizes that the number of sellers and buyers determines the behaviour of economic agents and thereby determine how close the industry comes to meeting the standard of reference of social welfare. Structure consists of the characteristics of the organization of the market which seems to influence strategically the nature of competition and the pricing within a market such as the degree of buyer-seller concentration, entry conditions, and product differentiation. Conduct looks at the patterns of behaviour which enterprises follow in adapting and adjusting to markets in which they buy and sell, in particular methods employed to determine prices, sales promotion, and coordination policies and the extent of predatory and exclusionary tactics directed against established rivals and potential entrants. Performance represents the economic results of structure and conduct, in particular the relationship between distributive margins and in costs of marketing services.