The recent feature of agri-product markets becomes more competitive by the effects of active interaction among countries (globalization) and over-production. Furthermore, customers tend to prefer safer and high-quality foods as the 'well-being' trend ...
The recent feature of agri-product markets becomes more competitive by the effects of active interaction among countries (globalization) and over-production. Furthermore, customers tend to prefer safer and high-quality foods as the 'well-being' trend becomes popular. Retail market has also changed with the appearance of big scale retailers such as supercenters and hypermarkets, and the market share of the big scale retailers is still growing quickly. These changes are forced agricultural cooperatives to remodel their sales systems into more competitive style-expanding size to meet market needs and specializing rolls.
However, since member cooperatives in Korea are generally small-sized and multi-functional, it is difficult that individual cooperatives cope with market changes by themselves. The Joint-Marketing System was proposed and performed as an alternative solution and this system becomes more important as it has strong effect of strengthening bargaining power.
The Join-Marketing System is a collaborative sales format among member cooperatives for the purpose of enhancing bargaining power. Each cooperative keeps its original business and structure, and partially cooperates in necessary areas such as harvesting, packaging, branding, physical distribution and sales under the principle of specialization. The system is also accompanied with transfer of authorities concerning sales process, and unification of decision-making process.
The type of organizations performing joint-marketing varies depending upon what kind of members-member cooperatives, NACF's county offices, etc.-join the system and which member takes the leading roll.
Since collaboration occurs partially without physical unification of members' own organization, strong vertical and horizontal integrations are essential based upon marketing agreements and acts of contracting. Member farmers and cooperatives need to be integrated horizontally so as to expand their bargaining power. Farmers, cooperatives and cooperatives's marketing union should be integrated vertically in order to improve stabilization of collaboration and growth of sales.
Concerning the preferable model of the Joint-Marketing System, regional alliance is suitable considering that it is the best type to achieve economies of scale and that it can create strong collaboration power within members and cooperatives throughout the same region.
The principle of running a regional-allied joint-marketing system starts with forming pooling system composed of member farmers. Specializing rolls between cooperatives and cooperatives's marketing union is also an important condition-supporting farmers, harvesting, packaging and branding for cooperatives and sales process and adminstration works for cooperatives's marketing union
Finally, for the success of Joint-Marketing System, collaboration and unification are necessary from the stage of raising crops. Proper packaging facilities should be installed as a centre of grading, packaging and quality assurance. As the federation of member cooperatives, NACF should expand its functions of supporting information, enhancing physical distribution, controlling quality certification system and controlling and joining joint-marketing systems in order to strengthening interactions between farmers and market. Establishing cooperation system between joint-marketing bodies and regional governments is also important since regional governments have duties to develope their own areas.