A membership certificate may be issued to each member as evidence of entitlements to the organization. No Middleman :- The major benefit of this co-operative marketing society is that a farmer will save himself from the middleman. Cooperative businesses can manage this risk by creating terms that avoid sudden cash flow drains, such as a worker cooperative designating in its bylaws that existing members will be reimbursed over a period of five years. Cooperative marketing occurs when organizations or a group of businesses with the same type of product work together to encourage people to buy their products. As a result, the cooperatives become inactive and come to a grinding halt.
Thus all member are equally important for the society. Disadvantages of cooperative society: Inspire of various advantages claimed of cooperatives. Cooperative marketing campaigns are developed by broadening horizons, and by discovering and sharing common ground with other companies. Many a times they strongly differs from each other on many important issues. No obstruction for membership: Unless and otherwise specifically debarred, the membership of cooperative society is open to everybody.
C Corporation The C corporation is the traditional form of corporation, which is a business entity that provides limited liability to its owners and shareholders, meaning the personal assets of the owners and shareholders are protected from the financial issues of the corporation Legalzoom. One option is for members to make a direct financial contribution through a membership fee, or through the sale of common or preferred stock. There is no limit on maximum members. For this purpose they can seek assistance from the government or can even evolve their own grading arrangements. Also Read: Co-operative store develops a feeling of mutual co-operation and help among its members. Members have a monetary interest in the financial well-being of the organization and rely heavily on the education and success of the other member producers.
Consumers will associate the partner brand with yours, and as a result, view you in a more favorable light because you joined forced with a brand they already love. Corruption: In a way, lack of profit motive breeds fraud and corruption in management. Examine both the advantages and disadvantages of joining a business c-operative. Cooperative businesses are owned by their stakeholders who have a say in crucial decisions, from electing board members to deciding which products to stock on their shelves. See also Economy of scale is an enormous benefit. The cooperative may retain a portion of earnings as an additional investment into the organization.
This is reflected in misappropriations of funds by the officials for their personal gains. While cooperative marketing can be mutually beneficial, it can also be tricky at times. Benefit 4 International cooperation As an international movement founded on the principle of self-help, there is a high degree of cooperation amongst cooperatives. Hence, marketing is a shortcoming for the cooperatives. Buy-local organizations can hire one graphic designer, one web designer, and one marketing manager, who then produce marketing material for the group as a whole and even for member companies. It, therefore, falls short of capital for meeting the normal requirements of the business and ultimately suffers losses. Often marketing and purchasing agreements are required when seeking outside financial backing.
The Internet is abundant with cooperative marketing opportunities. However, these types of deals can yield many benefits beyond the acquisition of new customers. The owners of the cooperative finance and operate the business, striving for a mutual benefit by working together. Food vendors, t-shirt sellers, farmers, artists, and musicians all sell and advertise their products and services through a variety of cooperative marketing agreements. All the members of the co-operative marketing society sell their product through society. For example fertilizers, seeds, machinery, credited are not timely available to the society societies.
Cooperatives provide a direct cost savings through the purchase of bulk supplies, increases in market access, a distribution of overhead and fixed costs as well as the allocation of profits based on usage to the members. Small Scale :- The co-operative marketing society operates on small scale, because its volume of business is small. Paul Bank for Cooperatives; and National Cooperative Bank. There is vast potential to create symbiotic relationships based on shared values and opportunities. However, the opposite can also be true. Preferred stock owners receive interest for their investment, and are usually given their interest dividends before the distribution of profits to common stock holders. Therefore, it has stable life are continues to exist for a longer period.
The important among the disadvantages are: 1. These also cannot employ the professional managers because it is neither compatible with their avowed ends nor the limited resources allow for the same. The members themselves organize the business and reduce the overhead expenses to the minimum. The employee is mostly low paid in the cooperative. Ownership certificates come is a variety of forms, including common stock, preferred stock, membership certificates, and capital certificates. While one farmer may have a difficult time getting the highest price for his snap peas, 100 farmers joining forces control a significant portion of the supply, thus increasing their bargaining power.
Social Service: The basic philosophy of cooperatives is self-help and mutual help. The services of middlemen are provided by the members of the society with the minimum cost. Advantage: Workers Get a Voice The member-owners of a cooperative business work together to make large and small decisions about the mechanics and direction of running the company. Thus, the farmers can wait for better prices; also there is no danger to their crop from rains, rodents and thefts. Articles of incorporation give the cooperative a distinct legal standing. For example, if the retailer you are working with wants to be depicted as a low cost, bargain store, but you want to be seen as a premium product, it will be very difficult for you to create an advertisement that can capture both of these messages.
Hence, the Government offers a number of grants, loans and financial assistance to the cooperative societies — to make their working more effective. Manufacturers commonly offer cooperative advertising programs to distributors and retail outlets, to help increase sales or launch a new product. So it is the major cause of the failure of co-operative marketing. Lack of Storage and Transport Facilities :- The above facilities are necessary for the efficient operation of the shops. About the Author George N. Standardization :- The cooperative societies should pay special attention to the grading and standardization of the crops.