Marketing Aptitude: Grading

August 22, 2016 June 10, 2018

Grading is the process of dividing a quantity of the same kind of commodity into different homogenous groups according to the prescribed standards. It is very common in species, food grains, fruits, milk products, petroleum products and other agricultural products according to their size, colour, taste, strength, juice contents, etc. According to Tousley, Clark and Clark, “ To grade is to divide into lots which have approximately the same characteristics as to type, size or quality that is to sort products into the standard grades to which they belong. The purpose of grading is to describe the quality of produce for sale/purchase activity, protects consumers from unfair trade practices by traders or farmers and also enables farmers to get price as per quality and grade and works as a basis for fixing price and premium price as per quality.

Advantages and importance of Grading

Usually, Grading is helpful to all the stockholders in agro-related activities: the farmers, traders, co-operative and the ultimate consumers. Some of the advantages of grading are as follows:

Helpful in producing at large scale: As the demand of graded products increases, they are produced at large scale. Thus, with the help of gradation, it becomes easy for producer to produce the goods at large scale.
Helpful in increases sales: The graded goods and services are very easy to sell because customers always prefer to buy the goods and services of uniform nature and quality. Thus, marketing of graded goods and services becomes easy for a firm.
Qualitycertainty: The certainty of quality provides producers a reasonable price for their products and for the customers it provides standard goods of uniform quality at reasonable prices. It helps both the producers and customers.
Helpful in financial management: Based on grades, quality and quantity of products, it is easy to estimate value for loans against stock. These products can be used as collateral security and loans can be arranged as security of these products. If graded products are lost or damaged the amount of loss can easily be measured for insurance claim purpose.
Helpful in Future Contracts: As the identification of graded products become easy and different types of products are divided into different groups, supply contracts may be entered into future for graded products.