STANDARDIZATION

Standardization is the process of fixing certain norms for the

product. These norms are established by customs or tradition or by
certain authority. It involves determination of basic characteristic of
a product on the basis of which the product can be divided into
various groups. It also means determining the standard of product to
be produced with regard to size, color, form, weight, shape and
quality. Standards are model products which form the basis of
comparison.
Without standardization the rule of caveat (law) prevails and there
may be confusion and unfairness. The term of standardization is
used in a broader sense. Standardization is a application of standard
to goods meant for marketing with a view to further sub dividing
them into several grades or classes. Thus standardization means
making the quality specification of the grade uniform among buyers
and sellers over space and time.
According to National Commission on Agriculture standardization is
defined as, “the determination of basic limits or grades in the form
of specification to which manufactured goods must conform and a
class into which the product of agriculture and the extra active
industries may be sorted is known as standardization.”
Basis of standardization:

Agricultural goods are standardized on the basis of different factors,

based on which they are classified into different grades. The
following are some of the factors on the basis of which standards are
set:
1) On the basis of quantity, weight and measures.
2) On the basis of size and shape.
3) On the basis of color such as apples.
4) On the basis of quality such as food grains and cotton.
ADVANTAGES OF STANDARDIZATION:

1. Uniformity in quality:
With standardized goods, there is homogeneity and consistency in
quality. Hence, a consumer can buy a product without much hesitation
and risk as the quality of product will not change over a period of time,
thus leading to better goodwill.

2. Differential pricing :
When goods are standardized and classified into various types, one can
used differential pricing for different grades of the product. Thus
assuring better return to both buyer as well as seller. e.g. Dettol and
3. Increased in demand:
As there is uniformity in size, form, quality and utility of all products
of an enterprise, the customers rely on these products. Sale of
standardized goods increases.

4. Elimination of risk:
The standards of products are determined keeping in mind the habits,
tastes and nature of consumers and the risk of selling standards goods
is reduced.
5. Expanding the market :

There is large-scale production of standard goods which results in

many types of saving in production , distribution , advertising and
sales promotion because of these the manufacturer is in a position to
produce best quality goods at minimum cost thus attracting a
number of customer.

6. Availability of finance :
Finance can be obtained easily for standard goods as financial
institution prefer giving finance to those enterprises who deal in
standard goods.
7. No need for inspection:
There is no need for inspecting the quality of a product as the form of
size, quality and utility of all the products in a lot are uniform in all
respects and the consumers are convinced with it.

8. Standardization helps to reduce inventory items

9. It helps in evolving better means of communications about an item in

the company.

10. It forms a base for the inventory analysis.

11. The specifications of items can be more clearly spelt out,
making quality control.
12. In a developing economy like ours, where the need is to
promote exports insistence on standards helps in creating
confidence in the international market.
13. By using National standards, it is easier to locate sources of
supplies and in the case of machine parts; the placements can be
obtained easily. It could also be used in advertising the products as
well as spare parts
Grading
Grading means sorting of unlike lots of produce into different lots
according to quality specification laid down. Each lots has substantially
the same characteristics as far as quality is concerned. Grading is an
important function of standardization. It implies the division of
products into classes made up of unit possessing similar characteristics
of size and quality. Grading is mostly done in case of raw materials,
mineral products and agricultural products. There is no need to divided
industrial product as they are produced according to pre- determined
standards. There may be difference in quality or size or shape or
characteristics of the products. The grade standards for commodities are
laid down first and than the commodities are sorted out according to
accepted standards. Grading helps the producer to get proper prices for
Grading is categorizing the produce into different lots, each containing
similar characteristics. The characteristics could be one or more of the
following type:

Size – Big, medium, small, long, short, roundish, oblong etc.

Flavour – which in turn speaks of taste or class

Ripeness – raw, semi-ripe, ripe in case of fruits, oilseeds, pulses and

cereals.

Length of staple – in case of cotton and jute.

Location oriented – like Goa Alfanso, Bydagi chillies, Baiganpalli

mango, and Nagpur orange

Nasik grapes – having specific tastes, shape, colour etc.

PURPOSE OF GRADING

• It is a means to describe the quality of produce for sale/purchase

activity
• It protects consumers from unfair trade practices by traders or
farmers and also enables farmers to get price as per quality and
grade
• It works as a basis for fixing price and premium price as per
quality
ADVANTAGES AND IMPORTANCE OF GRADING:

Grading in general is helpful to all the stockholders in agro-related

activities: the farmers, traders, co-operative and the ultimate
consumers. The advantages of grading are:

1. Production of Large Scale:

Goods are produced on a large scale, as grading of goods helps in

increasing its demand. It becomes easy for a producer to produce
these goods on a large scale as goods are graded.
2. Increase in Sales:
Customers do not bother to enquire about the goods graded, as they
are very easy to be sold. Therefore, marketing of graded goods
becomes easy.

3. Quality Certainty:
Certainty provides producers a reasonable price for their products
and provides standard goods of uniform quality to customers at
reasonable prices. It helps the producers as well as the buyers.
4. Helpful In Financial Management:
For the financial management of the enterprise graded products are
very helpful. These products can be used easily, as security loans
can be arranged as security of these products.

5. Helpful in Future Contracts:

Supply contracts may be entered into future for graded products as
the identification of graded products become easy and different
types of products are divided into different groups.

6. It makes price more reasonable to grades and there will be

difference in price as per quality.
7. Simplification of storage and marketing of different grades.

8. Loans can be given based on stored goods as per the grade and’

9. Easier to understand quality available for each grade in case of

bulk sale.

10. Based on grades, quality and quantity, it is easy to estimate value

for loans against stock.

11. Price comparison by consumers is easy to due to grade identity.

The buyer expects least or no risk in his purchases.
12. Grading helps to create perfect competition in the market as it will
set a good standard of equivalent grades and materials competition.

13. Overall marketing cost can be reduced as repeat evaluation, spot

separation (grading) and doubts in the mind on consumers are avoided.
TYPES OF GRADING:
Grading may be done on the basis of fixed standards or variable
standards. It is of three types:

1. Fixed or mandatory grading:

Under this the goods are sorted out according to the size, quality and
other characteristics which are of fixed standards. These do not vary
over time and space. It is mandatory for a person to follow these
grade standards if he intends to sell graded products.

The Agriculture Marketing Advisor Government of India has fixed

grade standards for a number of agricultural commodities and it is
compulsory to grade the produce according to these grade
specifications. The use of mandatory standards is compulsory for
export of the agricultural commodities to various countries.
For many of the agricultural produce, certain grades and standards are
fixed by Agricultural Marketing Advisor, Government of India. This is
done for having and maintaining high standard and clarity of quality in
case of exports of agro-produce. Farmers are not free to use their own
standards and classifications in case of exports. The Government of
India has made standards based on size, quality and other
characteristics which are fixed standards hence mandatory for
exporters.
2. Permissive or variable grading:

Under this the goods are graded according to the standards which
vary over a period of time. The grading specifications are fixed in
over time and space in this case but changed every year according to
the quality of the produce in that particular year. In India grading by
this method is not permissible.
3. Centralized/decentralized grading:

Under the centralized grading system an authorized packer either sets

up for his own laboratory manned by qualified chemists or seeks
access to an approved grading laboratory set up for the purpose by
state authorities or co-operative association or private agencies.
Grading in respect of commodities such as ghee, butter and vegetable
oil where elaborate testing facilities are required for checking the
purity as assessing the quality has been placed under the centralized
system.
Eg. Vegetables, fruits, eggs, pulses and cereals, the grades for these
produce are determined on the basis of physical characteristics.
Both these grading programmes are consumer oriented. In addition
to these programmes, the state marketing authorities also implement
a grading level. Free grading services are provided to farmers for
sorting the produce.
For many of the agricultural produce, certain grades and
standards are fixed by Agricultural Marketing Advisor,
Government of India. This is done for having and maintaining
high standard and clarity of quality in case of exports of agro-
produce. Farmers are not free to use their own standards and
classifications in case of exports. The Government of India has
made standards based on size, quality and other characteristics
which are fixed standards hence mandatory for exporters.
4. Grading at producers level:

Under this programme, free grading services are provided to the

farmers for sorting the produce before offering for sale. This
enables them to realize prices commensurate with the quality of
produce. Several regulated markets and warehouses are manned
with grading personnel with the central assistance.

Farmers on their own also do grading, which is actually

categorizing as per their own thinking. They do not have an idea of
standards and grades as per DMI. Farmers do only from the point
of view of getting fair rates to their produce. Marketing agents also
develop some expertise in gradation of agricultural produce and
their opinion is given importance in price fixing and negotiations.
STORAGE AND WAREHOUSING
Storage is an important marketing function, which involves holding
and preserving goods from the time they are produced until they
are needed for consumption.
1. The storage of goods, therefore, from the time of production to
the time of consumption, ensures a continuous flow of goods in
the market.
2. Storage protects the quality of perishable and semi-perishable
products from deterioration;
3. Some of the goods e.g., woolen garments, have a seasonal
demand.
4. To cope with this demand, production on a continuous basis and
storage become necessary;
5. It helps in the stabilization of prices by adjusting demand and
supply;
6. Storage is necessary for some period for performance of other
marketing functions.
7. Storage provides employment and income through price
advantages.
Types of storages
Underground Storage Structures
Underground storage structures are dugout structures similar to a
well with sides plastered with cowdung. They may also be lined
with stones or sand and cement. They may be circular or
rectangular in shape. The capacity varies with the size of the
structure.

Advantages
Underground storage structures are safer from threats from
various external sources of damage, such as theft, rain or wind.

The underground storage space can temporarily be utilized for

some other purposes with minor adjustments; and

The underground storage structures are easier to fill up owing to

the factor of gravity.
Surface storage structures
Foodgrains in a ground surface structure can be stored in two ways
- bag storage or bulk storage.

Bag storage
Each bag contains a definite quantity, which can be bought, sold
or dispatched without difficulty;
Bags are easier to load or unload.
It is easier to keep separate lots with identification marks on the
bags.
The bags which are identified as infested on inspection can be
removed and treated easily; and
The problem of the sweating of grains does not arise because the
surface of the bag is exposed to the atmospheres.
Bulk or loose storage
Advantages
The exposed peripheral surface area per unit weight of grain is less.
Consequently, the danger of damage from external sources is
reduced; and
Pest infestation is less because of almost airtight conditions in the
deeper layers.
The government of India has made efforts to promote improved
storage facilities at the farm level.
Improved grain storage structures
I.For small-scale storage
•PAU bin
This is a galvanized metal iron structure. It s capacity ranges from 1.5 to
15 quintals. Designed by Punjab Agricultural University.
•Pusa bin
This is a storage structure is made of mud or bricks with a polythene
film embedded within the walls.
•Hapur Tekka
It is a cylindrical rubberised cloth structure supported by bamboo poles
on a metal tube base, and has a small hole in the bottom through which
grain can be removed.
II . For large scale storage
•CAP Storage (Cover and Plinth)
It involves the construction of brick pillars to a height of 14" from
the ground, with grooves into which wooden crates are fixed for the
stacking of bags of foodgrains. The structure can be fabricated in
less than 3 weeks. It is an economical way of storage on a large
scale.
•Silos
In these structures, the grains in bulk are unloaded on the conveyor
belts and, through mechanical operations, are carried to the storage
structure. The storage capacity of each of these silos is around
25,000 tonnes.
Warehousing
1. Warehouses are scientific storage structures especially constructed for the
protection of the quantity and quality of stored products.
2. The product is protected against quantitative and qualitative losses by the
use of such methods of preservation as are necessary.
3. Warehouses meet the financial needs of the person who stores the product.
Nationalized banks advance credit on the security of the warehouse
receipt issued for the stored products to the extent of 75 to 80% of their
value.
4. Warehouses help in price stabilization of agricultural commodities by
checking the tendency to making post-harvest sales among the farmers.
5. Warehouses also offer the facility of market information to persons who
hold their produce in them.
Working of Warehouses
Acts: - The warehouses (CWC and SWCs) work under the
respective Warehousing Acts passed by the Central or State Govt.

Eligibility: - Any person may store notified commodities in a

warehouse on agreeing to pay the specified charges.

Warehouse Receipt (Warrant): - This is receipt/warrant issued by

the warehouse manager/owner to the person storing his produce
with them. This receipt mentions the name and location of the
warehouse, the date of issue, a description of the commodities,
including the grade, weight and approximate value of the produce
based on the present prices.
Use of Chemicals: - The produce accepted at the warehouse is preserved
scientifically and protected against rodents, insects and pests and other
infestations. Periodical dusting and fumigation are done at the cost of the
warehouse in order to preserve the goods.

Financing - The warehouse receipt serves as a collateral security for the

purpose of getting credit.

Delivery of produce: - The warehouse receipt has to be surrendered to

the warehouse owner before the withdrawal of the goods. The holder
may take delivery of a part of the total produce stored after paying the
storage charges.
Types of warehouse
.On the basis of Ownership
Private warehouses: These are owned by individuals, large business
houses or wholesalers for the storage of their own stocks. They also
store the products of others.

Public warehouses: These are the warehouses, which are owned by

the govt. and are meant for the storage of goods.

Bonded warehouses: These warehouses are specially constructed at

a seaport or an airport and accept imported goods for storage till the
payment of customs by the importer of goods. These warehouses
are licensed by the govt. for this purpose. The goods stored in this
warehouse are bonded goods. Following services are rendered by
bonded warehouses:

The importer of goods is saved from the botheration of paying

customs duty all at one time because he can take delivery of the
goods in parts.
General Warehouses: These are ordinary warehouses used for
storage of most of foodgrains, fertilizers, etc.

Special Commodity Warehouses: These are warehouses, which are

specially constructed for the storage of specific commodities like
cotton, tobacco, wool and petroleum products.

Refrigerated Warehouses: These are warehouses in which

temperature is maintained as per requirements and are meant for
such perishable commodities as vegetables, fruits, fish, eggs and
meat
Warehousing in India
Central warehousing corporation (CWC)
This corporation was established as a statutory body in New Delhi
on 2nd March 1957. The Central Warehousing Corporation provides
safe and reliable storage facilities for about 120 agricultural and
industrial commodities.

Functions
To acquire and build godowns and warehouses at suitable places in
India.
To run warehouses for the storage of agricultural produce, seeds,
fertilizers and notified commodities for individuals, co-operatives
and other institutions,
To act as an agent of the govt. for the purchase, sale, storage and
distribution of the above commodities.
To arrange facilities for the transport of above commodities.
To subscribe to the share capital of state Warehousing corporations
and to carry out such other functions as may be prescribed under the
Act.
The Central Warehousing Corporation is running air-conditioned
godowns at Calcutta, Bombay and Delhi, and provides cold storage
facilities at Hyderabad.
Special storage facilities have been provided by the Central
Warehousing Corporation for the preservation of hygroscopic and
fragile commodities.
The corporation has also evolved techniques for the storage of
spices, coffee, seeds
State Warehousing Corporations (SWCs)
Separate warehousing corporations were also set up in different
States of the Indian Union. The areas of operation of the State
Warehousing Corporations are centres of district importance. The
total share capital of the State Warehousing Corporations is
contributed equally by the concerned State Govt. and the Central
Warehousing Corporation.
Importance of labeling in marketing
Marketers use labeling to their products to bring identification. This kind
of labeling helps a viewer to differentiate the product from the rest in the
shelves of the market. There are several used of the label for the products
in the market.
Labeling is used for packaging the product. In marketing, a marketer can
also use a sticker inedible products to impart knowledge of the
ingredients of the food items. This helps to spread awareness among the
customers about the item they are consuming and labeling also helps to
mention ingredients.
Types of labeling in marketing
There are various types of labeling in marketing.
Branded Product Labels
Products need to be branded to help with identification and play a
key role in company brand building programs. Branded Product
Labels need to be securely bonded to the product surface in a way
that is best suited to that product.
There are two types of branded labels:
• Removable and
• None Removable labels
With permanent labels, the bonding has to be permanent and the label
must be difficult to remove and resistant to a number of factors.
Eco or Information Labels
Information Labels or Eco-Labels are used on consumer products
such as foodstuff and fast moving consumer goods. They are used to
impart information to the consumer about the product. Often these
types are made out of eco-friendly substances so that they do not
interfere with the products they are associated with.
Other Product Label Types
There are a number of different label types that are in common usage
around the world that are regular mass produced by specialist
printing services.
What is product labeling?
Product Labeling is a key feature in marketing. It helps to market the
product allowing customers to know about the item and give
necessary messages including ingredients, instructions, and uses.
Product labeling can be done in a variety of sizes, materials, and
shapes. It plays a key role as a point of sale display in the market
shelves. They can also communicate information about how to
handle a product or how to dispose of it. You can use the labeling for
security reasons so that a product should not be misused. It is for
these purposes the labeling having the logo or the trademark of the
company. All these are different types of uses of the label for a
product in the world of business.
What must you include in your label?
A label needs to comply with the Competition and Consumer Act
2010 (CCA). This Act is required to give information to consumers,
such as
The mandatory consumer product information standards under the
CCA
Industry specific regulations, such as the Food Standards Code
Labels required by customs for some imported products under the
Commerce (Trade Descriptions) Act.
Importance of labeling and packaging
Another main purpose of the use of labeling and packaging is to
exaggerate the product. A marketer needs to grab the attention of a
viewer to purchase the product. Labeling and packaging should be
able to beautify a product to add to its visual appeal.
This can instantly grab a viewer’s attention towards a product. You
can arouse interest in the mind of a customer towards a product
through an attractively designed label. It is essential to use a good
quality material for the sticker.
.
Importance:
• The role of packaging and labeling has become quite significant
as it helps to grab the attention of the audience.
• Labelling and packaging can be used by marketers to encourage
potential buyers to purchase the product.
• Packaging is also used for convenience and information
transmission. Packages and labels communicate how to use,
transport, recycle or dispose of the package or product.