Marketing Efficiency (Shepherd Method)

Marketing Efficiency (Shepherd Method)

Definition

Marketing Efficiency (Shepherd’s Method) measures the efficiency of an agricultural marketing system by comparing the value of goods sold with the total marketing costs incurred. It focuses only on marketing costs and does not include marketing margins.

Formula

Marketing Efficiency (ME) = Value of Goods Sold ÷ Total Marketing Cost

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Higher value of ME indicates a more efficient marketing system.

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