Market Information Services – Meaning, Significance and its Impact

Introduction: Market information plays a crucial role in the management of the market especially in
the context of agriculture. The success of an organisation largely depends on the way it manages the
market information and uses it effectively. Information symmetry or asymmetry plays a crucial role
in decision making process as well. It is a means of improving the efficiency of market systems and
promoting better price realisation. It helps the farmers plan their production effectively and reap
better benefits as well.

"A marketing information system is a continuing and interacting structure of people, equipment and
procedures to gather, sort, analyse, evaluate, and distribute pertinent, timely and accurate
information for use by marketing decision makers to improve their marketing planning,
implementation, and control".

The marketing information system distributes the relevant information to the marketers who can
make the efficient decisions related to the marketing operations viz. pricing, packaging, new product
development, distribution, media, promotion, etc.

Meaning of Market Information Services : According to the definition, Market Information Service is
a service that is operated by the public sector and that involves collection of varied information on
prices and the quantities of agricultural products that are traded widely among various marketing
functionaries and at various levels like assembling, wholesaling and retailing and involves further
information dissemination on a regular basis to the farmers, consumers, traders, government, etc on
a timely and regular basis.

A marketing information system (MIS) is a management information system (MIS) designed to

support marketing decision making. Jobber (2007) defines it as a "system in which marketing data is
formally gathered, stored, analysed and distributed to managers in accordance with their
informational needs on a regular basis."

Significance of Market Information Services: Market Information Services have a lot of significance
in the agricultural marketing system. They may be described as follows:

1. Maintains Clarity and Transparency: All the players in the market have complete information
on the prices and other relevant details.

2. Promotes Arbitrage thereby ensures greater profitability: The act of buying at a lower price
and selling at a higher price.

3. Spatial Arbitrage: Efficient functioning of different markets at different prices by the

activities of the traders.

4. The price differences are taken advantage of by the traders until they reach the level of the
cost of transaction.

5. Market information offers the opportunity to judge the performance of markets for
agricultural products and to determine micro- economic constraints, although additional information
on marketing costs will be necessary to form a reliable opinion regarding the efficiency of the
market. Market Information about the price and arrival etc. for the agricultural produce is very vital
to the farmers taking proper production and marketing decisions. The existence and dissemination
of complete and accurate market information is key to achieve both operational and pricing
efficiency in the marketing system.

Impact of Market Information Services:

1. Give symmetrical information to all the parties involved in the marketing system.

2. Help in efficient allocation of scare resources.

3. Farmers are able to bargain with the traders and get better prices for the same produce.

4. Market risk and uncertainty are reduced. Also, reduction in the transaction costs of the
farmers.

5. Farmers have a better decision-making power looking at the information available about the
buying and selling of the produce in respective markets or to withdraw the selling completely.

6. There can be a barrier to trading practices with lack of information. Farmers or

individuals with more information are found to have better agricultural practices and reap
greater benefits while those without information find it difficult to survive in the market.
7. Market information can be particularly valuable where countries are changing over
from a state-controlled marketing system to one of private enterprise, in that farmers and
small traders are made more aware of market opportunities.
8. It has considerable impacts on food security and nutritional security and can act as
an indicator for food shortages thereby promoting necessary and suitable preventive.
9. Market information also helps the policy-makers in better policy formulation by
providing commercial information on a timely and regular basis.
10. Lastly, it also benefits the consumers by giving them a power to bargain and thus
not get cheated with exuberant prices.
11. By contributing to more efficient marketing, particularly improved spatial distribution,
market information should be beneficial for consumers as well as farmers and traders. Information
on retail prices may also, under certain circumstances, assist consumers to bargain.

12. The essence of a good Market Information Service is that it should provide commercially
useful information on a timely basis.

13. Information is also useful to policy makers. This improves policy formulation as the
functioning of markets comes to be better understood. Market information is also an important
component of Early Warning systems for food security as it can assist in identifying areas of possible
shortages and can highlight whether prices are above or below normal seasonal trends.

Conclusion: Market information services play a major role in good conduct of the market. While new
technologies can improve dissemination of information, collecting it economically and meeting
user’s high-quality requirements remain major challenges. Knowledge of the right mix of resource
mobilization, needs for localization and perhaps personalization, and the logistics of the agricultural
marketing systems at the various levels of the marketing chain are critical for project success. On-
time delivery of reliable and high-quality information via widely available and adaptable
technologies is critical to the acceptance of the services by the end-users. However, ensuring this
acceptance mainly depends on the commitment and capability of the management of the services. It
helps marketing planning by making available correct information on the external environment and
the internal company realities. The information if free from any bias towards the pre-conceived
conclusion will have more value than otherwise.

References:
1. http://www.fao.org/3/AB795E/ab795e02.htm

2. https://www.tradefinanceglobal.com/posts/why-are-agricultural-market-information-systems-so-
important-for-trade/

3. PGDAEM course material, MANAGE, Hyderabad. Market-Led Extension