COOPERATIVE MARKETING MODULE

Roel P. Dolaypan Jr.

Module 1: Introduction to Cooperative Marketing

A. Defining Cooperative Marketing

Cooperative marketing is an innovative approach to promoting and selling
products and services, placing emphasis on the collective success of a cooperative
ecosystem and the well-being of its members. In contrast to conventional
marketing, which prioritizes individual business profits, cooperative marketing is
rooted in collaboration, fairness, and shared benefits.

Definition of terms
- Collaboration: Working together with others to achieve a common goal. In
cooperative marketing, it means teamwork among members and partnerships with
others to reach shared objectives.
- Fairness: Treating everyone impartially and justly, ensuring equal opportunities
and benefits. In cooperative marketing, decisions are made fairly to make sure
each member gets a fair share.
- Shared Benefits: Outcomes or rewards that everyone in the group enjoys together.
In cooperative marketing, it's about distributing the good results among members,
so everyone benefits from the group's success.

Key Elements of Cooperative Marketing:

a. Membership-driven: In cooperative marketing, members are not just customers
but also owners who actively run the cooperative. This ensures that decisions
about marketing strategies involve everyone. The focus is on tailoring
marketing efforts to meet the specific needs of the members, creating a sense
of ownership and active engagement in the cooperative.
b. Focus on social impact: Cooperative marketing goes beyond simply making
sales. It aims to make a positive impact on society and the environment. This
can include supporting sustainable practices, promoting fair trade, and initiating
projects that contribute to the well-being of communities. In essence, the
cooperative sees its marketing efforts as a way to bring about positive change
beyond financial gains.
c. Collaborative approach: Cooperation is at the heart of cooperative marketing.
Rather than working in isolation, cooperatives form partnerships with other
cooperatives, government agencies, and civil society organizations. This
collaborative approach helps them expand their influence, share resources,
and work together to achieve common goals. By teaming up with others,
cooperatives can address challenges and pursue opportunities more
effectively.

B. The Unique Context of Cooperative Marketing in the Philippines

Cooperative enterprises in the Philippines form a dynamic and extensive network
that significantly influences the country's economic landscape. As of 2020, the
Cooperative Development Authority (CDA) reported a remarkable presence of

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over 21,000 registered cooperatives operating across various sectors. These

cooperative entities collectively engage more than 15 million members, making
them a substantial force within the national workforce.

Notably, the economic impact of cooperatives extends beyond mere numbers.

With approximately 800,000 individuals directly employed, these cooperative
ventures play a crucial role in job creation and income generation. Furthermore,
the diverse nature of cooperative enterprises places them at the forefront of
economic activities, with a significant majority falling under the Micro, Small, and
Medium Enterprises (MSME) category. This, in turn, contributes significantly to the
employment landscape and economic diversification, as highlighted by the
Department of Trade and Industry (DTI).

Moving beyond mere economic statistics, cooperatives make a substantial

contribution to the Philippine Gross Domestic Product (GDP), estimated at 5-7%,
according to the International Labour Organization (ILO). However, their impact
goes even deeper, especially in rural areas. Cooperatives emerge as powerful
agents of change, promoting agricultural development, poverty reduction, and food
security, as emphasized by the Asian Development Bank (ADB).

Delving into specific examples illustrates the multifaceted role of cooperatives.

Agricultural cooperatives, for instance, empower farmers by facilitating access to
better inputs, negotiating fairer prices, and improving market access. In doing so,
they not only enhance productivity but also uplift the income levels of those
engaged in agriculture. Credit cooperatives, on the other hand, extend financial
services to underserved communities, fostering financial inclusion and supporting
local entrepreneurship. Simultaneously, consumer cooperatives contribute to
household savings by providing discounted goods and services to their members.

In essence, cooperative enterprises in the Philippines transcend mere economic

statistics; they embody a force for inclusive growth, poverty reduction, and
sustainable development. This discussion aims to unravel the unique context of
cooperative marketing in the Philippines, shedding light on the interconnectedness
of their size, economic impact, and specific examples that collectively define their
pivotal role in shaping the nation's socio-economic fabric.

The Philippines has a rich history and a vibrant culture of cooperative enterprises
that significantly contribute to economic development, particularly in rural areas.

Unique factors shape cooperative marketing in the country:

a. Strong legal framework: The Philippine Cooperative Code (RA 9590) forms the
legal basis for cooperative operations, including specific provisions for
marketing activities.

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Unpacking RA 9590's Impact on Cooperative Marketing Decisions:

a. Member Participation:
➢ One-member-one-vote principle: Ensures democratic decision-making,
where marketing strategies reflect the needs and desires of the members.
➢ Mandatory member education: Empowers members to evaluate proposed
marketing plans and contribute informed input.
➢ Transparency requirements: Open financial records and regular reporting
foster trust and build member buy-in for marketing initiatives.
➢ Example: A rice farmers' cooperative faced internal disagreements on
selling directly to consumers through an online platform. RA 9590's
provisions facilitated open discussions, financial analysis, and ultimately, a
majority vote in favor of the online market, leading to increased profits and
member satisfaction.
b. Governance:
➢ Board of Directors' oversight: Ensures responsible allocation of resources
for marketing activities within approved budgets.
➢ Separation of management and member roles: Prevents conflicts of interest
and guarantees marketing decisions prioritize member benefit.
➢ Auditing requirements: Provide financial accountability and transparency,
crucial for building trust with potential partners and investors.
➢ Example: A cooperative bakery faced accusations of financial
mismanagement by a disgruntled member. The CDA, empowered by RA
9590, conducted an independent audit, which cleared the board and
restored member confidence, allowing the cooperative to focus on
expanding its marketing reach.
c. Financial Management:
➢ Surplus distribution regulations: Encourage reinvestment in marketing
initiatives and infrastructure, promoting long-term growth.
➢ Reserve fund requirements: Provide financial stability to weather downturns
and support emergency marketing strategies.
➢ Restrictions on borrowing: Prevent excessive debt and ensure marketing
campaigns align with the cooperative's financial capacity.
➢ Example: A handicraft cooperative, relying heavily on tourism income, was
hit hard by the pandemic. Using its legally mandated reserve fund, they
launched a digital marketing campaign targeting domestic audiences,
successfully diversifying their customer base and mitigating losses.

b. Government support: The Department of Agriculture (DA), the Cooperative

Development Authority (CDA) and other relevant government agencies offer
various programs and initiatives to support cooperative marketing efforts.
Government Agency Support Areas Specific Programs
✓ Agricultural
Marketing
Assistance Service
✓ Marketing
Department of (AMAS)
✓ Value Chain
Agriculture (DA) ✓ Agribusiness and
Development
Marketing
Assistance Service
(AMAS)

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Government Agency Support Areas Specific Programs

✓ - Value Chain
Enhancement
Program (VCEP)
✓ Institutional
Capacity
Development
Program (ICDP)
Cooperative ✓ Capacity Building ✓ Cooperative
Development Authority ✓ Cooperative Education and
(CDA) Marketing Training
✓ Enterprise
Development and
Business
Consultancy
✓ Shared Service
Facilities (SSF)
✓ MSME
Department of Trade Program
Development
and Industry (DTI) ✓ Negosyo Centers
✓ Market Access
✓ MSME Roving
Academy
✓ Agrarian Production
Credit Program
✓ Agrarian Reform
Department of Agrarian (APCP)
Beneficiaries
Reform (DAR) ✓ Program
Support
Beneficiaries
Development (PBD)
✓ Sustainable
Livelihood Program
(SLP)
National Anti-Poverty ✓ Convergence
✓ Poverty Reduction
Commission (NAPC) Program for
Sustainable Rural
Development
(CPSRD)
✓ Sustainable
Livelihood Program
(SLP)
Department of Social ✓ Kapit-Bisig Laban sa
Welfare and ✓ Social Welfare Kahirapan
Development (DSWD) Comprehensive and
Integrated Delivery
of Social Services
(Kalahi-CIDSS)

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Government Agency Support Areas Specific Programs

✓ Small Enterprise
Technology
Upgrading Program
Department of Science
✓ Technology and (SETUP) -
and Technology
Innovation Community
(DOST)
Empowerment
through Science and
Technology (CEST)

c. Cultural values: In the context of cooperative marketing in the Philippines,

cultural values play a crucial role in shaping the strategies and dynamics of
these ventures. Three prominent Filipino values - bayanihan (mutual help),
pakikisama (interpersonal harmony), and pakikilahok (participation) - create a
unique environment that fosters collaborative marketing efforts.
1. Bayanihan (Mutual Help): Cooperative marketing strategies often emphasize
mutual support among members. The concept of bayanihan encourages
members to pool resources, share knowledge, and collectively address
challenges. For instance, cooperatives may collaborate in joint marketing
campaigns, allowing smaller enterprises to benefit from the collective strength
of the group.
2. Pakikisama (Interpersonal Harmony): Cooperative marketing thrives on
positive interpersonal relationships. The value of pakikisama emphasizes the
importance of maintaining harmony and camaraderie within the cooperative.
This influences marketing strategies to prioritize inclusivity, fairness, and
transparent communication.
3. Pakikilahok (Participation): The value of pakikilahok underscores the
significance of active participation. In cooperative marketing, this translates into
the active involvement of all members in decision-making processes, planning,
and execution of marketing strategies.

C. Principles and Values of Cooperative Marketing in the Philippines

The Philippine Cooperative Code serves as the foundational framework for
cooperative enterprises in the country, providing a set of core principles and values
that guide the development and implementation of cooperative marketing
strategies. These principles and values are essential for fostering a collaborative
and ethical approach to marketing within the cooperative sector.
1. Voluntary and Open Membership: Cooperative marketing is built on voluntary
and open membership, allowing individuals to join freely without discrimination.
Application: Marketing strategies focus on inclusive membership recruitment,
ensuring that all individuals interested in participating are welcomed into the
cooperative.
2. Democratic Member Control: Decision-making is based on democratic
processes, with each member having an equal say in the cooperative's affairs.
Application: Marketing strategies involve inclusive decision-making, where

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members collectively participate in planning, approving, and evaluating

marketing initiatives.
3. Economic Participation by Members: Members actively contribute and control
the capital of the cooperative, with benefits proportionate to their transactions
or patronage. Application: Marketing strategies emphasize member
participation in funding cooperative marketing endeavors, with returns
distributed based on individual contributions.
4. Autonomy and Independence: Cooperatives are autonomous, self-help
organizations controlled by their members, promoting independence.
Application: Marketing strategies prioritize self-reliance, encouraging
cooperatives to develop their marketing plans and initiatives independently,
aligning with their unique goals and challenges.
5. Education, Training, and Information: Cooperatives provide education and
training to members, fostering their understanding of cooperative principles and
effective management. Application: Marketing strategies incorporate
educational components, ensuring that members are informed about market
trends, consumer behavior, and innovative marketing techniques.
6. Cooperation Among Cooperatives: Cooperatives work together to strengthen
the cooperative movement, promoting mutual assistance. Application:
Marketing strategies include collaboration with other cooperatives for joint
ventures, shared marketing campaigns, and knowledge exchange to
collectively enhance the sector.
7. Concern for Community: Cooperatives contribute to the sustainable
development of communities, aligning their activities with community needs.
Application: Marketing strategies incorporate community-centric initiatives,
emphasizing the social impact of cooperative activities and addressing local
needs.
8. Social Responsibility: Cooperatives uphold social responsibility by conducting
their operations ethically and contributing to the overall welfare of society.
Application: Marketing strategies prioritize ethical practices, transparency, and
social initiatives that positively impact both members and the broader
community.

D. Benefits and Challenges of Cooperative Marketing

a. Benefits:
• Increased market access and bargaining power: Cooperative marketing
enables collective action, overcoming individual limitations and enhancing
competitiveness.

The "Philippine Coffee Alliance" is a cooperative of local coffee farmers. By

joining forces, they expanded market access through a collective brand and
negotiated better prices with coffee buyers. This alliance increased the
bargaining power of individual farmers, leading to improved income and
sustainable farming practices.

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• Reduced costs and risks: Shared resources and collaborative activities lead
to economies of scale and risk mitigation.
The "Pili Nut Growers Cooperative" in Bicol pooled resources to collectively
market their products. By sharing transportation and packaging costs, they
achieved economies of scale, reducing individual expenses. Additionally,
collaborating on pest control measures helped mitigate risks, ensuring a stable
and high-quality nut supply.

• Improved product quality and branding: Collaborative efforts facilitate

consistent quality control and effective brand building.
The "Sagada Weavers Cooperative" ensures product quality through
collaborative efforts. By collectively adhering to traditional weaving techniques
and standards, they've built a reputable brand. This cooperative approach not
only ensures consistent quality but also preserves the cultural heritage
associated with their products.

• Enhanced member value and satisfaction: Marketing strategies directly

address the needs and interests of members, leading to increased loyalty
and engagement. Activities: Create a member satisfaction survey for a
hypothetical cooperative.
The "Lingap Kooperatiba Sa Kalusugan" is a health-focused cooperative
providing medical services. Their marketing strategy includes tailored wellness
programs based on member needs. Regular surveys on healthcare
preferences ensure member satisfaction, fostering loyalty and active
participation.

• Positive social and environmental impact: Cooperatives can promote

sustainable practices, improve livelihoods, and contribute to community
development. Activities: Propose a community development project for a
cooperative, considering environmental sustainability.
The "Bukidnon Organic Farmers Cooperative" promotes sustainable
agriculture. Through community projects, like organic farming training and
reforestation, they not only ensure environmental sustainability but also uplift
the livelihoods of members. This cooperative's initiatives positively impact both
its members and the broader community.

b. Challenges:
• Building member understanding and participation: Educating members
about cooperative marketing principles and engaging them in decision-
making processes can be challenging.
The "Tagpuan Artisans Cooperative" faced challenges in member
engagement. They addressed this by organizing regular workshops explaining
the benefits of cooperative marketing. Hands-on activities and open
discussions helped build member understanding and active participation.

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• Limited resources and expertise: Smaller cooperatives may struggle to

access skilled personnel and financial resources for effective marketing
campaigns. Activities: Develop a resource mobilization plan for a small
cooperative.
The "Sari-Sari Store Owners Cooperative" struggled with limited resources. To
address this, they developed a resource mobilization plan, seeking
partnerships with local businesses. This collaboration provided access to
expertise and financial resources, enabling effective marketing campaigns.

• Competition from traditional businesses: Cooperatives often face

competition from established businesses with greater resources and market
presence.
The "Davao Cacao Growers Cooperative" faced competition from established
chocolate brands. They conducted a thorough competitive analysis and
differentiated their product by highlighting the unique quality of locally sourced
cacao. This strategy helped them carve a niche in the market.

• Internal conflicts and differing interests: Balancing the needs of different

member groups and managing internal conflicts can be complex.
The "Kapwa Kooperatiba sa Pagpapaunlad" addressed internal conflicts
through role-playing scenarios. By simulating potential conflicts and finding
resolutions, members learned effective communication and conflict resolution
skills, fostering a more harmonious cooperative environment.

• Adapting to a changing market landscape: Keeping up with evolving

consumer trends and technological advancements requires constant
adaptation and innovation.
The "Tech Innovators Cooperative" constantly adapts to technological
advancements. Regular market trend analyses help them stay ahead. For
instance, they embraced e-commerce platforms to market their tech products,
showcasing how adaptability ensures relevance in a dynamic market
landscape.

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Quiz 1: Introduction to Cooperative Marketing

Name: ______________________ Score: _______________

Instructions: Choose the best answer for each question.

1. What is the primary focus of cooperative marketing?

a) Maximizing profit for individual businesses
b) Increasing sales regardless of member benefits
c) Collaboratively promoting products and services for the cooperative
ecosystem
d) Competing fiercely with other businesses in the market

2. In which of the following ways are cooperatives different from traditional

businesses?
a) They are owned by shareholders who seek individual dividends.
b) They prioritize member needs and share profits equitably.
c) They focus solely on generating financial returns.
d) They operate independently without any collaboration.

3. Which of these factors uniquely influences cooperative marketing in the

Philippines?
a) Strong focus on individual achievement and competition
b) Widespread cultural emphasis on cooperation and shared benefits
c) Lack of government support for cooperative initiatives
d) Prevalent practice of prioritizing shareholder value

4. According to the Philippine Cooperative Code, what is a core principle of

cooperative marketing?
a) Aggressive advertising and promotional campaigns
b) Transparency and open communication with members
c) Prioritizing individual member profits over communal goals
d) Focusing solely on expanding market share

5. Which of the following is a benefit of cooperative marketing for small-scale

producers in the Philippines?
a) Increased competition leading to lower prices for consumers
b) Stronger bargaining power and improved market access
c) Reduced emphasis on quality control and branding
d) Increased reliance on individual marketing efforts

6. What is a challenge faced by cooperatives in implementing effective marketing

strategies?
a) Abundance of resources and skilled personnel
b) Overwhelming demand for their products and services
c) Difficulty in educating members about cooperative marketing principles

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d) Lack of competition from established businesses

7. Which of these values is not directly linked to cooperative marketing?

a) Democracy and equal participation
b) Equity and fair distribution of benefits
c) Hierarchical decision-making and individual leadership
d) Social responsibility and community development

8. What can cooperatives do to improve product quality and brand recognition

through marketing?
a) Invest in aggressive advertising campaigns without member involvement
b) Implement stricter quality control measures and collaborate on branding
c) Reduce focus on fair trade practices and sustainable agriculture
d) Emphasize individual member marketing efforts over collective branding

9. How can the government support cooperative marketing efforts in the

Philippines?
a) Deregulate the market and promote individual competition
b) Offer training programs and financial assistance for marketing initiatives
c) Encourage independent marketing efforts by individual cooperatives
d) Reduce emphasis on cooperative principles and prioritize profit maximization

10. What is a key element of cooperative marketing that differentiates it from

traditional marketing?
a) Reliance on individual sales representatives and commission-based models
b) Focus on short-term financial gains and immediate profit generation
c) Collaborative approach and shared benefits for the entire cooperative
ecosystem
d) Emphasis on aggressive competition and market dominance

11. Cooperatives often partner with other organizations like civil society groups for
what purpose?
a) To generate individual profits for all partners involved
b) To achieve common goals related to social impact and community
development
c) To compete more effectively against established businesses in the market
d) To gain an advantage in obtaining resources and market share

12. Which of these Filipino cultural values facilitates collaborative marketing efforts in
cooperatives?
a) Individualistic mindset and focus on personal success
b) Strong sense of community and mutual help (bayanihan)
c) Prioritization of personal gain over group benefits
d) Competitive nature and emphasis on outperforming others

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13. According to the Philippine Cooperative Code, how should profits generated
through cooperative marketing be distributed?
a) Based on the amount of individual investment made by members
b) In proportion to the sales performance of each member
c) Equitably among all members based on their membership status
d) Reinvested entirely in the cooperative for future growth

14. What can cooperatives do to overcome the challenge of limited resources for
marketing activities?
a) Reduce focus on member education and training programs
b) Increase individual member contributions and rely solely on internal resources
c) Seek partnerships with other cooperatives and leverage pooled resources
d) Prioritize individual

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