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The marketing intermediaries heve an important role in developing economies where the communication and transportation systems are underdeveloped. In Philippines, networks of personalized ties from Manila-based wholesalers to local middlemen and farmers feature the vegetable wholesale marketing system, which is seemingly efficient. The main objective of this paper is to offer a rigorous theory of vegetable customer market charactristic of the bilateral client relationship. For that purpose, first, we show the actual vegetable marketing system, f orcusing on the Manila central wholesale market. Second, we present a theoretical model based the repeated game theory. In the model, we postulate that such a customer market system enables the middlemen to facilitate the sales activity to the wholesalers without a high enforcement cost, under the conditions of demand uncertainty and information asymmetry, if the middlemen maintain trust by observing the promise to provide a premium to wholesalers, while the wholesalers keep their implicit contract on sales promotion.

A Role of Client Relationship in Philippine Wholesale Market