Transcript Agricultural Marketing

Agricultural Marketing
Agriculture Marketing
The bridge that links producer & consumer
What Is Marketing?


The process of determining the needs
and wants of consumers & being able to
satisfy those needs & wants
Marketing includes all of the activities
necessary to move a product from the
producer to the consumer
What Is a Market?
Buyers
Sellers
What Is a Market?



A market is made up of buyers & sellers
Buyers are people who need or want a
product or service and have the money
to buy it
A market must also have sellers who are
willing & able to produce goods &
services for sale
Two Types of Markets
Input market


The input market
includes items like
metal, fertilizer, seed &
wood
These types of products
are purchased by
producers
Product market



This is the market where
final products are sold to
consumers
Eggs and potatoes from
farms
Shoes from shoe stores
Types of Agricultural Markets
Input markets
Product markets
Supply and Demand



The price of a product is determined by
the value that buyers place on the product
When many buyers want a certain product
the price will be higher
If few buyers want a product the price will
be lower
Supply and Demand
Low quality
High quality
Agricultural Marketing
Agricultural marketing generally means the
marketing of agricultural products to the
first handler.
In
macro (social) perspective, is the
performance of all business activities
involved in the forward flow of food and
fiber from farm producers to consumers.







It includes all the activities associated
with
agricultural production and with
food,
feed, and
fiber assembly,
processing, and
distribution to final consumers,
including analyses of consumer’s needs,
motivations,
and
purchasing
and
consumption behavior.
Agricultural marketing covers the services involved
in moving an agricultural product from the farm to
the consumer.
Numerous interconnected activities are involved in
doing this, such as
Planning production,
Growing and harvesting,
Grading,
Packing,
Transport,
Storage,
Agro- and food processing,
Distribution,
Advertising and sale.
Agricultural marketing
circle



1 First circle: Refers to the final
consumer or targeted customer.
2 Second circle: Factors that can be
controlled known as marketing mix
(product, price, place, and promotion).
3 Third circle: Environmental factors
that cannot be controlled (political and
legal, economic, law and regulation,
social & culture, technologies, &
demographic).
Agribusiness
marketing:
Agribusiness marketing has come to mean
the marketing operations from the first
handler to the final consumer-beginning
with suppliers to farmers and covering
producing, processing, and marketing to
the final consumer.
Marketing utility:

Utility will refers to the value of
marketing which adds to goods and
services.

The marketing function will allow to
create utility. There are five types of
utilities, namely;

Form utility: To change the raw
materials to finished products .For
example, palm oil bunch to edible
cooking oil.

Time utility: Making the products is
available during the convenient hours.

Place utility: Making the products and
services available in convenience location
and place.

Possession
utility:
Making
the
exchange of goods and services between
the buyers and sellers.

Information utility: To inform the
buyers that the products exist, how to
use it, the price and other related
information of the products availability.
Difference between Market and
Marketing
Marketing Philosophies
The five marketing philosophies help
determine the management of marketing.
 Companies approach and conduct business
in different ways in order to achieve their
organizational goals.
 The five competing concepts by which
companies are guided in their marketing
efforts are:

The Production Concept
Kotler has defined the production concept as a
philosophy that holds consumers who will favor
those products that are available and highly
affordable and therefore management should
concentrate on improving production and
distribution efficiency.

The Product Concept
The product concept as defined by Kotler
holds that the consumer will favor those
products that offer the most quality,
performance and features and therefore the
organization should devote its strategy to
making continuous product improvement.

The Selling Concept
Kotler has defined the selling concept,
which says that the consumer will not buy
enough of the organization’s product unless
the organization undertakes substantial
selling and promotion efforts.

The Marketing Concept
The marketing concept as defined by
Kotler is that the key to achieving
organizational goal is for the organization to
determine the needs and wants of the target
market and to adapt itself to delivering the
desired satisfaction more effectively than its
competitors. The product concept and the
selling concept have given way in many
successful firms to the marketing concept.

The Societal Marketing
Concept
Kotler has defined that the societal
marketing
concept
holds
that
the
organization’s task is to determine the needs,
wants, and interest of target markets and to
deliver the desired satisfaction more
effectively and efficiently than competitors in
a way that preserves or enhances the
consumer’s and society’s well-being.

Importance of agricultural
marketing:
1.Marketing plays an important role
in society.
The total population of Bangladesh exceeds
16 crore people. Think about how many
transactions are needed each day to
feed, cloth, and shelter a population of
this size.



The number is huge. And yet it all works
quite well, partly because the welldeveloped Bangladeshi economic system
efficiently distributes the output of farms
and factories.
Marketing makes food available when we
want it, in desired quantities, at
accessible locations and in sanitary and
convenient packages and forms (such as
instant and frozen foods).
2.Marketing is important to
.
business
 The
fundamental objectives of
most business are survival,
profits, and growth.
 Marketing contributes directly to
achieving these objectives.
 Marketing includes the following
activities, which are vital to
business organizations:
 assessing
the wants
and
satisfactions of present and
potential customers, designing
and
managing
product
offerings, determining prices
and pricing policies, developing
distribution
strategies,
and
communicating with present
and potential customers.
3.Marketing offers outstanding
career opportunities.

Marketing offers great career
opportunities in such areas as
professional
selling,
marketing
research, advertising, retail buying,
distribution management, product
management, product development,
and wholesaling.

Marketing career opportunities also
exist in a variety of non-business
organizations, including hospitals,
museums, universities, the armed
forces, and various government and
social service agencies.
4.Marketing affects our life every
day.


Marketing plays a major role in our
everyday life. We participate in the
marketing process as a consumer of
goods and services.
About half of every dollar we spend pays
for marketing costs, such as marketing
research,
product
development,
packaging,
transportation,
storage,
advertising, and sales expenses.

By
developing
a
better
understanding of marketing, we will
become
a
better-informed
consumer.
We
will
better
understand the buying process and
be able to negotiate more
effectively with sellers.
THE MARKETING PROCESS



The business activities involved in the
flow of goods and services from the point
of initial production until they reach the
ultimate consumer,
two essential characteristics of the
process become evident.
First, the marketing process is one of
movements, it is a series of actions and
events that take place in some sequence.


Second, some form of coordination of
this series of events and activities is
necessary if goods and services are to
move in some orderly fashion from the
hands of producer into the hands of
consumers.
Figure 1 brings more clearly into focus
some of the more pertinent aspects of
this marketing process.
FARM PRODUCT
Laws and
Government
Policies
Cus
tom
s
and
Val
ues
Domestic and
Global Economy
The food marketing system
Firms, Organizations
Products flows, Distribution Channels
Management and Marketing Activities
Pricing and Exchange
Scie
nce
and
Tech
nolo
gy
Competition
Consumer Tastes
Infrastructure(transport
, communication,
FOOD PRODUCTS and Preference
education, etc.)
Fig: The changing food market system



It shows the agricultural marketing
system starting with the farmer.
The nature and way in which this
production is initially offered to the
marketing system has a major influence
on the organization and operation of the
system itself.
At the same time, the dynamics of the
marketing process may have a direct
influence on agricultural production.



A good example of this two way flow of
effects can be seen in the dairy industry.
The extreme perishability and bulkiness
of milk once required a costly assembly
system of trucks picking up the milk in
cans at the farm each day.
However, the invention of large cooling
tanks to provide storage for milk on the
farms, combined with the development
of bulk tank trucks, provided another
possible assembly method.

Because this method required large
equipment investments, the small dairy
farmer was at a disadvantage.

Hence, then, was a marketing technology
that encouraged the reorganization of
dairy farms into larger, more specialized
units.




At the other hand of the sequence of
marketing activities is the consumer.
Here again the path of influence is a twoway one.
Certainly
consumers
preference
and
behavior dictate to a major extent the
activities of the marketing process.
Similarly, marketing firms expend a great
deal of effort in trying to influence and
change consumers behavior and wants to
the marketers advantage.



Between these two forces
The agricultural producer and
The consumer is the marketing system.

This complex systems is composed of
business firms engaged in physical,
technological, and economic activities
and run by managers who make the
necessary decisions and direct people.

Another part of the food marketing
system is made up of firms and
organizations whose activities contribute
to the pricing of food products.



And
to
establishing
the
various
arrangements, contacts, and procedures
that will ensure an orderly and
purposeful flow of goods and services.
The economy is highly integrated into the
global economy and impacted by world
trade patterns, foreign exchange rates,
political and world economic events.
Today's marketing student and manager
must understand the complex economic
interrelationship of these economic
systems.

Science and technology are also major
influences on the food system.

Food production is increasingly becoming
industrialized and new technologies in
food
processing,
packaging,
and
marketing have given rise to new
products, companies and industry.

Technology has become a powerful
engine of change in the food industry.



Food consumer and their wants and
needs are also reshaping the nature of
the food system.
Today's consumer demands increasingly
diverse, healthy, conveniently prepared,
and economical food products.
As food production and marketing have
become more customer-driven, the
relationship between food producers,
processor, and marketing firms have
changed.

Today's successful food marketing
manager must understand and anticipate
the needs and wants of consumers.
Market research is key to this success.

A complex food industry cannot exit
without well developed transportation,
communication and educational systems.

Competition is a major influence on the
organization and behavior of the food
industry.

Through their attempts to improve
profits, satisfy consumers, and gain a
competitive edge, food producers and
marketing firms continually search for
new and different ways to market their
products.



Some of these innovations succeed and
others fail, but the competitive process is
never quiet for long and is a frequent
source of market change.
The behavior of the marketing system is
also limited by the rules, customs and
values of a society.
A marketing system cannot function well
without laws, courts and policies to
promote the public interest.