Transcript Unit 34 Marketing in Agriscience

Unit 34
Marketing in Agriscience
Determine the strategies and
procedures for marketing
agricultural commodities to
maximize profits.
Introduction
• Factors when marketing agriscience
products
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Product demand
Product supply
Market types/availability in the area
Similar products: competition
Intended consumers’ buying power
Demand: seasonal variations
Introduction (cont’d.)
• Basics of profitability: supply and demand
• Supply
– Product availability at a specific time and price
– Impacted by the number of people producing the
product in the area
• Demand
– Product quantity/amount wanted at a specific time and
price
– Determined largely by price
Focus on Consumers
• Consumer demographics: categories of
information about consumers or potential
consumers
Consumer Demographics
• Marketing agriscience products: demographic
categories of interest
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Population density
Ethnic makeup of the population
Family income
Discretionary money held by family individuals
Family size
Eating preferences
Consumer Demographics (cont’d.)
• Marketing agriscience products: demographic
categories of interest
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Who makes buying decisions in the household?
Occupation and work locations
Tendencies to eat at home or away
Clothing preferences
Recreational preferences
Advertising and Promotion
• Any form of non-personal product or
service presentation
• Must be coordinated with other marketing
techniques
• Advertising types
– Product
– Institutional
Advertising and Promotion
(cont’d.)
• Product displays: stores and other retail
outlets
• Displays and sales of machinery, animals,
food, flowers, landscape designs, and other
goods/services: fairs, shows, open houses,
trade shows, and professional meetings
• Free samples: fairs, public auctions, etc.
Project
• Divide into groups of 2-3 students.
• Each group design a new marketing
campaign for a locally produced agricultural
product.
• You can select to design a commercial with
a script, a brochure, a poster, etc.
• This must be creative, unique, and
professional!!!
Commodity Pricing
• Producer may have little control: supply or
price
• Producer-owned marketing cooperatives
– Negotiate price on large-volume basis
– May have processing facilities: process and hold fresh
commodities for better prices
Commodity Pricing
• Pricing approaches
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Psychological
Penetration
Skimming
Loss-leader
Prestige
Marketing Strategies for
Maximizing Profits
• Determine types of markets available
• Determine costs of various types of
marketing
• Determine transportation costs to market at
each of the available markets, and sell
where transportation costs are favorable
Marketing Strategies for
Maximizing Profits (cont’d.)
• Determine the most profitable marketing
form for the product
• Advertise to create new markets
• Market product at the peak of demand:
seasonal commodities
Retail Marketing
• General principles
– Selling directly to consumers
– Ready-to-eat products
• Retail marketing locales
– Farms
– Roadside markets
– Farmers’ markets
Wholesale Marketing
• Marketing through a middleman
• Types of wholesale marketing
– Terminal markets
– Auction markets
– Direct sales
Hot Topics in Agriscience
• Online video merchandising
– Allows buyers at different locations to bid in a
competitive auction for a product they have viewed on
video
– Popular method for selling livestock
– Requires trust between the buyer, the seller, and the
on-site evaluator: product quality represented
accurately
Wholesale Marketing (cont’d.)
• Other techniques
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Cooperatives
Vertical integration
Bartering or trading
Cash sales
Marketing Fees and Commissions
• Vary widely
• Livestock sales: fee for each animal
according to size
• Purebred livestock sales: up to 10 percent of
selling price
Marketing Fees and Commissions
(cont’d.)
• Yardage fees: apply at terminal markets
• Pencil shrink: assessed for slaughter
animals for weight loss in transportation
• Commodities’ sales fees: percentage of
gross amount
Marketing Procedures
• Always handle live animals quietly and
carefully.
• Move animals when temperatures are
moderate.
• Do not overcrowd animals on trailers or in
lots.
Marketing Procedures (cont’d.)
• Do not overfeed animals just before
hauling.
• Do provide ample fresh, clean water.
• Avoid injuring or bruising animals when
loading and unloading.
Marketing Procedures (cont’d.)
• Sort animals according to sex and size
before shipping to market.
• Precondition animals for several days
before marketing them.
Marketing Trends and Cycles
• General price cycling causes
– Supply and demand
– Government intervention
• Price cycles interrupted, accelerated, or
delayed: disasters or political events
Trends and Cycles in Animal
Markets
• Factors influencing livestock prices
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Importation and exportation of livestock products
Development of new uses for livestock products
Increased advertising of livestock products
World weather conditions
General economic conditions in the world
Changes in consumer demands
Trends and Cycles in Crop
Marketing
• Factors contributing to availability of food
and fiber commodities
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Highway transportation system
Air shipping
Refrigerated shipping
Food-processing procedures
Storage facilities
Marketing system
Global Marketing in Agriscience
• Factors influencing marketing changes
– Modern communication devices: telephones, radios,
televisions, fax machines, computers, etc.
– Increasing number and types of middlemen
The Agricultural Commodity
Futures Market
• Commodity exchange
– Organization licensed to manage the process of buying
and selling commodities under specific laws using a
system of licensed brokers
• Futures market
– Procedure conducted by commodity exchanges to
provide networks and legal frameworks for sellers and
buyers to work through brokers in making futures
The Agricultural Commodity
Futures Market (cont’d.)
• Important to buyers and sellers
• Activities
– Buying and selling futures
– Opening a position
– Offsetting a position
Export Marketing
• U.S. market
– Exports large amounts of agricultural products
– Increased imports of agricultural commodities: not as
fast as exports
• Advances making the world smaller
– Increased travel abroad
– Delegations: working to render goodwill; promote
professional linkages; and develop markets