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 Product market
 The input market  This is the market where
includes items like final products are sold to
metal, fertilizer, seed & consumers
wood  Eggs and potatoes from
 These types of products farms
are purchased by  Shoes from shoe stores
producers
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
o agricultural production and with

o food,
o feed, and
o fiber assembly,
o processing, and
o 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
 First circle: Refers to the final consumer or
targeted customer.
 Second circle: Factors that can be controlled
known as marketing mix (product, price, place,
and promotion).
 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 Trinidad exceeds
1 million. 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 well-
developed TT 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
Domestic and
Global Economy
Laws and
Government
Policies
Cus Scie
tom The food marketing system nce
s Firms, Organizations and
and Products flows, Distribution Channels Tech
Val Management and Marketing Activities nolo
ues Pricing and Exchange gy

Competition
Infrastructure(transport, Consumer Tastes
communication, FOOD PRODUCTS and Preference
education, etc.)
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 two-
way 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.