Agricultural Marketing

Agriculture MarketingThe 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 MarketsInput 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 well-developed 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

The food marketing systemFirms, OrganizationsProducts flows, Distribution ChannelsManagement and Marketing ActivitiesPricing and Exchange

Laws and Government Policies

Domestic and Global Economy

Science and Technology

Consumer Tastes and PreferenceFOOD PRODUCTS

Customs and Values

Competition

Infrastructure(transport, communication, 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 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.