Unit 34Marketing in Agriscience

Determine the strategies and procedures for marketing

agricultural commodities to maximize profits.

Introduction

• Factors when marketing agriscience products– 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– 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– 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

Science Profile

• How much will you pay for improved health?– University of Purdue study: people willing to pay more

for health-promoting genetically modified (GM) food– Consumers will pay a greater price: benefit understood– Marketing shift: inform consumers of personal benefits

providing incentive to buy

Commodity Pricing

• Pricing approaches– 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

Agri-Profile

• Career areas: auctioneer/co-op manager/dealer/grower/packer/grader/meat cutter/produce manager/communications specialist– Agricultural products: production, processing,

marketing, and related activities: year-round basis– Training for careers: technical schools, colleges, or

universities– Areas: plant and animal sciences, food science,

agricultural economics, marketing, or communications

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

Science Connection

• Rainbow cottons, high-tech leather, and biodegradable detergents– New products: created through agriscience research– No-wrinkle cotton fabrics: new colors– Leather: tanned with less-polluting methods– Detergents: biodegradable ingredients–animal fats

Wholesale Marketing (cont’d.)

• Other techniques– 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.

Grades and Market Classes of Animals

• Cattle– Calves– Cattle

• Swine– Feeder pigs– Slaughter hogs

Grades and Market Classes of Animals (cont’d.)

• Sheep– Lambs– Yearlings– Sheep

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– 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– 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