AGR MKTG - Review
AGR MKTG - Review
MODULE 1
AGRICULTURAL MARKETING
Prepared by:
CMBT FACULTY
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FOREWORD
This module on Agricultural Marketing was made for pandemic virtual class
only since face to face modality of learning is apparently not permitted by the
government for the time being, This module 1 focused on four learning unit. For each
unit, an online activity to be accomplished by the students.
RPB
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TABLE OF CONTENT
Page
Foreword 2
Unit I Agricultural Marketing 4
Functionaries in Agricultural Marketing 5
Agricultural Marketing Explained 6
Functions of Agricultural Marketing 7
Importance of Agricultural Marketing 8
Unit II The Marketing Concept 11
Essential Steps for a Successful Strategic Marketing Process 13
Marketing Mix 21
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Definitions | Descriptions
Terminologies | Titles
Topic | Important 3
Examples
The second concept of marketing refers to the activities that are done by the business
organizations to promote their products and services to their targeted customers. In
marketing the targeted customers can be attracted and maintained by creating strong
customer values for them in the organization. It is possible through, effective market
survey, market trending, better customer service and satisfaction, customer focus and
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continuous follow up. The concept agricultural marketing includes many activities
starts from production process till its retailing.
• Primary market
• Secondary market
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Farm’s marketing.
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"Final Consumer"
It consists of First circle. Refers to the final consumer or targeted customer.
Controllable Second circle. Factors that can be controlled known as marketing mix
(product, price, place, and promotion).
Uncontrollable 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. From the supplier to the Final consumer
AGRO MARKETING AND AGRO MARKETING SYSTEM
Agro marketing has a complex system that requires regulation and
management. An agricultural enterprise is not self-supporting, so there is a constant
exchange of resources and information between it and the surrounding marketing
environment. The very fact of its existence and further survival depend on the
influence of the environment. To continue its operation, the agricultural enterprise is
forced, on the one hand, to adapt to changes in the external marketing environment,
and on the other hand to influence it by virtue of its capabilities by developing various
agricultural marketing campaigns. The agro marketing system includes a set of the
most significant market relations and information flows that connect the agricultural
enterprise with the markets for its products.
• Concentration
• Grading
• Processing
• Warehousing
• Packaging
• Distribution
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Grading is the process of segregating the huge amount produce into different
categories on the basis of variety, quality, size, etc. This can help to establish
standards for those produce.
Processing: It is the stage where the farm products are transformed into
consumable products. For example: paddy into rice processing.
• Creation of utilization
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Product Quality: Some of the farmers are not aware of the need for quality
seeds and fertilizers. The poor quality seeds and fertilizers used in land will result in
poor product quality.
Lack of Transportation Facility: Many of the rural areas don’t have proper
road facility. This creates barrier in transporting the agro produce to the market
place. Inadequate Storage Facility: The inadequacy of storage facility may leads to
unwanted wastage of products.
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up in a love affair with their product and do not realize what the market
needs. Management might commit the “better-mousetrap” fallacy, believing that a
better mousetrap will lead people to beat a path to its door.
The Selling Concept. This is another common business orientation. It holds
that consumers and businesses, if left alone, will ordinarily not buy enough of the
selling company’s products. The organization must, therefore, undertake an
aggressive selling and promotion effort. This concept assumes that consumers
Show buying
typically sho9w buyi8ng inertia or resistance and must be coaxed into buying. It also
assumes that the company has a whole battery of effective selling and promotional
tools to stimulate more buying. Most firms practice the selling concept when they
have overcapacity. Their aim is to sell what they make rather than make what the
market wants.
The Marketing Concept. This is a business philosophy that challenges the
above three business orientations. Its central tenets crystallized in the 1950s. It
holds that the key to achieving its organizational goals (goals of the selling company)
consists of the company being more effective than competitors in creating, delivering,
and communicating customer value to its selected target customers. The marketing
concept rests on four pillars: target market, customer needs, integrated marketing
and profitability.
SALES CONCEPT 1. The Sales Concept focuses on the needs of the seller. The Marketing Concept
1.Seller's need.
2. Product into cash. focuses on the needs of the buyer.
MARKETING
CONCEPT
2. The Sales Concept is preoccupied with the seller’s need to convert his/her
1. Buyer/Consumer's
need. product into cash. The Marketing Concept is preoccupied with the idea of satisfying
2. Idea of giving
satisfaction to the the needs of the customer by means of the product as a solution to the customer’s
customers by means of
product that serves a problem (needs).
solution to the
customer's need.
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The strategic marketing process is a deliberate series of steps to help you identify and
reach your goals. Even more, you’ll discover what your customers want and develop
products that meet those needs. Here are the steps to a successful strategic marketing
process.
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1. Mission
2. Situation Analysis
3. Marketing Strategy/Planning
4. Marketing Mix
5. Implementation and Control
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Clear and concise Mission: Apple is dedicated to making innovative, high-quality products.
Identifying strengths Situation Analysis: Apple’s competitive advantage is driven by its commitment to
and weaknesses as
well as advantages of understanding customer needs, focusing on the products that are core to its mission,
your company to the
other competitors. and fostering a collaborative work culture.
Heavily relies on your Marketing Strategy: Apple usually is first to the marketplace with new products and
strengths.
the company relies on brand loyalty from existing customers as a strategy when
launching new products and services.
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Marketing Mix: While Apple offers a range of products, it values premium pricing
and relies on strict guidelines for distribution.
Complements Implementation and Control: Each Apple product complements the others and
other product and
effectively blend work within the same ecosystem, so customers tend to stay with the brand, creating
to other products
in the market. loyal consumers.
The strategic marketing process puts all the pieces together so that everything you
do contributes to the success of your business. Rather than executing haphazard
activities and ideas, developing a solid plan that weaves goals and tactics into a
seamless experience is essential. You can follow these steps to create products and
services that will delight your customers and beat out your competitors.
First, identify and understand the company’s mission. Maybe it’s written down and
It highlights your
company's goal and promoted throughout the organization. If not, talk to stakeholders to find out why
objectives.
your company exists. A mission statement explains why a company is in business
and how it can benefit consumers. Sometimes, the mission statement is aspirational,
motivating staff and inspiring customers. Or it is simply a straightforward statement
about who you are. Either way, you can’t plan a marketing strategy without knowing
clearly what business you are in and why.
Here are some example mission statements:
IKEA: At IKEA, our vision is to create a better everyday life for many people. Our
business idea supports this vision by offering a wide range of well-designed,
functional home furnishing products at prices so low that as many people as
possible will be able to afford them.
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The mission statement is a core message that guides and influences your marketing
strategy. Questions to ask when evaluating the mission:
The second step of the strategic marketing process is to evaluate internal and external
factors that affect your business and market. Your analysis will illuminate your
strengths and the challenges you face — either with internal resources or with
external competition in the marketplace. Situation analysis provides a clear, objective
view of the health of your business, your current and prospective customers, industry
trends, and your company’s position in the marketplace.
There are several methods to conduct this analysis. A typical analysis is called a SWOT
analysis: strengths, weaknesses, opportunities, and threats.
Strengths and weaknesses are internal factors, under your company’s control. What
do you do well? What needs to be better? Opportunities and threats are external
factors, such as interest rates or a new competitor in the market. Here are some
questions that can help you identify internal and external factors:
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• Strengths: What do you do well? What are the factors that you control? What
is your competitive advantage? How are your products and services superior
to others in the marketplace?
• Weakness: Where are you underperforming? What is limiting your ability to
succeed? Where do limited resources affect your success?
• Opportunities: What are untapped markets? Where is the potential for new
business? Can you take advantage of any market trends?
• Threats: What are the obstacles? Which external factors (political,
technological, and economic) can cause a problem?
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storage, or brokerage, is greater than the costs of performing those functions. These
basic principles of marketing may seem simplistic; however, they are the
fundamental concepts upon which vertical expansion of farming into marketing must
be built.
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for a product, taking it out of direct competition with other products. The greater the
differentiation, the greater the potential for profits. Products that have few good
substitutes may command a substantial price premium over less acceptable
alternatives. However, consumers will not pay much more for a product that has
many good substitutes than they will pay for the substitutes.
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MARKETING MIX
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mass produced tangible object are the motor car and the disposable razor. The
product aspect includes individual goods, product lines or service features and
benefits that meet consumer wants and needs as identified through market
research.
3. Price: The price is the amount a customer pays for the product. It is
determined by a number of factors including market share, competition,
material costs, product identity and the customer's perceived value of the
product. Setting a price that serves the customer well and maximizes
justifiable profits to the company is important. Issues relevant include price of
the product, level pricing, introductory pricing, discounts, allowances. Again,
this is established in relation to consumer willingness to pay as identified via
market research.
4 Elements of Promotion: 4. Promotion: represents all the communications that a marketer may use in the
1. Advertising
2. Public Relations marketplace. Promotion has four distinct elements: advertising, public
3. Personal Selling
4. Sales Promotion relations, personal selling and sales promotion.
If the Product, Price and Place are in sync with what consumers want/need,
Promotion reminds them the needs-satisfying Product/Service is available.
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• Acreage
• Distinction between acres owned vs. operated vs. owned and operated
If you’re gathering data from surveys, not only will you be able to obtain this
level of detail, but there are severe weaknesses in surveying as a source of objective
data. Here are some ways you can ensure that you’re gathering data from a reliable
source:
Accuracy. Does the data accurately depict who the farmer is, how large their
operation is, what they’re farming, and the events impacting them and their
bottom line?
Coverage. How much of the market does the data cover? Is it enough to
provide helpful insights on the market as a whole? Can you use it to expand
beyond who you currently are marketing to?
Detail. How granular does the data go? Can you access details about individual
growers, farm operations, and field? Make sure you have enough details both
on farmers and on the market overall to make critical marketing decisions,
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develop impactful segments, and craft messages that are highly specific and
contextual to the farmer’s current needs.
Recency . How frequently does your source update the data? How
frequently are they able to update it? Data that hasn’t been reliably updated
since 2008 isn’t going to get you very far. Make sure you have a source that
updates annually or more.
Once you’ve acquired detailed marketing data, you can take the next steps to
implementing your marketing strategies for agriculture products.
After you’ve gathered the data, it’s time to put it to use by using it to create
highly specific messages to farmers. That’s where segmentation of your market by the
demographics we listed above is going to help.
State Growers
Illinois 120,390
Indiana 82,819
Michigan 107,015
Ohio 79,726
Wisconsin 77,922
Iowa 113,209
Kansas 73,628
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Minnesota 93,359
Missouri 62,455
Nebraska 68,003
But you can segment the market even further than that. You don’t just want to target
areas with large numbers of growers but large numbers of growers with large farms.
Using the data at your disposal, you can segment and select the operations with the
largest number of operations farming 500+ acres of Corn/Soy:
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Grand Forks,
347 187
ND
Sioux, IA 325 97
You can continue drilling down into these segments which, while small, ensure
that you can target the farmers who are most likely to do business with you.
Once you take the time to develop your segments, you can then focus your
messaging and product offer on those specific growers. If you have a product that
works for smaller farms and one for larger farms, market differently to those two
segments. But even if you’re marketing the same product to multiple segments, the
use case and specifics in the message are going to be different.
The goal is to communicate the right message at the right time to the right
grower. Segmentation combined with custom messaging helps you do that, and you’ll
see increased conversion rates and ROI as a result.
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But if you’ve taken the time to develop segmented audiences of farmers and
messages for each of them, then you need to market in such a way that you’re reaching
them directly. The primary advantage of data-targeted, omni channel marketing is
that you specific growers, not channels.
Email. Place a message directly in your farmers’ inbox. Email is still a high-ROI way
to communicate with farmers.
Direct mail. While direct mail is growing less common in other industries, a lot of
farmers respond to receiving marketing messages in the mail. Go ahead and use this
channel as one of your many marketing channels for added visibility and impact.
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familiarity and trust with them through consistency and a powerful message that
entices them to find out more.
The agricultural sector is one of the most important parts of any economy. An
efficient, well-maintained agriculture sector leads to overall economic benefits. In the
last decade, digital technology has risen to be one of the most crucial marketing
platforms. With the potential clients surfing the internet, it is paramount to advertise
and navigate through various social media platforms, to get them to notice your
services. With the modern agricultural revolution and the improvement and
transformation in technology, agriculture marketing has reached a much higher level.
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Each farm has a mix of operations which serves market forces it caters
to: The agricultural industry is full of a diverse array of agricultural operations
niches—types of produce they grow and livestock they rear. Each farm has its own
unique mix of operations, with its own subset of vendors, levels of government
support, and consumer segments it supports. This is indicated below in the customer
segments row.
Each farm has a scale of operations it geographically caters to: The scale
of operations further distinguishes customer segments not only in terms of farm
operations but what vendor products, services, equipment, financial support, and
government regulations they will need or encounter. This is indicated in the above
table 1: Industry Stakeholders, in the Scale of Operations column. The table segments
five characters of agricultural operations scale. It starts with consumers such as
hobbyist gardeners; expanding outward toward locally supported small farm
operations, mid-level regional operations, large interstate producers, and finally
multinational operations. In all there are five farm operation scales based mainly on
the vastness of the geographic markets they cater to.
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But people also use a vast array of agricultural products every day for other
reasons, ranging from the clothes we wear to the paper we write on. We decorate
with flowers often produced by agriculture and run our cars in part on ethanol
produced by agriculture. We also use agricultural products to make plastics. As
technology advances at breakneck speed, new uses for agricultural products will
continue to expand.
Agricultural products fall into one of four groups: foods, fuels, fibers, and raw
materials:
1. Food: Grains and cereal crops are grown on more than half the world's farmed
acreage, according to the U.S. Department of Agriculture (USDA). But food
agriculture crops encompass more than just cereals like wheat and corn. Meats
and dairy products like milk also are agricultural food products, as are honey
and farmed fish.
3. Fibers: Fiber crops include cotton (one of the top 10 crops produced in the
U.S. every year), wool, and silk. Agricultural producers also use hemp to make
rope and flax for linen. It's even possible to use bamboo fiber to make cloth.
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The fact that the government certifies and oversees only organic agricultural
products that are marketed for consumption creates some problems in the organic
product marketplace. For example, organic body care products are not always made
with 100% of agricultural products.
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product that ultimately will be sold at retail. The agricultural production process
begins when you purchase or breed a qualifying animal or prepare the soil for
planting crops. The process ends when you place the livestock or crops (packaged or
unpackaged) into finished good inventory, or your grain is sellable or at the stage that
it can be commingled.
• Breeding operations
• Ranches
• Tree and sod farms (if products are sold at retail and not installed by the
grower)
• Storing or preserving raw materials before the start of the production process
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With so many different advertising options out there for agricultural buyers
and suppliers, we thought we’d take a look at them all, group them up and tell you the
pros and cons of each one.
Print media
Cons: This isn’t the cheapest option and you will need to think about how you
can make your advertising stand out from the crowd so people will pay attention.
Classifieds:
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Cons: If you are trying to sell a product that isn’t particularly recognizable, or
isn’t very glamorous, your advert may be a little overshadowed by some of the more
appealing bits of farm machinery on sale.
Face to face
Pros: You can get your product right in front of the customer – if your product
is something that needs to be demonstrated to be understood, this might be the best
course of action. This relies on your ability to sell your product and you know
immediately if your tactics have worked.
Cons: If you, or your employees are not particularly strong sellers, then you
may struggle to get the best out of this. Face-to-face events also need investment over
above purchasing stand space and manning it. For example, you must make up
banners, flyers and other sales collateral to make an impact.
Internet
Cons: If your audience is a more traditional one, you may struggle to find the
correct audience through traditional online channels. Other online methods (such as
E-newsletters) however, appear to be very effective in attracting the more traditional
audience.
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Radio
Social media
Cons: While social media can be extremely effective, it also requires a lot of
input – in order to get the most out of it you are required to be active members of
your social channels, as well as continuously generating new content. Social media
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accounts that only publish adverts are extremely off-putting. Getting it right is time-
consuming.
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This discussion will break large-scale Philippine agribusiness players into the
following categories:
▪ Large landowners.
▪ Large tycoons who COULD get into foods if they wanted to, but currently don’t
plow in that field.
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These companies are huge players the Philippine food production and
packaging business:
▪ Lucio Tan Companies. Lucio Tan is a Chinese entrepreneur who made it big
time in the Philippines. He directs a lot of businesses and many of them grow
or get stuff from the ground, from the farms. Here are his food-related
companies: (1) Foremost Farms Inc (hogs), (2) Lotte Philippines
(confectionaries), (3) Asia Brewery, Inc. (beer), (4) Tanduay Distillers, Inc.
(alcoholic beverages), and (5) Fortune Tobacco Corporation (cigarettes).
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from 2008 to 2010, then sold it to finance diversification. One element of the
diversification is into palm oils, where partner Kuok is looking for a large
growing field.
Who is growing all the foods? We don’t have names for the growers. Growing
is done primarily under contract, privately, and there are thousands of suppliers.
Here is the San Miguel’s Magnolia Chicken contract growing application. And
the Monterey Meats hog contract growing application. Presumably something similar
exists for grains and other crops, however, those examples have avoided your trepid
inquirer.
▪ Dole Philippines. US based Dole Food Company “Dole sources bananas, fresh
pineapples, asparagus, mangoes, papaya and other fruits and vegetables from
the Philippines . . . ” and other Asian countries. The Dole farming subsidiary in
Davao is named “Stanfilco”. Dole has stood for years as a poster-child for bad
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corporate behavior among leftists and human rights critics. The parent
company’s sales were US $7 billion in 2011; net income was only US $ 42
million, off of a loss in 2010. The company has received a purchase offer
from David H. Murdoch, who already owns substantial shares. Financial
information about the Philippine operation is unknown at this point. It
appears that the company employs from 15,000 to 20,000 permanent and
temporary workers.
▪ First Pacific Company. The ownership of First Pacific is well known in the
Philippines. The Manuel V. Pangilinan Companies are everywhere (telephone
companies [Pacific Long Distance Telephone Company- PLDT, Sun, Smart],
educational institutions, real estate and infrastructure development and
mining). Hong Kong based First Pacific holds his investments in PLDT, Philex
mining, Metro Pacific (infrastructure projects), and Indofoods. Indofoods is
the farming company growing predominantly in Indonesia. It is likely to
become a main player in the Philippines growing and exporting palm products.
Therefore, it is akin to Dole, an outside company that will probably thrive on
the rich Philippine soil. Sales of First Pacific in 2012 were just shy of US $6
billion. Net income was US $830 million.
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Contract growing
These are companies that deal foods to consumers. They have tremendous
clout in the Philippine marketplace because they buy in huge quantities. They have
choices: buy Filipino products or buy U.S., Asian or other imported products.
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Large landowners
This is the big mystery that emerges from this analysis. The huge agribusiness
firms do very little of the primary growing. They rely upon product supplied by
independent growers, or growers under contract. Who the landowners are remains
largely unknown, other than that one peculiar and controversial case:
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Here are the richest players in Philippines right now who have no food or
farming interests.
▪ D&L Industries, Inc DNL Products for the food (oils and fats), plastics, and
aerosol industries; packaging.
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▪ Roxas and Company, Inc RCI Real estate (raw land) and “sugar related assets”.
▪ San Miguel Brewery, Inc SMB San Miguel operates five breweries in the
Philippines.
▪ San Miguel Pure Foods Company, Inc PF and PFP The foods group of San Miguel
merged with Pure Foods acquisition in 2001.
▪ Swift Foods, Inc SFIP and SFI The chicken company that turned to God.
▪ Victorias Milling Company, Inc VMC Victorias City, Negros Occidental. Sugar.
▪ Vitarich Corporation VITA Feeds: fish, poultry, hogs, specialty. 2012 sales 3
billion; profit 114 MM
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REFERENCES
https://mohdhafezan.files.wordpress.com/2016/01/chapter-1.pdf
https://jgdb.com/business/marketing/types-of-marketing/what-is-
agricultural-marketing
https://www.smartsheet.com/strategic-marketing-processes-and-planning
https://medium.com/@cvmgdigitalmarketing/how-to-develop-a-successful-
agriculture-marketing-plan-cc6c6746b4bf
https://agrowbase.wordpress.com/target-market/
https://www.thebalancesmb.com/what-is-an-agricultural-product-2538211
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