Agricultural Marketing: A Usaid/Cnfa Training Production in Partnership With

Agricultural Marketing
A USAID/CNFA Training Production in Partnership With National Federation of SCACs
Agriculture Marketing
The bridge that links producer & consumer
Agricultural Marketing Training Program
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 includes items like metal, fertilizer, seed & wood These types of products are purchased by producers
This is the market where final products are sold to consumers Eggs and potatoes from farms Shoes from shoe stores
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
Four Important Questions

What is the current situation? Where do we want the situation to be? How can we get from where we are to where we want to be? What is/will the operating environment be like?
How Can I Add Value?

Simple vegetables Pre-packaged vegetables
Production
The goal is to add value through effective management:
Inputs (Resources) Labor
Production
Vegetables Value Added Dairy products Other
Equipment
Operating inputs
A Value Chain
Input supplier Equipment supplier Customer
Farmer
Retail Sales Exporter
Wholesaler Cooperative
A Value Chain
Farmer
A Value Chain
Farmer
Identifying a Market
Those who wish to sell products identify potential target markets for their products. Once a potential market is identified, research is done to find out the wants & needs of the consumers in that particular market.
Identifying a Market
Market research includes: Surveys Questionnaires Literature Any kind of information that can be found regarding the market segment
Conducting Market Research
Market research is essential in order to identify a specific target market for your product. The ideal marketing plan contains a mix of product, promotion, advertising, price and distribution information.
Knowing a specific target market and the consumers needs within it, will increase your chances of making a profit with your product. If you dont have adequate knowledge and information about your target market you will be shooting in the dark and your chances of success will be slim.
One of the best methods of obtaining information about a particular market is to create a survey and send it out to potential customers
Designing a Survey

Ask questions that are specific to your market segment What kind of products do the customers use? Why? Where do they purchase their products? Why? What do they like about the products they buy?
Designing a Survey

What would cause them to change to another product? Are they loyal to a specific producer? How much of the product do they use daily, monthly, yearly? How do they purchase the product (bag, box, crate)?
Analyzing Market Research
After collecting your survey and other sources of data, it is time to assemble it into meaningful information.
Physical Resource Inventory

Resources Land Livestock Equipment Facilities
Physical Resource Inventory

Questions to be answered What are your resources capable of producing? What factors limit production from your resources? How can you overcome the limitations?
Financial Resource Inventory

Tools Net worth statement Budgets Cash flow statement
Financial Resource Inventory

Questions to be answered What are your financial resources? What products do your budgets indicate will be the most profitable? Will borrowing operating money be profitable? Does your cash flow indicate when you can repay a loan & interest?
Personal Resource Inventory

Skills Experience Labor Aptitude Attitude
Personal Resource Inventory

Questions to be answered Do you have the skills, experience and labor to produce good yields of quality products? Is your aptitude a limitation? Is your attitude a limitation?
Conducting a Product Analysis

Is the product a convenience or specialty item? Who uses the product? How does the product satisfy consumer needs or wants? How much does the product cost?
Conducting a Product Analysis

Where can the product be purchased? Does the product satisfy consumer needs and wants? When should the product be purchased? How should the product be used?
Customer Profile
Studying the customer allows you to target the customers interests, and lowers marketing costs Find customer wants and fill these needs Produce what you can sell, instead of trying to sell what you want to produce Love your customer, not your product
Right Product = Higher Profits

What are your customers needs & wants? What do they expect when they buy your product? The best product is the one that best fits the customers needs & wants:

Packaging Flavor Maturity
Image Price
Pricing Your Product

What is the right price for our product? Will the price cover your costs? Will the price return enough profit? Are customers willing to pay the price you need for the product to be profitable? Will the price generate adequate sales volume?
Higher prices usually result in lower sales volume and encourages competition
Market demand
Price
How does price affect profits?

Pricing considerations Product demand & buying trends Competitors prices Costs to produce and sell the product, and provide an adequate profit Marketing strategy & business goals
Developing a Marketing Plan

Introduction Analysis of the market Business proposition Action plan Budget Evaluation
Introduction

The introduction should give a brief overview of your marketing plan Include the purpose of the plan and people or organizations involved with the project
Analysis of the Market
Explain the current market situation & describe what kind of market analysis was conducted:
Surveys Interviews
Describe the potential buyers in your market.
Why would these buyers by interested in your product?
Analysis of the Market
Describe the strengths and weaknesses of your competition. Find out as much about your competition as possible. Describe the strengths & weakness of your product.

How successful is your product now? What is your products reputation with buyers? Does your product have any weakness it will need to overcome?
Business Proposition

What are you going to do? What is going to be accomplished? Identify your main planning assumptions. Assumptions are the things that you think will happen based on your market research.
Business Proposition

What is going to happen with your particular product & marketing plan? Identify your target market & products. Which market segment contains your most likely customers? What are the objectives of your marketing plan?
Action Plan
What are the specific steps you are going to take in order to carry our your marketing plan? How will you reach your marketing objectives? How will you sell the product?
Action Plan
Product positioning Product positioning refers to the niche your product will have in the market Hirtopul-Mic farmers co-op will be positioned to appeal to the younger class of Moldovan citizens who prefer higher quality potatoes that can be used in a variety of ways
Action Plan
Price Explain your pricing program How did you arrive at a price? Will there be any discounts?

Two common methods of pricing Pricing to the market Pricing to costs

Pricing to the market Compare prices with competitors Set prices that customers expect Caution! Do not under-price without knowing true costs
Cost Approach to Pricing

Price is set to recover all costs Input supplies Fixed overhead Labor Marketing costs Transportation Profit
Cost Approach to Pricing

If competitors products are available at a lower price than the cost approach price, action must be taken: Differentiate the product from the competition Adjust profit margin expectations Reduce total costs
Study the Competition

Who are they? Where are they? How many & how strong are they? Do they have one product or a variety of products? What are their terms of sale?
Study the Competition

Are their prices higher/lower than our prices? What distribution channels do they use? What form of advertising do they use? What is their reputation for service and quality?
Action Plan
Place How will the product be made available to the consumers? Where will it be sold? How will it be packaged? How will it be transported?
Action Plan
Promotion Describe your promotional and advertising program. What kinds of advertisements will be used?
Budget
Make a projected budget. Estimate sales, costs and profits. Include: Income items Expense items Profit
Evaluation
After completing the marketing plan, you should develop a strategy for evaluating what you have done. How well will the plan work? What changes could be made to improve the plan?
Drawing Marketing Conclusions

How do small businesses operate within this market? What are the current growth patterns in this market? What is the size of the market now?

What is expected a year from now? Five years from now?

Are there any niche markets that are promising? How has and will international trade impact this enterprise? How will current and new government regulations impact this enterprise? How will changes in technology impact this enterprise and the businesses within it?

What inventory, raw materials and or supplies will you need? How will you avoid potential or actual shortages? Are the prices likely to be steady or fluctuating? If fluctuating, how do you plan for changing costs?
Working Together
Working Together
Necessary for working together Trust Honesty Commitment Openness Board member responsibility to the members
Working Together
Two or more people working together to achieve individual and group goals that would be more difficult or impossible to achieve alone.
Working Together

Is the planned program consistent with your needs & goals? Does a framework exist to maximize the goals for the project or business? Is the project financially sound? Is the reachable market base large enough to provide adequate income? Has there been adequate planning to predict results?
Examples of Working Together

Provide production & market information Product marketing Input purchasing Equipment services
Working Together in Marketing
The goal is to improve profit by buying or selling in volume and the ability to access additional markets Working together requires individual farmer commitment
Working Together
May allow individual farmers to use proven technologies and efficiencies not available to the farmer individually Usually requires a formal business arrangement
Working Together
Key questions What are the goals for the joint operation? Who are the members? Do all members have the same goals? Who is the leader/champion?
Working Together
Key questions Will it lower my costs of production? Will it improve my market access? Does it fit my goals? What will be the impact on my operation?
Working Together
Potential benefits Access to improved technology Capture economies of size Improved product quality & market access Utilize otherwise unavailable production, marketing & information systems
Working Together
Limitations of working together Requires commitment of people Requires joint responsibility Loss of some degree of control Formal business procedures Increased communication requirement
Production & Marketing Contracts

A way to reduce risks associated with traditional production & marketing

Potential benefits May reduce financial risk May facilitate access to capital May allow access to improved technology May allow access to new & better markets May result in higher prices May reduce input costs

If you are earning higher returns or gaining a benefit under a contract, it is in exchange for something on your part.

Considerations Will there be increased production costs associated with contract requirements? Will you have less flexibility in how you farm? Will you loose control over pricing & marketing?

Considerations Will there be penalties for reduction in quantity marketed due to failure to meet quality standards? Will higher cost inputs be required under the contract?

Considerations Will additional equipment be required? Will the added returns be enough to cover added costs? Will the length of the contract be long enough to recover required additional investments?

Considerations Will the quality standards be well defined? What is the risk of not being paid? Is there risk of loss of performance?

Considerations Study the actual contract language, legal issues and obligations and the nature of the relationship between the parties to the contract.
When all factors are considered do the benefits out-weigh the limitations?
Its Up to You!
Whether you think you can or think you cant youll be right. Henry ford

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Agricultural Marketing

A USAID/CNFA Training Production in Partnership With National Federation of SCACs

Agricultural Marketing Training Program

Agricultural Marketing Training Program

Agricultural Marketing Training Program

Agricultural Marketing Training Program

Two Types of Markets

Agricultural Marketing Training Program

Types of Agricultural Markets

Agricultural Marketing Training Program

Supply and Demand

Agricultural Marketing Training Program

Supply and Demand

Agricultural Marketing Training Program

Four Important Questions

Agricultural Marketing Training Program

How Can I Add Value?

Agricultural Marketing Training Program

Agricultural Marketing Training Program

Retail Sales Exporter

Agricultural Marketing Training Program

Retail Sales Exporter

Agricultural Marketing Training Program

Retail Sales Exporter

Agricultural Marketing Training Program

Agricultural Marketing Training Program

Agricultural Marketing Training Program

Conducting Market Research

Agricultural Marketing Training Program

Conducting Market Research

Agricultural Marketing Training Program

Conducting Market Research

Agricultural Marketing Training Program

Agricultural Marketing Training Program

Agricultural Marketing Training Program

Analyzing Market Research

Agricultural Marketing Training Program

Physical Resource Inventory

Agricultural Marketing Training Program

Physical Resource Inventory

Agricultural Marketing Training Program

Financial Resource Inventory

Agricultural Marketing Training Program

Financial Resource Inventory

Personal Resource Inventory

Skills Experience Labor Aptitude Attitude

Agricultural Marketing Training Program

Personal Resource Inventory

Agricultural Marketing Training Program

Conducting a Product Analysis

Agricultural Marketing Training Program

Conducting a Product Analysis

Agricultural Marketing Training Program

Agricultural Marketing Training Program

Right Product = Higher Profits

Packaging Flavor Maturity

Agricultural Marketing Training Program

Pricing Your Product

Agricultural Marketing Training Program

Pricing Your Product

How does price affect profits?

Agricultural Marketing Training Program

Pricing Your Product