Guyana School of

Agriculture

Agribusiness Management
NAME: Pernel Junor
STUDENT #: 2019/023
COURSE: Agribusiness Management
PROGRAMME NAME: Diploma in agriculture
LECTUER: Miss Stacia Mc Donald
DUE DATE: December 4, 2020

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 Introduction

This assignment is based on the Pricing Strategy & Environmental Analysis. For international markets,
pricing is one of the most important elements of marketing product mix, generates cash and determines a
company’s survival. Pricing is a part of the marketing mix, is essential and has been always one of the most
difficult decisions in marketing because of increased competition, counterfeit activities, regional trading
blocks and volatile exchange rates. Consumers have different perception of the products depending on the
price. Therefore, pricing products for consumers is a difficult task, mainly because a high price may cause
negative feelings about products, and also a low price can be misleading on other products features such as
quality.

There are many pricing objectives that lead to different strategies. Some of the ways of pricing a product is:
premium and penetration pricing, bundle pricing, loss leader pricing, bulk pricing etc. However, the situation
is further complicated when it comes to pricing for international and global markets. Setting prices for
international markets is not an easy task. Decisions with regards to product, price, and distribution for
international markets are unique to each country. Furthermore, other factors such as: the market
stabilization, demand and competition-led pricing, market penetration, early cash recovery, company and
product factors, market and environmental factors, as well as economic, political, social and cultural factors,
have to be considered in the decision-making process.

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1. Identify and briefly explain the characteristics of four different Pricing strategies marketers
use.
● Penetration pricing – This type of strategies attracts the customers with a low price for a limited
period of time. It sacrifices immediate profits to build long-term relationships with buyers. Therefore
the strategy assumes satisfied consumers will buy the product for full price when the offer expires.
This pricing strategy of using low prices initially to make a wide number of customers aware of a
new product.

● Bundle pricing – Bundle pricing groups several like items together for a single price. Thereby
increasing sales volume and boosting revenue. These complementary products are typically sold at a
lower price than if they were purchased individually. It is simply when companies sell a package for
a lower price, they would charge if the customer bought all of them separately.

● Loss leader pricing - Loss leader pricing is a marketing strategy that involves selecting one or more
retail products to be sold below cost in order to get customers in the door. By assuming consumers
will purchase additional products that make up for the loss. The strategy is effective in increasing
total sales.

● Bulk pricing - Bulk pricing compels consumers to buy in bulk to achieve savings. Discounts can be
managed under the Pricing section when adding or editing a product. When buying in a supermarket
the cashier can click Show Advanced Pricing to view bulk pricing fields, among other pricing
product fields. For example; a farmer sells Tomatoes at $400.00 per pound or the canner’s special
five pounds for $1700.00. Consumers that buy in bulk save $300.00.

2. Which pricing Strategy is most applicable in the introductory stage of an egg production
business?
I would say the “Penetration pricing Strategy” is more applicable in the introductory stage of an egg
production business. Hence if a farmer offers an introductory price on eggs to a local restaurant
buyer. Penetration pricing gets the eggs in chef’s hands and diners’ mouths. Fantastic feedback and
customer demand for the eggs on the restaurant’s menu justifies the buyer paying full price in future
orders.

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3. Environmental barriers that prevent good pricing strategies from being adopted across a
business.
The main fact is that communication is the way to prevent good pricing strategies from being
adopted across a business.
● Time: An agribusiness organization that expects quick results cannot afford to be slack in its
channels of communication. The time lag between countries to adopt across in businesses has to
be overcome by the adoption of modern and fast communication channel before the time is over
and the businesses adopt.

● Space: It can act as a barrier that prevent good pricing strategies from being adopted across a
business. If agribusiness do not have space to hold the capacity of person they have, persons will
tend to leave.

● Place: The place or the location where a communication process takes place can degenerate into
a barrier to effective environment. A simple comparison of the surroundings in a Government /
Municipal office and the ambience provided in a multinational agribusinesses will show how
place and surroundings play an important role in effective communication. Inconvenient place,
rickety furniture, poor lighting, inadequacy of space are all factors that make people irritable /
impatient and annoyed.

● Climate: Though the word climate refers to the human relations prevailing there, it is no
exaggeration to say that the actual room temperature helps people to keep their heads cool!
Unfavorable climate can act as a barrier that prevent good pricing strategies from being adopted
across a business, leading to wrong perceptions or decision.(e.g. if you’re in an uncomfortable
climate you tend to make decisions quickly so you can leave).

● Noise: Noise is a physical barrier to effective communication. Noise may have its origin from an
external source or may exist even in the communication loop. You do not achieve effective
communication by merely shouting. Effective communication is almost impossible on the factory
floor, the bus stand or railway station. No one should try to out shout a machine to achieve
successful communication. Instead he should choose a better place with less noise to
communicate his message / information. Noise distorts messages and acts as a barrier to effective
communication.

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 4. Choose an Agribusiness and develop an environmental analysis of the internal and external
Environment.

❖ Poultry Farming
Analysis of the internal and external Environment (SWOT).

The internal analysis is consists the factors which are inside the company.

● Strength
This is what your company does well and that should build upon.
● Weaknesses
This is any limitations an agribusiness faces in developing or implementing a strategy.
The analysis is to ask questions and give ideas how to improve the agribusiness:
● Against whom do we compete?
● Who are our most intense competitors? Less intense?
● Makers of substitute products?
● Can these competitors be grouped into strategic groups on the basis of assets, competencies,
or strategies?
● Who are potential competitive entrants? What are their barriers to entry?

Ideas the Internal analysis would use to improve the agribusiness (we have to start thinking the following
ideas):

● Products and service

This is the inventory management, product modification, and product transportation of Poultry Farm
Company according to the customer needs. This also includes the poultry farm company’s sales services,
promotional for the product, packing, handling of return product and customization.

● Communication flow

There is a facility for communication with the customer like getting information about the quality of the
product, packing information etc. Payments system. This includes billing for the customer, caring of special
customer orders, order frequency, credit cheques and others.

● Leadership
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The leadership is managed by the general management in the poultry farm company. The general manager
looks for various operations like: general, technical, marketing and financial management performance etc.

● Employees

The employees are the backbone of the company and so only skilled labors work here. A satisfactory
environment for the working, facility for the coach, support and motivation, giving education to employees,
co-operation between the employees and the poultry farm company, giving promotion for their work etc. are
also available in the company.

The External analysis is consists the factors which are inside the company.

● Threat
This is the external conditions or barriers that prevent a company from reaching its objectives.
● Opportunity
This are situations that exist but must be acted on if the agribusiness is to benefit from them.
The analysis is to ask questions and give ideas how to improve the agribusiness:
● What are their objectives and strategies?
● What is their cost structure? Do they have a cost advantage or disadvantage?
● What is their image and positioning strategy?
● Which are the most successful/unsuccessful competitors over time? Why?
● What are the strengths and weaknesses of each competitor?
● Evaluate competitors with respect to their assets and competencies.

Ideas the External analysis would use to improve the agribusiness (we have to start thinking the following
ideas):

● Bargaining power of suppliers

The service of the supplier is quite satisfactory. They do not import any chickens from out of the country. So
it give benefits in getting discount due to be domestic suppliers. Delivery on time, good quality of chicks
and eggs, helps the poultry farm company in winning the trust of the customer.

● Competitor

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There are various competitors’ presents for the poultry farm in Guyana. Not only the domestic competitors
but the company also faces competition from the abroad. All competitors have adopted approximately same
price policy and quality of product so to compete with them is today’s time has become more difficult.

● Threat of new entrants

As we see that there is a lot of scope for growing poultry Farm Company. So there is also big threat of new
entrant in the industry.

● Threat of substitute product

It is not compulsory that the customer will only prefer chickens in their food, there are lots of substitute for
the products of the company. If people are conscious about their health and they can choose vegetarian food
and in non-vegetarian then can prefer fish, mutton or any others.

● Bargaining power of customers

The customers are also main factor in the external environment. They are educated, so they want to take all
information before getting the delivery. In poultry farm there is communication network so that they can
communicate with the customers. Sometimes the customers try to do bargaining but the poultry farm mostly
prefer fixed pricing method so there is no chances for doing bargaining.

SWOT
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10%

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2021 2022 2023 2024

Strength Weakness Threat Opportunity

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As it’s shown in the line graph, if you following the ideas on the analysis it basically will look this great
whereas the Strengths and Opportunities will rise in the agribusiness indicating that the business has
improved over the years(which is good). The Weaknesses and Threat will decrease which will also be nice
for the business, hence; the business will get more consumers as the years go by. When you have more
strength and opportunities and less weaknesses and threat, your agribusiness is healthy and doing great.

Conclusion

In conclusion, the pricing strategies makes a business decide how much advertising or marketing a product
gets because of the relationship to cost and consumer happiness. And the Environmental analysis provides
the agribusiness with a view towards what elements may affect the business.

Reference

● https://www.business.qld.gov.au/starting-business/planning/market-customer-research/swot-
analysis/uses#:~:text=A%20SWOT%20(strengths%2C%20weaknesses%2C,are%20the%20threats
%20and%20opportunities.
● https://www.google.com/search?
q=analysis&source=lmns&bih=657&biw=1366&hl=en&sa=X&ved=2ahUKEwiS9vTuiZ_tAhXHyq
QKHekwDw8Q_AUoAHoECAEQAA
● https://www.google.com/search?sxsrf=ALeKk03EG91_eLlodzQSugN5GrRy8Urr0g
%3A1606350302880&ei=3vW-
X9zoNOaHwbkPjcm12A4&q=which+swot+is+internal+analysis&oq=which+SWOT+is+internal+a
nlysis&gs_lcp=CgZwc3ktYWIQARgAMgcIIRAKEKABOgQIABBHOgwIIxDJAxAnEEYQ-
QE6AggAOgYIABAHEB46EwguELEDEIMBEMcBEKMCEEMQkwI6BAgAEEM6AgguOggILh
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KABAaoBB2d3cy13aXrIAQjAAQE&sclient=psy-ab
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%3A1606349245010&ei=vfG-
X_IZxeeDB9_kppAK&q=explain+the+structure+of+strength+opportunity+environmental+nalysis+
on+internl+environment&oq=explain+the+structure+of+strength+opportunity+environmental+nalys
is+on+internl+environment&gs_lcp=CgZwc3ktYWIQAzoECAAQRzoHCCMQsAIQJzoECCEQCl
CbkARYvPoGYJqKB2gBcAJ4AYABiAaIAYF4kgEMMi00NC4zLjEuMy4xmAEAoAEBqgEHZ3d
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