PRINCIPLES OF

AGRICULTURAL
MARKETING
What is Marketing?
• Facets of production agriculture
• Collection of commodities
• Organizing and processing commodities
• Distributing and merchandizing commodities
 Input Suppliers

Production Agriculture

Seafood Imports

Assemblers, Brokers, etc.

Food Manufacturing

Wholesalers
Government

Exports Grocery Stores Specialty Stores Restaurants

Consumers
What is Marketing?
--the performance of all activities involved in the flow
of products and services from initial production to
final consumption.
Key Points
• Marketing is not limited to farm activities
• There is a mutual interdependence between
production agriculture and the marketing system
• Marketing is neither mechanical nor automatic--it
involves decisions
• The marketing system does involve farm inputs
Inherent Conflicts
• Consumers want high quality products at lowest
possible price
• Producers want highest possible returns
• Marketing agents want highest possible profits for
services rendered
Goal of Marketing System
Balance conflicts of the parties involved
and generate the most efficient flow of
goods and services from producer to
consumer
What is a “market?”
--an arena for organizing and facilitating business
activities and for answering the basic economic
questions of what, how much, and how to produce
goods and services as well as how to distribute
production
Defining a Market:
(1) location
(2) product (form)
(3) time
(4) institutional level

Markets, in general, join together the various

components of the marketing system.
Marketing as “Utility Creation”
• Classification of utilities:
• Form utility
• Place utility
• Time utility
• Possession utility
Form Utility
• Changing the form of a product so that it is useful
to the consumer

Examples:
Wheat  Flour  Bread
Cotton  Fabric  Blue Jeans
Place Utility
• Altering the location of a product so that it is useful
to consumers

Examples
Rattan Bags in Bicol Rattan Bags in SM
Time Utility
• Altering the time at which a product is available so
as to be useful to the consumer.

Examples

Seasonal strawberry production  Strawberry Jam

in Baguio stores available when you want them
Possession Utility
• Altering the ownership of the product so the
consumer can use it.

Examples

Grocery store owns  you own

Value Added
• The process of creating or refining the
utilities of a product increases its value
to the consumer
• Each change in the product “adds
value”
The Marketing Cost
• The final value of goods and services
less the farm value represents the total
cost of marketing food and fiber
products
Why Middlemen Profits?
• Adding utility (place, time, and
possession)
• Bearing risk of inventories
Characteristics of the Marketing
Process
(1) sequence of events
(2) coordination of activities
 Producers

Technology
Phil. Economy
The Marketing Infrastructure
System (physical)
Global
Economy (human)

Consumers
Government Competition
Two Different Views
• Macromarketing  the “big picture”
• Micromarketing  firm management
Need for Marketing Expertise
(1) Increasing commercialization of agriculture
(2) Increasing “gulf” between producers and
consumers
(3) “The Global Economy”