marketing-subsystem-Group-2.pdf,........

To share some knowledge

1. THE MARKETING
SUBSYSTEM

2. Topic Outline
•Classification of Agribusiness
Products
•Characteristics of Agribusiness
Products
•Classification of Marketing
Strategies
•Key Players in the Agribusiness
Marketing Subsystem

3. Topic Outline, cont…
•Market Functions
•Issues in Agribusiness
Marketing in the
Philippines
•Marketing
Considerations and
Strategies for
Agribusiness Products

4. The Marketing Subsystem
•One of the 5
aggregates of the
agribusiness system
•Objective: satisfy the
needs and wants of the
consumers

5. Classification of Agribusiness
Products
1.Fresh agricultural products
2.Semi-processed agribusiness
products
3.Finished products

6. •Directly harvested from farms
•Do not pass higher level of transformation
•Cleaned, sorted, graded
Fresh Agricultural Products

9. Semi-Processed Agricultural
Products
•Underwent second level of
transformation
•Inputs for industry/processing
•May not be consumed

10. Semi-processed products

13. Finished Products
•May be consumed by the buyers
•Not intended for further
processing

20. The Marketing Sector
•Forms the link between the other sectors
mentioned, play different role.
•Middlemen –major sectoralplayers
–Though not directly involved but play a very
important role
–Assemblers, wholesalers, retailers, agents
and brokers

21. 1. Assemblers
•Rural traders or barrio buyers
•Accumulate produce of individual farmers
•Bulk for storage, then distribute to
wholesalers

25. 2. Wholesalers
•Handles products in bulk
•Do not deal with end-users of the product
(operate between farmers and consumers
or between processors and end-users)

26. 3. Retailers
•Directly deal with end-
users
•Have owned outlets
•Carry an assortment
of different products
in small quantities
•Some buy in bulk and
repack products for
easier selling

27. 4. Agents and Brokers
•Negotiation is their main activity (bring the
two parties together)
•Do not get profit, do not assume
ownership of the product.
–But get incentives in the form of commission
(% of sales)
•Advantage: they are well informed of the
goings-on in the market

28. Marketing Functions
•Negotiation
•Assembly
•Grading
•Storage
•Processing
•Packing/Packaging
•Financing
•Risk-taking or risk-bearing
•Market
intelligence/market
research
•Promotion

29. Marketing Functions, cont…
•Negotiation
–Starts with finding buyers and bringing the
sellers and buyers together to make
arrangements
–Becomes smoother if buyer-seller relationship
is already established
•Assembly
–Accumulate produce of small farmers or
producers

30. Marketing Functions, cont…
•Grading
–Facilitate buying, selling, transportation,
storage and pricing.
–Standard measurements –size, weight and
overall quality
•Storage
–to make goods available when it is needed
either for processing or for consumption.

32. Marketing Functions, cont…
•Processing
–Largely a marketing function (AB products pass
through this)
•Packing/Packaging
–Total product presentation
•Financing
–To handle all market-related costsand
problems
–Sourced from banks, or own money -middlemen

33. Marketing Functions, cont…
•Risk-taking or risk bearing
–Must be ready to assume risks considering losses to be
incurred during operations.
–Must be able to devise ways to cushion business
against risks.

34. Marketing Functions, cont…
•Market intelligence/market research
–Important in process conceptualization
•To assure product-market fit
–process of gathering and analyzing relevant
market information for the purpose of making
and fine-tuning marketing decisions to
respond to the ever-changing consumer
preferences.
–Map out competitive strategies (4Ps) if there
are many competing firms

35. Marketing Functions, cont…
•Promotion
–Continuous function of marketing
–Objective: inform buyers, increase sales
–Fresh VS Branded
•Fresh are rarely promoted, processed are. Why?
•Fresh are not branded and are homogeneous to
justify cost of promotions
•Processed are differentiated and branded, to
capture markets and develop brand loyalty

36. Marketing Functions, cont…
•At the end of the day, performance is the
key.
–Depends on how participants perform
functions according to expectations
•Participation is developed through
continuous interaction

37. The three types of agribusiness products namely:
fresh farm products, semi-processed goods and
processed productshave different product
characteristics, are operating in different
competitive environments, and have different
target markets. Each group therefore merits
separate marketing strategies.
Question:
What strategies could you suggest so that fresh farm
products will be effectively marketed?

40. Issues in Agribusiness
Marketing in the Philippines
TWO MAIN ISSUES:
1.Inefficiency
2.Dependence on Middlemen

41. Inefficiency
•the failure of the source or the producer to
bring the produce to the market at the time
it is needed and at the lowest possible
cost
–levels of post harvest handling
–bulkiness of agribusiness products
–distance of farms to major market

42. Dependence on Middlemen
•smallness of farmers’ scale of
operations
–impractical to market to end consumers
the small produce
–not capable to buy his own market
facilities
–wants ready cash for his products

43. Dependence on Middlemen
•producer’s lack of market awareness
–lack of market information that
reach the producers
•increasing importance of middlemen’s
participation in the production and
harvesting process

44. Specific Issues: Farmers’ Level
•Low prices of agricultural produce/ cost
price squeeze
•Perceived lack of buyers or market (there
is actually a mismatch between what is
produced and what is required by the
buyers)
•Poor access to major markets due to lack
of market infrastructure
•Lack of relevant market information

45. Specific Issues: Traders’ Level
•Irregularity of volume of available products
and inability of farmers to meet demands
•Lack of market infrastructure, which
results in increased marketing cost and
delayed distribution
•Competition due to relatively many traders
handling the same products

46. Specific Issues: Consumers’
Level
•High prices of agricultural produce
•Variability in quality of agricultural products
in the market

47. Agribusiness Market Analysis
•Market characteristics:
–Who are the buyers?
–What specific agribusiness products do they buy?
–Where are the buyers located?
–What are their types of business organizations?
–For what purpose do they buy?
–What are their quality and volume requirements
–What are their specific marketing terms and
conditions?

48. Agribusiness Market Research
•Design of marketing strategies depend on
the outcome of market research
•Importance of Market Research:
–reduces uncertainty in the formulation of marketing
strategies
–helps agribusinessmanto continuously monitor
marketing activities based on prepared plans
–helps agribusinessmanidentify market entry points

50. Strategies for Agribusiness
Products
Fresh Farm Products
•efficient product movement from the farm
to the major markets
–who are the buyers
–what farm products do they buy
–how much and how often do they buy

51. Strategies for Agribusiness
Products
Fresh Farm Products
•efficient product movement from the farm
to the major markets
–where the buyers are located,
–what are the types of business organization
–for what purpose do they buy and use the
farm products
–what are the product requirements of the
buyers

52. Strategies for Agribusiness
Products
Fresh Farm Products
1. Product Strategies
•Value-addingfor farm products
–overall market attractiveness (that is, what is
visible to buyer’s eyes)
–quality and packaging-depending on the
target market
–Quality control: inputs, production, post-
harvest activities

58. Strategies for Agribusiness
Products
Fresh Farm Products
2. Distribution Strategies
•Production scheduling –producers could time
their production to help even out shortages in
the lean months

59. Strategies for Agribusiness
Products
Fresh Farm Products
3. Distribution Strategies, cont…
•Farmers should provide quality produce on a
continuous basis and on the part of the
middlemen, they must offer higher prices for the
premium produce that they are getting from the
farmers
•Expand market coverage through networking

61. Strategies for Agribusiness
Products
Fresh Farm Products
4. Promotion Strategies
•trade fairs
•market matching activities
•attendance to business forums

62. Strategies for Agribusiness
Products
Semi-Processed and Processed Products
•well conducted analysis of the market
–trends in demand,
–buying behavior of buyers, and
–competition

64. Strategies for Agribusiness
Products
Semi-Processed and Processed Products
Product and Pricing Strategies
•Innovation (create new products and new
markets)
•Product mix to handle
•price determination: demand, cost, and
competition

68. End