Basic Concepts of Agricultural Marketing

BASIC CONCEPTS OF AGRICULTURAL MARKETING
ADAM SMITH
Consumption
is the sole end purpose of all production: the interest of the producer ought to be attended only so far as it may necessary for promoting that of consumer.
DIXIE (1989)
Marketing is the series of services involved in moving a product or commodity from the point of production to the point of consumption.
GAEDEKE AND TOOTELIAN

Marketing
A management orientation focusing all the activities of the organization on satisfying customer needs and wants, there by helping achieve organizations long range objectives.
DIFFERENT PHILOSOPHIES THAT GUIDE A MARKETING EFFORT
1. Production concept 2. Selling concept 3. Marketing concept
PRODUCTION CONCEPT
Demand
for a product is greater than supply. To increase profit, focus on production efficiencies knowing all output can be sold.
SELLING CONCEPT
Demand
for a product is equal to supply. Emphasis is needed to sell the product to increase profit.(promotion)
MARKETING CONCEPT
Supply
of the product is greater than demand, creating intense competition among suppliers. wants and needs and match these to organizational resouces.
Identify
Agricultural Marketing System Input suppliers Production Agriculture
Imports
Assemblers, Brokers, etc Food manufacturing
Wholesalers
Wholesalers Government
Exports
Restaurant
Grocery stores specialty stores
Consumers
INPUT SUPLIER
Suppliers of all input should be identified before the production of any product. Done during the purchase of agricultural lot and/or construction of building to prevent disruption during the production.
Production agriculture

Production of crops or animal based product commence. All production standards Are set by the owner, farm manager, and consultants and are relayed to the farm
workers and concerned individual for reference purpose
Assemblers/brokers
They gather all the goods produced by every farmer within the area. Some get goods outside the country to complete the needed volume required.
wholesalers
Sells to retailers or other wholesalers but not to ultimate consumers.
They packed or classify the goods according to the needs of his costumer.
consumer
The last stage of agricultural marketing system. They have different taste and preferences, they are to be satisfied by the producers.
The marketing system
The marketing system is composed of six major components or subsystems.
a. Producer subsystem
Consist of the initiators of production who may be small farmers or corporate farms
b. Channel subsystem
Consist of market participants or intermediaries who are directly responsible for making the farmers product available to end users at type right time, place and form
c. Flow subsystem
Facilitates products financial and information flows. Information consists of product trends, grading, standardization and prices
d. Functional subsystem
Consists of marketing functions or services related to the creation of place, time and form utilities.
e. Consumer subsystem
Refers to the final reposition of the products produced by the farmers.
f. Environmental subsystem
Includes the climatic/physical, socio-cultural, economic, technological, legal/political factors affecting marketing system.
Conflict of interest in agricultural marketing.

Key players Interest
Farmers
Manufacturers Traders and retailers Consumers
Maximum price, unlimited quantities Low purchase price, high quality

Low purchase price, high quality Low purchase price, high quality
Important terminologies
Service- activity performed to alter the form, time, place possession characteristics of the product. Production service- services added prior to production. Marketing services-services added after production.
Point of production
The point of usual first sale by the farmer.(at farm or home)
Point of consumption Point where marketing ends, or point of last purchase.
market
A group of buyer and sellers with facilities for trading.
Utilities in marketing
utility
The satisfaction, value, or usefulness of the product.
Form utility
- when someone makes something, they assemble a product from parts and you can use it
For example, the form, when applied to a clothing item, can be the shape of the garment and the range of sizes and the selection of fabric.
In agriculture,
The packers who slaughter hog and cut them to pork carcases add form utility
Place utility
The utility of place refers to having the product exist in a location that is easily accessible to the buyer at the moment in time when their payment transaction is concluded.
example
If you are selling products in a huge warehouse style store, the utility of "place utility" can be as simple as having the product in boxes ready to be picked up and the customer can simply walk directly to the cashier to make payment.
in agriculture,
The
moving of hogs from Mindanao to Luzon.
Time utility
Goods are made available when they most wanted.
Example
The seven eleven convenience store Meat wholesalers who freeze some pork products for later use.
Possession utility
letting the customer have the product, usually after they pay, they can "possess" it and hold it, transport it etc
example
When someone buys something from a vendor, essentially, it is a "transfer of ownership
Image utility
The satisfaction accuired from emotional or psychological meaning attached to product.
example
Some people pay more for organic foods because it is perceived to be more nutritious.

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BASIC CONCEPTS OF AGRICULTURAL MARKETING

GAEDEKE AND TOOTELIAN

DIFFERENT PHILOSOPHIES THAT GUIDE A MARKETING EFFORT

1. Production concept 2. Selling concept 3. Marketing concept

Agricultural Marketing System Input suppliers Production Agriculture

Assemblers, Brokers, etc Food manufacturing

Grocery stores specialty stores

workers and concerned individual for reference purpose

Sells to retailers or other wholesalers but not to ultimate consumers.

The marketing system

The marketing system is composed of six major components or subsystems.

Refers to the final reposition of the products produced by the farmers.

Conflict of interest in agricultural marketing.

Maximum price, unlimited quantities Low purchase price, high quality

Point of consumption Point where marketing ends, or point of last purchase.

A group of buyer and sellers with facilities for trading.

moving of hogs from Mindanao to Luzon.

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