Lecture 2- agriculture marketing & the us food and fiber industry

Marketing

• The process of communicating the value of a product or service to customers

• For the purpose of influencing behavior and/or precipitated behavioral change

• Movement of products through channels

• Adding value

The 4 major sectors

• farm service

• Producers

• Processors

• Marketers

Farm Service

Inputs include

• financial

• Equipment

• Feed

• Fertilizer

  
  

Producers

• includes the firms that are part of the production

• Someone producing a product for consumption

Processors

• adds value

• Change the form of the food

Market sector

• creates value in the food industry by changing time and place of food

Market share

Portion of a market controlled by a particular company or product

Producers life cycle

Sales path of a product over time as it passes through the stages of introduction, growth, maturity and decline

Supply response

Represents change in agricultural output due to change in agricultural output price

Macro view of marketing

• used to describe the whole system of marketing food and fibers

• The performance of all business activities involved in the forward flow of good and services from producers to consumers

Marketing channel

• the set of firms that move a commodity from the farm to the consumers

  • commodities

  • Concentrated

  • Broken down

Commodities

Produced on farm

Concentrated

Into large quantities to be handle by fewer firms as it moves to the processors

Broken down

Smaller quantities as it moves to retailers and even more consumers

Perceived value

• a product or service has in the mind of the consumer

• Perceived value of a good or service affects the price that the consumer is willing to pay

Processors role

• affects “on farm” profitability

• Combine raw materials into the final produce

• Adding value

Government agencies

• provide public services

  • market information

  • Commodity grades

  • Regulations

  
  

Micro view of marketing

• the performance of business activities that direct the forward flow of goods and services from producer to consumer to accomplish the objectives of the firm/ farmer

• Buying and selling

Micro procurement

the performance of business activities that direct the flow of agricultural commodities to a firm to satisfy its objectives

Consumer sovereignty

• through their independent purchases, direct all production and market activities

  • no guarantee attractions to buyers

  • Must continue to ear its position in the marketplace