Agribusiness Management- 4th edition Book

Strategic Market Planning

Objectives

  • Outline the Marketing Concept

  • Review the Evolution of Marketing in the food and agribusiness industries

  • Present the Market Planning Framework

  • Discuss the Components of a SWOT Analysis

  • Examine the Market Segmentation Concept

  • Develop the Fundamental Idea of Positioning

Introduction

  • Marketing often equated with advertising and selling, but encompasses much more, including:

    • Identifying customer needs

    • Developing products and services to meet those needs

    • Establishing promotional programs and pricing policies

    • Designing distribution systems

  • Marketing management involves overseeing this total process.

The Marketing Concept

  • Definition: Marketing entails anticipating customer needs and meeting those needs profitably.

    • Anticipation: Successful marketers predict needs for products or services.

    • Target Market: Understanding unique needs of specific market segments is critical (e.g., differences between small livestock farmers and large turf seed operations).

    • Profitability: Providing a product/service at a price that yields acceptable returns is essential.

Evolution of Marketing

  • Historically seen as "selling what you have" vs. modern view of "having what you can sell" by anticipating customer needs.

  • Marketing evolution:

    • Product-driven: Focus on creating superior products that attract customers.

    • Sales-driven: Concentration on promoting existing products aggressively.

    • Market-driven: Deep understanding of customer needs influences all business decisions for sustainable relationships.

Market-Driven Organizations vs Product/Sales-Driven

Attribute

Product-Driven

Sales-Driven

Market-Driven

Focus

Product quality

Selling the product

Customer needs

Approach

Create demand via quality

Promote benefits

Develop solutions

Market understanding

Minimal

Moderate

High

Components of a Strategic Marketing Plan

  1. Conduct a SWOT Analysis

  2. Choose a Target Market

  3. Choose a Position

  4. Develop the Appropriate Marketing Mix

  5. Evaluate and Refine the Marketing Plan

Conducting a SWOT Analysis

  • SWOT Analysis is crucial for identifying:

    • Internal strengths and weaknesses

    • External opportunities and threats

  • Good SWOT assessments inform marketing messaging and positioning strategies, minimizing the impact of weaknesses and threats.

Market Segmentation

  • Market segmentation categorizes customers into groups with similar responses to marketing efforts.

  • Important segmentation variables include:

    • Geographic: Food preferences can vary by location.

    • Demographic: Age, income, family size.

    • Operational Characteristics: Type and size of farming operations.

    • Psychographic/Behavioral: Values related to purchases (e.g., premium versus budget brands).

Positioning

  • Definition: Positioning is crafting a customer perception in the marketplace.

    • Competitive advantage is key to successful positioning (differentiation vs. cost leadership).

  • Successful positioning statements relate to customer needs and highlight unique value.

Summary

  • Marketing is a complex process focused on understanding and anticipating customer needs and successfully meeting them for a profit.

  • Strategic market planning requires a deep understanding of the market, competitors, and customer needs, guiding firms in market selection and product positioning.

Discussion Questions

  1. Difference between product-oriented and market-oriented firms.

  2. Identify five key trends in chosen agribusiness sector and related opportunities/threats.

  3. Strategies for evaluating organizational strengths and weaknesses.

  4. Define a market segment and explore specific segments, like U-pick farms.

  5. Compare products advertised online, in newspapers, and in ag magazines targeting different market segments.

  6. Create a positioning statement for a U-pick farm based on identified needs.

  7. Analyze two firms: one with a differential advantage and another with a cost advantage, discussing their strategies.

  8. Find examples of firms communicating tangible vs. intangible value in marketing.