WOLAITA SODO ATVET COLLEGE

Unit of Competence: Market Crops

products
Module Title: Marketing Crops products

1
 Competence Description
• This competence standard covers the functions required to market products
and services in an agricultural sector.
• It requires the application of skills and knowledge to plan and implement a
marketing strategy, and monitor and improve market performance.
• It also requires the ability to collect, analyze and present data in the internal
and external business environment.
• In addition, it requires an awareness of industry structures and business
trends. The work will be carried out independently within own area of
responsibility and within enterprise guidelines.

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LEARNING OUTCOME OF THE COMPETENCE
By the end of the session, students should be able to;
LO1.Analyzing market information
2.Identifying marketing requirements
LO3.Developing a marketing plan 
LO4.Implementing marketing activities
LO5.Evaluating marketing performance

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LO1.ANALYZING MARKET INFORMATION
Introduction
What is market and marketing?
The word market comes from the Latin word “marcatus”
which means merchandise or trade or a place where business is
conducted. Word ‘’market’’ has been widely and variedly used to mean
(a) a place or a building where commodities are bought and sold, e.g.,
super market;
(b) potential buyers and sellers of a product, e.g., wheat market and
cotton market.

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 Introduction….
Components of a Market:
For a market to exist, certain conditions must be satisfied. These conditions
should be both necessary and sufficient. They may also be termed as the
components of a market.
1. The existence of a good or commodity for transactions(physical
existence is, however, not necessary)
2. The existence of buyers and sellers;
3. Business relationship or intercourse between buyers and sellers; and
4. Demarcation of area such as place, region, country or the whole world.
The existence of perfect competition or a uniform price is not necessary.

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Introduction….

A simple definition of market is a physical place where buying and

selling of goods or services take place. There is a hand over of physical
goods or services to each other.
There are two definition of marketing related to the agricultural
sector. Marketing involves finding out what your customers want and
supplying it to them at a profit.
Marketing is also the series of services involved in moving a product
from the point of production to the point of consumption.

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1.1. Researching and analyzing relevant information to
identify market trends.
A marketing information system (MIS) is a set of procedures and
methods designed to generate, analyze, disseminate, and store
anticipated marketing decision information on a regular, continuous
basis.
Any person or group managing a marketing effort needs information
to make informed decisions. The first step to developing an effective
marketing information system is identifying the information that is
important to your marketing efforts.

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CONT..

The information needed by marketing managers comes from three

main sources:
1) Internal company information – Marketing managers rely on
internal reports on orders, prices, costs, inventory levels,
receivables, payables, and so on. By analyzing this information, they
can spot important opportunities and problems.
2)Marketing intelligence – The internal records systems supplies
results data, but the marketing intelligence system supplies happenings
data. A marketing intelligence system is a set of procedures and sources
managers use to obtain everyday information about developments in the
marketing environment (Kotler and Keller, 2009:109-111)
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CONT…
3) Market research – Management cannot always wait for information
to arrive in bits and pieces from internal sources. Also, sources of
market intelligence cannot always be relied upon to provide relevant
or up-to-date information (particularly for smaller or niche market
segments).
Marketing research: - Market research involves collecting, recording
and making sense of all the available information which will help a
business unit to understand its market.
A marketing research system allows for the systemic design,
collection, analysis, and reporting of data and findings relevant to a
specific marketing situation.
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1.2. Identifying and evaluating competing products

A competitive analysis is a critical part of your company marketing

plan. With this evaluation, you can establish what makes your product
or service unique--and therefore what attributes you play up in order
to attract your target market.
Evaluate your competitors by placing them in strategic groups
according to how directly they compete for a share of the customer's
dollar.
For each competitor or strategic group, list their product or service, its
profitability, growth pattern, marketing objectives and assumptions,
current and past strategies, organizational and cost structure, strengths
and weaknesses, and size (in sales) of the competitor's business.
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 CONT..
• Answer questions such as:
Who are your competitors?
What products or services do they sell?
What is each competitor's market share?
What are their past strategies?
What are their current strategies?
What type of media are used to market their products or services?
How many hours per week do they purchase to advertise through the
media used in this market?
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Cont.
What are each competitor's strengths and weaknesses?
What potential threats do your competitors pose?
What potential opportunities do they make available for you?

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Conducting market and situation analysis
A situation analysis is the foundation of the strategic planning
process for your marketing plan. It includes an examination of both
the internal factors (to identify strengths and weaknesses) and external
factors (to identify opportunities and threats).
Useful tools in performing a Situation Analysis are The C's of
Marketing, SWOT analysis and Porter's five forces analysis.

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CONT..
A) The 5 C's of Marketing
The 5 C's of Marketing can be summarized as:
1.Company - The company analysis involves evaluation of the
company's objectives, strategy, and capabilities. These indicate to an
organization the strength of the business model, whether there are areas
for improvement, and how well an organization fits the external
environment.
2. Collaborators (or Partners) - Distributors, suppliers, and alliances.
These are any companies that you work with on a day to day basis to
help your company run.

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CONT…
3. Customers - This is your market. Ask yourself what benefits they are
looking for. What motivates them in the purchase process? Where the
customer does actually purchases your product? How the product is
purchased (impulse buys, internet, etc)? Understand the quantity a
customer will purchase and even trends in consumer tastes.
4. Competitors - Both your actual and potential competitors and those
that directly or indirectly compete with you. Understand their products,
positioning, market shares, strengths and weaknesses.

15
CONT..
5. Climate (or Environment) - An analysis on the climate is also
known as the PEST analysis. The types of climate/environment firms
have to analyses are:
Political and regulatory environment: An Analysis of how active
the government regulates the market with their policies and how it
would affect the production, distribution and sale of the goods and
services.
Economic Environment: An Analysis of trends regarding
macroeconomics, such as exchange rates and inflation rate, can prove
to influence businesses.

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Cont…
Social/cultural environment: Interpreting the trends of society,[5]
which includes the study of demographics, education, culture etc...
Technological analysis: An analysis of technology helps improve on
old routines and suggest new methods for being cost efficient. To stay
competitive and gain an advantage over competitors, businesses must
sufficiently understand technological advances.

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Cont..
Evaluating the company, collaborators, customers, competitors, and
climate is a simple way to get a leg up on your competitors.
 Marketing Plan Success can help you develop a successful situation
analysis, which is the foundation of the strategic planning process.
B) SWOT Analysis
A SWOT Analysis is another method under the situation analysis that
examines the Strengths and Weaknesses of a company (internal
environment) as well as the Opportunities and Threats within the
market (external environment).

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Cont..
 A SWOT analysis looks at both current and future situations, where
they analyze their current strengths and weaknesses while looking for
future opportunities and threats.
The goal is to build on strengths as much as possible while reducing
weaknesses.
A future threat can be a potential weakness while a future
opportunity can be a potential strength. This analysis helps a
company come up with a plan that keeps it prepared for a number of
potential scenarios.

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Cont..
C) Porter five forces analysis
The Porter models involves scanning the environment for threats
from competitors and identifying problems early on to minimize
threats imposed by competitors.
This model can apply for any type of business, from small to larger
sized businesses.
The ultimate purpose of the Porter's five forces model is to help
businesses compare and analyze their profitability and position with
the industry against indirect and direct competition.

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Cont..
It includes:-
1. The threat of new entrant: New entrants affect the company’s profits
as the consumers have more variety to choose from.
2.Bargaining power of buyers: The companies influence on the buyer to
purchase their product or how much the buyer depends on the product
being produced by the firm.
3.Threat of substitute product of services: more than one firm producing
similar or the same product or service.
4.Bargaining powers of suppliers: Company dependence on resources
the suppliers provide to create their product or services.
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Cont..
5. Rival among existing competitors: Rivals fighting to be dominant in
the market, to stay in business and maximize profit.

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1.5. Identifying, researching and analyzing
market for new or existing products
Promotion of Existing Products to New Markets involves researching
and marketing to introduce a new customer base to a current existing
product or service.
It is learning the needs and wants of target markets and delivering
the desired satisfactions.
This could be through use of coupons, samples, and/or price
promotions. A market development strategy involves selling your
existing products into new markets.

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Cont…..
There are a variety of ways that this strategy can be achieved.
A) New geographical markets
B) New product dimensions or packaging
C) New distribution channels
D) Different pricing policies to create a new market segment.

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1. 6. Continually monitoring market environment to ensure
information should be current and reliable

The business environment is a marketing term and refers to factors and

forces that affect a firm's ability to build and maintain successful
customer relationships. The three levels of the environment are:
A. Micro (internal) environment – small forces within the company
that affect its ability to serve its customers.
B. Meso environment – the industry in which a company operates and
the industry's market(s).
C. Macro (national) environment – larger societal forces that affect the
microenvironment.

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Cont…
Environmental scanning can be defined as 'the study and interpretation
of the political, economic, social and technological events and trends
which influence a business, an industry or even a total market'.
The factors which need to be considered for environmental scanning are
events, trends, issues and expectations of the different interest groups.
A trend can be defined as an ‘environmental phenomenon that has
adopted a structural character.
Environmental scanning is an ongoing process and organizations are
always refining the way their particular company or business goes
through the process.
Environmental scanning reinforces productive strategic plans and
policies that can be implemented to make the organization get the
maximum use of the business environment they are in. 26
 Self-check -1
• Directions: Answer all the questions listed below. Illustrations may be
necessary to aid some explanations/answers.  
1.Explain trend analysis.
2.Briefly discus 5 C’ s of marketing
3. Describe SWOT analysis
4.How to Identify, research and analyze market for new or existing
products?
5.Discuss different types of business environment

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2.IDENTIFYING MARKETING REQUIREMENTS

2.1.Creating Promotional materials that enhance the product and

commercial presentation.
Promotional material
is a message issued in behalf of some product or cause or idea or perso
n or institution; "the packaging of new ideas".
All types of businesses use promotional materials to market their
products and services. Promotional materials can include sales
collateral material, advertisements and even small, everyday products
that contain the name and phone number of a business.
Promotional products can serve many purposes before or after a
sale.
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Cont…
Different Types of Promotional Materials
There are a wide variety of different promotional materials providing companies
and organizations effective ways to reach out to their customers. some of the
promotional materials includes:- .
Brochures: - Brochures are used to introduce a company’s products or services to
their targeted audience and potential customers. They can be designed to fit on
one folded sheet or as a small booklet.
Flyers: - Flyers are a relatively inexpensive form of advertising and are intended for
mass distribution. They are produced on a single sheet of paper and tend to
inform or promote more specific information such as a sale, special promotion or
new service/product.
T-Shirts:- T-Shirts are a unique way of advertising a specific product, service, event
or just your company in general. 29
Cont…
Posters: - Posters are beautifully designed pieces promoting a specific
product, service or event. They can vary greatly in size, shape and style;
providing as much or little information desired.
Custom Packaging Package design conveys the most important aspects
of your product to customers and allows it to stand out from the rest.
Direct Mail/Email Campaign:- Direct mail campaigns are a form of
advertising providing customers with a wide variety of information on
your company, products and services offered. Mailings can be sent out
monthly, bi-weekly or even weekly. It creates a quick and easy way to
keep in touch with current and potential clients/customers. When using
email campaigns, we will also be able to provide you with a detailed
report on your campaigns success. 30
Cont..
Custom Postcards:- using an interesting image on one side to spark
interest, postcards can easily be mailed to provide customers with a
quick bit of information promoting a specific product, service or
event.

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2.2. Evaluating Proximity of the market area.

The word proximity means nearness in space, time, or relationship. The

main purpose of the proximity marketing plan is to connect with
customers while they are near your business or service and spur them into
action.
The analysis of markets leading to the decision of choosing the right
location for a retail or service facility has never been an easy task for
business decision makers.
Location is especially important for businesses in the retail and
hospitality trades because they rely a great deal on visibility and exposure
to their target markets. But location is also important for service and
manufacturing ventures, which have such costs as advertising, promotion,
and distribution that are a direct result of where they're located. 32
CONT…
When choosing the best location for your business, your first step is to
target the right community. You can analyze the community you're
thinking about by considering the following questions:
Is the population base large enough to support your business?
Does the community have a stable economic base that will promote a
healthy environment in which your business can grow?
Does the demographic profile closely match that of the market you
wish to serve?
What are the community attitudes or outlook?

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CONT….
It's also important for you to understand the demographic profile of
your potential customers in order to properly evaluate a community
for location. To see if the community you're considering offers a
population with the demographic traits necessary to support your
business, look at the community's:
Purchasing power. Find out the degree of disposable income within
the community.
Residences. Are homes rented or owned?
Means of transportation. Do prospective customers in the area own
vehicles, ride buses or bicycles, and so on?
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CONT…
 Age ranges. Does the community consist primarily of young people
still approaching their prime earning years, young professionals,
empty nesters, or retirees?
 Family status. Are there lots of families in the area or mostly
singles?
 Leisure activities. What type of hobbies and recreational activities
do people in the community participate in?

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CONT..
Ways to Evaluate Market proximity
There are ten ways to evaluate market proximity. These are:
Urgency 
Market Size 
Pricing Potential 
Cost of Customer Acquisition 
Cost of Value-Delivery 

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CONT…
Uniqueness of Offer 
Speed to Market 
Up-Front Investment 
Up-Sell Potential 
Evergreen Potential 

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Self-Check- 2

Directions: Answer all the questions listed below. Illustrations may

be necessary to aid some explanations/answers.

1.Discuss different types of promotional materials.

2.Describe Ways to Evaluate Market proximity.

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LO3.Developing a marketing plan

Introduction
A marketing plan is a comprehensive document or blueprint that
outlines a company's advertising and marketing efforts for the coming
year.
It describes business activities involved in accomplishing specific
marketing objectives within a set time frame.
A marketing plan also includes a description of the current
marketing position of a business, a discussion of the target market
and a description of the marketing mix that a business will use to
achieve their marketing goals. 
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CONT..
A marketing plan has a formal structure, but can be used as a formal
or informal document which makes it very flexible.
3.2. Assessing and interpreting Alternative marketing strategies
An organization's strategy can combines all of its marketing goals into
one comprehensive plan.
A good marketing strategy should be drawn from market research
and focus on the right product mix in order to achieve the maximum
profit potential and sustain the business. The marketing strategy is
the foundation of a marketing plan.

40
CONT…
The marketing strategy of a company contains the company’s value
proposition, key marketing messages, information on the target
customer, and other high level elements.
A value proposition is a business or marketing statement that a company
uses to summarize why a consumer should buy a product or use a
service. This statement convinces a potential consumer that one
particular product or service will add more value or better solve a
problem than other similar offerings.
  A value proposition is a promise by a company to a customer or
consumer segment.
It is an easy-to-understand reason why a customer should purchase a
product or service from that specific business.
41
 CONT..
The two main types of marketing strategy are:
1.Business to business (B2B) marketing:- Business-to-
business (B2B or, in some countries, B to B) refers to a situation
where one business makes a commercial transaction with another.
• This typically occurs when:
A business is sourcing materials for their production process (e.g. a
food manufacturer purchasing salt).
A business needs the services of another for operational reasons
(e.g. a food manufacturer employing an accountancy firm to audit
their finances).
A business re-sells goods and services produced by others (e.g.
a retailer buying the end product from the food manufacturer). 42
CONT…
2. Business to consumer (B2C) marketing: - Business to consumer
(B2C) is business or transactions conducted directly between a
company and consumers who are the end-users of its products or
services. The business-to-consumer as a business model differs
significantly from the business-to-business model, which refers to
commerce between two or more businesses.

43
3.3. Developing cost –effective marketing plan
A good marketing plan spells out all the tools and tactics you’ll use to achieve your
sales goals. A marketing plan is good for focusing your energy towards the right
actions that will deliver on what you want to accomplish.
• How to Write a Marketing Plan:-
Before you begin, it could be helpful to establish three items:
A completion date: A deadline you set in advance for when you want to complete
your first draft of the plan. It's important to remember that establishing an effective
plan will be an iterative process. You can count on your plan changing.
The responsible parties: Establish your team's roles and responsibility. In other
words, make sure you identify who is doing what and when they need it completed.

Your budget: When it comes to putting together a marketing strategy, it's critical to
establish ahead of time how much do you have to spend, as that can have a major
impact on the strategies you decide to implement. 44
CONT…
Step1: Setting Your Objectives: - The first step in developing your
marketing plan is to establish the marketing objectives that will
accomplish your business goals. One of the steps you can take to
create your objectives is to first create a vision statement, which is
basically the long-term mission for your business that is both timeless
and immediately inspiring for organization stakeholders. Another step
that can help set objectives is to perform an S.W.O.T. analysis, where
you identify the strengths, weaknesses, opportunities, and threats
facing your business.
Step2: conducting market research: One of your primary goals in
conducting research is to set focus areas, which are the discipline in
your plan. 45
CONT…
Step3: Defining the Strategies you need: ­-Strategies are the how in your
plan. This is the point where you begin to address questions such as:
• How will you position your business against other business?
• What target markets are your best prospects to achieve your goals?
• How will you price your offerings to achieve your goals?
Step4: Outlining your Tactics:- Tactics are the in your plan. Start by
thinking about what you should do first to achieve the best results. That
may be as simple as putting together a very good presentation. Start
small and build tactics one-by-one. For each tactic you develop, note
how it fits your areas of focus, your strategies, and your objectives.

46
CONT..
Step5: Building measurement for Each Tactic: The point is that you
need to begin measuring whether the tactics are successful at
delivering your objectives. You may even choose to stagger your
tactics so that you can evaluate their effectiveness and learn which
ones work best for your business.
Step6: Developing the Plan and Stick to It:- Your plan is only as good
as its implementation, so also create a plan for precisely how you are
going to execute on it. Where appropriate, look to partner with other
organizations to help with implementation.
If your plan includes advertising or events, sometimes the vendors will
help with implementation. Depending on your area of business, you
may also consider bartering services with other businesses.
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CONT…
Step 7: Implement the Plan – and Stay Flexible:- Never forget that
the opportunities and risks you established in your S.W.O.T. analysis
might dictate that the objectives you've established in your plan might
not happen as planned, A whole host of variables could come into play
that you never considered in the beginning, such as changes in
consumer demand, channel expansion, customer contracts,
competitive responses, and supply costs.

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3.3. Preparing and recording detailed plans for promotional activities

The aim of all promotional activities is to get the organisation’s

underlying promotional message across in a coordinated manner; that
is, communicating what the organisation is offering, who it is offering
it to and how this will benefit customers.
• Factors to consider
• When planning and scheduling the mix of promotional activities the
organisation will use, there are many factors that must be considered.
• Factors to consider include:
Market type
Market segments/target audience
 Customer needs 49
CONT…
Market share
Promotion scheduling and timing
 Market trends and developments in promotions
 Competitors’ promotional activities
Benefit of promotional activities
Brand awareness: To create a successful promotional strategy, you
need to create brand awareness amongst your customers. Brand
awareness relates to how well your specific product is recognized by
current and potential customers.

50
 CONT..
Sale to existing customer: - You may be able to increase awareness
of your product or service by marketing it to your existing customers.
If you understand your current customers - particularly those that
deal with you often or spend highly - you should be able to develop
ways to target them and increase your brand awareness.
 You should also encourage existing customers to promote you to
associates, as word of mouth recommendations can be very
influential when developing a brand.
Timing and measuring your campaigns: - Whatever promotional
strategies you use, you should time your activities to reach your target
customers when they are most receptive. You should develop
strategies that combine both long and short-term activities - e.g.
special offers or competitions. 51
3.3.Establishing Marketing objectives

Marketing objectives set out what a business wants to achieve from its marketing
activities.
They need to be consistent with overall aims and objectives of the business.
They also provide an important focus for the marketing team.
Marketing objectives therefore need to be consistent with the purpose of marketing.
They also need to be consistent with and support the overall corporate (business)
objectives:
What makes a good marketing objective? It is often said that an effective marketing
objective meets the SMART criteria:
This term stands for: S=Specific, M=Measurable, A=Attainable, R=Realistic and
T= Time bounded

52
CONT..
Benefit of Effective marketing objectives:
• Ensure functional activities consistent with corporate objectives
• Provide a focus for marketing decision-making and effort
• Provide incentives for marketing team and a measure of success / failure
• Establish priorities for marketing resources and effort.
• Some of marketing objectives are:
A. Increasing Sales
B. Improving Product Awareness
C. Establishing Yourself in the Industry
D. Brand Management 53
Self-Check -3

• Directions: Answer all the questions listed below. Illustrations may be

necessary to aid some explanations/answers.
1.Discuss marketing objectives
2.Differentiate market and marketing
3.When planning and scheduling the mix of promotional activities the
organisation will use, there are many factors that must be considered.
Discuss them
4. Elaborate Marketing strategy

54
LO4.Implementing marketing activities

Introduction
Marketing activities are collectively form the "marketing mix" that
describes how a company produces, prices, places and promotes a
product or service within a market.
A company that produces multiple products, or a service provider that
offers services to different markets, often uses a different marketing
mix for each offering. Each distinctive marketing program requires its
own activities.
Product or service pricing requires a company to analyze each
commodity's market, compare competitors' prices for similar
products or services and decide what price the market will accept.
55
4. 1. Establishing Criteria to measure impact and success of promotional
activities

Evaluation of the organization’s promotional campaign should involve a review of each

element of the promotional mix.
The success of the promotional campaign in achieving the overall promotional objectives
should also be assessed, based on the analysis of each promotional mix element.
Ultimately, the impact of promotional activities should be assessed based on their
performance in meeting the promotional objectives of the organization.
A. Measure the impact of promotional activities
 Establishing a cause-and-effect relationship between promotional activities and the
subsequent benefits to the organization is difficult.
 However, in determining the effect of promotional activities, there are several sources of
feedback and data that can provide insight into the impact of promotional activities on the
performance of the organization.

56
CONT…
Sources of data on the impact of promotional activities include:
• Sales figures
• Brand awareness
• Customer surveys
• Informal discussions with customers
• Informal discussions with staff
• Focus group discussions tracking of website visits
• Market share data

57
4.2. Making Adjustments to the promotional strategy, product distribution
promptly to ensure consistency of promotion.

Marketing teams must adjust their marketing mix strategies

accordingly to adapt and succeed in a rapidly changing media
environment.
Adjustments to Promotion: - The three most common adjustments
to the promotion strategy are:
• Adjust your advertising
• Generate publicity
• Promote sales

58
CONT..
Adjustments to Placement or distribution: - Placement or
distribution moves products from the producer to the consumer.
With the Internet and social media websites, consumers now have
access to more channels than ever to research, purchase and evaluate
products.
Both small and major brands offer e-commerce websites that allow
web users to browse products and share their 'wish lists' or purchases
with friends across social media websites.

59
CONT…
Product Adjustment/Modification:- It is normal for products to be
changed several times during their lives.
 If a change can provide superior satisfaction and win more initial
buyers and switchers from other brands, then a change is probably
warranted.
Yet there are definite risks involved: a dramatic increase in
product quality might price the existing target consumer out of the
market.
Similarly, the removal of a particular product feature might be the
one characteristic of the product considered most important by a
market segment.
•  60
Approaches to distribution
1.Intensive distribution: (also known as mass distribution):- A marketing
strategy under which a company sells through as many outlets as
possible, so that the consumers encounter the product virtually
everywhere they go: supermarkets, drug stores, gas stations, and the
like.
Soft drinks are generally made available through intensive distribution.
2.Selective distribution: Means that the producer relies on a few
intermediaries to carry their product. 
This strategy is commonly observed for more specialized goods that are
carried through specialist dealers.
 Example: top range cosmetics brands distributed in specialized perfume
and cosmetic shop
61
Cont..
3.Exclusive distribution:  Means that the producer selects only very few
intermediaries. 
Exclusive distribution occurs where the seller agrees to allow a single retailer
the right to sell the manufacturer's products.
For example; top range cars, offering the exclusive distribution to a few car
dealerships in each country.
A distribution channel strategy enables you to sell to customers in
geographical areas or market sectors that your direct sales team cannot reach.
You can choose from a number of distribution channels, including wholesalers,
retailers, distributors and the Internet.
Each channel gives you different options for dealing with customers and
prospects.
62
Cont..
The main point be considered while selecting right distribution
channel:
Reach
Cost
Contribution
Support
Customer Service

63
Self-Check -4
• Directions: Answer all the questions listed below. Illustrations may be
necessary to aid some explanations/answers.
• 1. Describe the main point be considered while selecting right
distribution channel
• 2. Discuss three approaches to distribution
• 3. To ensure consistency of promotion, making adjustment to product
distribution , and promotional strategies are important. Discuss them.

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LO5.Evaluating marketing performance

Market Performance
The term market performance refers to the economic results that flow
from the industry as each firm pursues its particular line of conduct.
Society has to decide the criteria for satisfactory market performance.

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5.1. Monitoring Product, pricing and distribution policies

Product policy:-is strategic rule or rules covering how a good or service

is promoted to potential consumers.
A typical product policy created by a business for a manufactured
product might attempt to manage how the item will be perceived by its
target market and could also contain information about how durable
the product is.
Product policy is concerned with defining the type, volume and timing
of products a company offers for sale.
 The product policies are general rules set up by the management itself
in making product decisions.
Good product policies are the basis on which the right products are
produced and marketed successfully. 66
CONT..
A product policy generally covers the following:
Product Planning and Development
Product Line
Product Mix
Product Branding
Product Positioning
Product Packaging

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Cont…
Pricing Policy
A pricing policy is a standing answer to recurring question.
 A systematic approach to pricing requires the decision that an
individual pricing situation be generalized and codified into policy
cover­age of all the principal pricing problems.
Policies can and should be tailored to various competitive situations.
A policy approach which is becoming normal for sales activities is
comparatively rare in pricing.

68
CONT…
The following considerations involve in formulating the pricing policy:
i) Competitive Situation
ii) Goal of Profit and Sales
iii) Long Range Welfare of the Firm
iv) Flexibility
v) Government Policy
vi) Overall Goals of Business
vii) Price Sensitivity
viii) Routinization of Pricing

69
CONT…
Objectives of Pricing Policy: The pricing policy of the firm may vary from
firm to firm depending on its objective.
In practice, we find many prices for a product of a firm such as wholesale
price, retail price, published price, quoted price, actual price and so on.
While setting the price, the firm may aim at the following objectives:
i)Price-Profit Satisfaction
ii) Sales Maximization and Growth
iii) Making Money
iv) Preventing Competition
v) Market Share
70
CONT…
vi) Survival,
vii) Market Penetration
viii) Marketing Skimming
x) Satisfactory Rate of Return

71
Distribution policy
The distribution policy is the marketing tool that links production with
consume. The definition of this policy will allow determining the way
we are going to make the product arrive at the final consumer, which
will depend on the distribution chain link we are at (producer,
intermediary or retailer)
The decisions we will have to make are the following:
Choose the distribution system or strategy
Choose the distribution channels

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 5.2. Making an objective assessment of the marketing plan and implementation

Objective assessment of marketing plan includes:

• Cost benefit analysis
• Break-even analysis
• Asset valuation.
1.Cost benefit analysis is a process by which business decisions are analyzed.
The benefits of a given situation or business-related action are summed, and
then the costs associated with taking that action are subtracted.
2.Break-even analysis evaluates whether the firm will be able to break-even -
that is cover all its costs - with a particular price. This is important because a
firm must cover all costs in the long run or there is not much point being in
business.
 Break-even point is the level of quantity at which the firm’s total cost will
just be equal to its total revenue. 73
CONT…
In other words, it is that quantity that makes profits zero. Break- even
pricing is setting price to break even on the costs of making and
marketing a product, or setting price to a make a target profit.
3. Asset valuation is the process of assessing the value of a company,
real property or any other item of worth, in particular assets that
produce cash flows.
Asset valuation is commonly performed prior to the purchase or sale
of an asset or prior to purchasing insurance for an asset.
Asset valuation can be based on cash flows, comparable valuation
metrics or transaction value.
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 Self-Check -5
Directions: Answer all the questions listed below. Illustrations may
be necessary to aid some explanations/answers.

1. Describe break-even analysis

2. Discuss cost –benefit analysis
3. Discuss factors Involved in Pricing Policy.
4. What is product policy?
5. What is pricing policy?
6.What is distribution policy?

75