Step 3:

Market Chain Study

(MCS)

Understanding the Market

 Capacity Building Process: Pag-aaral ng Negosyo
The agro-enterprise clustering approach

PAG- IMPROVE 8
Sustained
Enterprises
7 1
Test Marketing Partnership Building,
Site Selection and
PAG-ORGANISA
PAG- Cluster Formation

SASAGAWA The PROCESS

6 Farm production and 2
Product Supply market preparation Product Selection
and Supply
Organizing Market engagement Assessment

3
5
Agroenterprise Plan Market Chain PAG-AARAL
and Mobilization Study

4
Cluster
Commitment-
setting
PAGPLANO

Moving Together to the Market: The Clustering Approach to Agroenterprise Development for Small Farmers. Second Edition. Copyright © 2014 CRS
 Learning Objectives
1. Explain the importance of knowing
your market.
2. Discuss the MCS activities & tools.
3. Plan how to conduct the buyer
interview.
 Constraints why farmers cannot be
competitive Market Chain Actors and
Business Partners

Lack
Access to
Lack
Affordable
Access Lack
Capital
to Market Infrastructure
Info Support

Lack
Lack
Organizational
Business
Support
Skills

4
Key Challenges in engaging
markets

Product Product
Quality Quantity

Market

Delivery
Price
Schedule
 What buyers think about
small farmers…

“Small farmers are not reliable

suppliers”

WILLINGNESS CAPACITY

“Has product but Short supply or not

does not keep competitive
promise”
TRADITIONAL BUYERS INSTITUTIONAL BUYERS

1. Have no formal 1. Have formal

arrangements with farmers arrangements with farmers
before buying their product before buying their product

2. Take part in spot trading 2. Negotiate pricing- agreed

(prices changes daily or before purchase
hourly based on supply and
demand.

3. Are easily accessible to 3. Are accessible to farmers

farmers in rural areas (major as part of formal
trading and urban centers) arrangements
 Market Chain Study (MCS) – What?

MCS is a process to gather information on the

market actors (both buyers and BDS providers),
marketing activities,
costs and income,
opportunities & constraints
related to the movement of the selected product.

Page 28
 Market Chain Study – Why do it?

MCS information will help farmers

fully understand their market choices and
decide which market(s) to enter, the kind of
marketing relationships to establish, and the
value addition activities to earn more income.

Page 28
 MARKET
a place where products
are bought and sold.
(Merriam-Webster Dictionary)
 Markets

SAGREX Hotels &

Restaurants

Soyuz
Foods
Internationa
l
 Market Chain
1. Main Chain Actors

Farmers Trader/ Trader/ Consoli

Processor Retailer Consumer
Agent Assembler dator

SUPPLY DEMAND

2. Business Development Services Providers

Finan- Input Trans Packa- Infra- Research Extension/ Organizing/

cing Supply -port ging structure Advisory Training
FEE BASED FREE SERVICES
Value Chain -
how the value of
a product is
increased as it
passes through
different stages
or links in the
chain.
MCS information will
✔ help farmers fully understand their market choices

✔ aids the farmers in deciding whom/where to sell their

products

✔the kind of marketing relationships to establish and

✔guides the farmers in identifying ways to increase value

of their products

✔new market opportunities

 Market
Visits
Checklist

of Interview
Outputs of buyers
& BDS
in
Agroenterprise
MCS Objective
Decision
on target
buyers

Marketing
projections
 Who will do the MCS?
• the Local Study Team or LST composed of at
least 5 members:

1) LGU Technician
2) DARPO/ AEF
3) Academe/MFI
4) Farmer representative or/
5) Cluster Leader
 Market Chain
Mapping
Conducting the
Market Chain Study
Data
Gathering
(visit & price
behaviour)

MARKET
CHAIN
STUDY Data
Consolidation
and Analysis

Agroenterprise
Objective
Example of Market Chain Map
Example Market Chain Map
Example of Market Chain Map
 Market Chain
Mapping
Conducting the
Market Chain Study
Data Gathering
(visit & price
behaviour)
MARKET
CHAIN
STUDY Data
Consolidation
and Analysis

Agroenterprise
Objective
 2 sets of activities for Buyers Interview
• Interview Preparation

• Actual Interview
• Interview Preparation

• Actual Interview
 Tips in
Conducting
the Market
Visit and
Interview
with
Potential
Buyers
MARKET VISITS/ INTERVIEWS

ROBINSONS
SUPERMARKET

THE LIVING FARM

Data Gathering
MARKET VISITS/ BUYERS & BDS INTERVIEWS

Data Gathering
MARKET VISIT/ BUYERS INTERVIEW

Charoen Pokphand Foods

Philippines Corporation
(Thailand company located in
Gerona, Tarlac)
Two core business lines: 1)
Livestock Business which
comprises of broiler, layer and
swine and 2) Aquaculture Business
which mainly focuses on shrimp
and fish.

Data Gathering
 Market Visits/ Buyers Interview

1.Communicate with the buyer or

BDS providers 2. Assign

3. Review
 Actual Interview
1. Conduct Interview at a time & location convenient to
buyer or BDS Provider
2. After interview, summarize, discuss & analyze the
interview responses using the buyer comparison Table.
 MCS
Data Gathering - Buyers
• Market Visits
Data (Interview of buyers with
Gathering observation)

To find out the following:

• Demand of the selected product
• Buying conditions for the selected
product
• Other products that are in
demand
 MCS:
LST presentation of results and AE objective

• Agroenterprise Objective
Presenting the
Formulation
results & AE
Objective

To collectively market to number

buyers, namely: __name of buyers__
a total quantity of ___ good quality
__product__, in _frequency of
deliveries, from _period of
deliveries__; coming from ___ clusters
with altogether ___ participating
farmers, and earn a net marketing
income of P_____________.
Semi-structured Interview Question
Topics for discussion with buyers
• Product quality specs and packaging
Ano po ang mga katangian o kalidad “quality” na hinahanap
ninyo sa mga binibiling produkto?

• Frequency of buying
Gaano kadalas ka namimili?

• Minimum and maximum quantity purchased

Gaano karami ang inyong binibili?

• Product Packaging
Ano ang maayos na paglagyan o packaging ng produkto?
Semi-structured Interview Question
• Buying price at present
Magkano ang bili ninyo ngayon?

• Lowest and highest buying prices (past 12 months)

Magkano ang pinaka mababa na presyo ng nakaraang 12 na
buwan? Ano naman ang pinaka mataas?

• Payment arrangement (cash or term)

Paano ang bayaran? Cash o terms? Kung terms, gaano katagal
(ilang araw, linggo, buwan)

• Delivered or picked up
Pick-up po ba o delivery? Mayroon bang service fee at
magkano?
Semi-structured Interview Question
• Months (3) of highest and lowest supply/price (past 12
months)
Sa nakaraang 12 buwan, ano ang tatlong buwan na pinakamataas/
pinakamaba ang supply/presyo?

• Present sources of supply

Saan galing ang mga produkto na binibenta mo?

• To whom product is sold

Saan ninyo ibinebenta ang produkto?

• Willingness to buy from farmers

Interesado ka bang bumili mula sa amin?

Note: After interview, summarize, discuss & analyze the interview

responses using the Buyer Comparison Table.
 Agroenterprise Objective - Bagumbayan

To collectively market to ___ buyers, namely:

(a) _________ (b) ____________, (c) ______________

21,400 kg of good quality Robusta Green Coffee Bean

within the period of ________(from_____to ______) in
_______ deliveries,
coming from 21 clusters (with altogether 210 members)
and earn a projected net marketing income of
P____________