AGB341 UNIT 2

AGRICULTURAL MARKETING
ELEMENTS
by
EM Syampaku
 Product Price
•variety •basic price
•quality •discounts
•brand name/trade mark •market price
•age •skimming price
•features •mark up price

target
custome
r market

Communication Distribution
•advertising •channels
•publicity •selling outlets
•sales promotion •coverage
•packaging •transportation
•mass media •physical distribution
 Marketing mix: introduction
• product, price, place, promotion
• also called 4 p’s
• direct commodity flow through the ownership
transfer
• all marketing policies aimed at manipulating
these elements
• exchange failure blamed on these four
elements
 Target customer market
• helps shape the four elements by its characteristics
which include:
• size
• growth rate
• own price elasticities
• consumption trends
• levels of commodity substitution and complementarity
• buying patterns, times, etc
• brand loyalty
• costs of reaching markets
• information flow
 Price
• What is a price?
o unit cost of the commodity being bought
o unit revenue of the commodity being sold
 Types of prices
• cost pricing [cost based/cost plus pricing/mark up
pricing
• return on investment (ROI) pricing
• competitive pricing or market price
• Penetration pricing
• Skimming the market
• Negotiated pricing
• discount pricing
• Pan-territorial pricing
• Psychological pricing
• Prestige pricing
 When is price selection important?
• levels of production and development costs: costs of
production, development, marketing and overhead costs
• generate a target profit from revenues
• prices offered by competitors or for competing products
are also taken into account for pricing
• introducing new products
• placing existing products into new markets
• costs of production are increasing
• competitors change their prices and other elements in the
marketing mix
• balancing prices between individual products in a product
 Product
• unit output or service that a company produces
for conversion into revenues through
marketing
• Product attributes: quality, features and
design
• Branding
• Product package and label
• Product assortment (mix): substitutes,
complements, flankers; lines (lengths), width
Product mix width

Fruits Leaf Legumes Spices

length

vegetables
bananas peas chilli
cabbages
oranges groundnut
rape s
lemons
line

chinese beans
plums
cabbage
soya
pears
Product

lettuce
guavas
broccoli
pawpaw

water
• age of product on the market

growth
development saturation
decline

introduction

sales
volume
time

profits

Figure 2.2: Sales and profit performance in the product life cycle
• Products by own price changes: ordinary
products or giffen products
• Products by income changes: normal
(superior) [necessary/luxuries] or inferior
products
• Products by volume: low/high volume
• Products by speed of sale: slow/fast selling
• Products by appeal to status: prestige/non-
prestige
Distribution
Farm producers

warehouse
warehouse warehouse

processor

Wholesale retailer

retailer

Final consumers
• Importance?
o reaches customers
o influences speed of sales via:
own outlets
merchant middlemen outlets
commission agents
service middlemen
o influences returns inwards/legal issues
o order processing
 Marketing communication
• involves decisions and activities intended pass on
information to consumers in order to sell more of the
product
• customers normally need to be informed of the
product in the target market and be convinced to buy
the product
• method of informing customers depends on the stage
of the product life cycle, location of market, size of
business, level of competition, type of product, and
node of the marketing chain
• four broad methods: advertising, personal selling,
sales promotion, and publicity
 Advertising
• passing on information about the business or product
to target markets by means of written and spoken
word, and by visual material
• examples
 Reasons for placing
advertisements?
• Awareness creation
Provide location information
Communicate features and key benefits
Communicate credibility
• Switching loyalty
• Maintain customer loyalty
• Communicate price value
• Communicate availability
Personal selling
Sales promotion
 Publicity
• Publicity is news about the firm or its products
reported in the press or other media without
charge to the organization
• Examples of publicity are reported events,
press statements, sports sponsorships, and
donations to institutions and charity
 Activity
• Visit any two agricultural market places - one
along the main road and another away from it
– and observe how marketers apply the 4
elements of marketing.
 Assessment
• What do you understand by the following terms:
price, product, communication, and distribution?
• Who pegs the price for maize grain at
aggregation and retail points?
• How do buyers and sellers communicate the
availability of products and conviction that they
buy and sell quality products?
• How do farm input suppliers and buyers
manipulate the distribution channels?
the end