pbl1 final

8/14/2019 PBL1 Final

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Food & Fiber System

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All economic activities linked to agricultural production, suchas machinery repair, fertilizer production, food processing,and manufacturing, transportation, wholesale and retaildistribution of products, and eating establishments

Also included are the economic activities that link theproduction of plant and animal fibers and hides to fabric,

clothing and footwear.


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Food & Fiber System

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Figure 2 Linkage between Food and Fiber Sector

Source : Kriesel and Doherty, The University of Georgia


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Agricultural Agro-BasedProduct

Raw Material to otherindustries or end-usedproduct (ready to eat)

Set up proper amount aswanted and extend time for

storage by preservative

Non-seasoning and Qualitycan be controlled

Production can be doneeverywhere

Raw Material

Bulky and Perishable

Seasonal and Qualityvariation

Geographic concentration of production


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Ninth Malaysia Plan To StrengthenAgriculture And Agro-based Industry

During the Eighth Plan period, the agriculture sector achieved ahigher rate of growth than targeted and contributed towardseconomic growth and export earnings.

Ninth Plan period, the development of the agriculture sector will beintensified to serve as the third engine of growth

Target specific policies and strategies will be implemented toexpedite the transformation of the agriculture sector into a modern,dynamic and competitive sector including with respect to agro-based processing activities and agricultural entrepreneurdevelopment.


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Programme

Development Expenditure And Allocation For Agriculture,2001-2010

8MP Expenditure

9MP Allocation


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Food security Plan

Apr 08 ,the cost of the Governments food securitystrategy to counter the worldwide increase in prices,especially rice, will total RM4bil.

Feb 09,government allocate MYR5.6bn to improvingfood security with the aim of raising self sufficiency inrice to over 85% in 2010.


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Defining a market oriented mission : A statement of the organizations purpose what it wants to accomplish in the larger

environment.

A market oriented mission statement defines the business in terms of satisfyingbasic consumer

Setting company ob jectives and goals

The companys mission needs to be turned into detailed supporting objectives for each level of management . Each manager should have objectives and beresponsible for reaching them.

Designing the b usiness portfolio Guided by the companys mission statement and objectives, management now must

plan its business portfolio the collection of businesses and products that make upthe company .

Business portfolio planning involves two steps .

First the company must analysis its current business portfolio and decide whichbusinesses should receive more, less or no investment .


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Different dimension of strategy (the 3 Rs)

Products

p1 p2 p3

M1

M2

M3

Markets

Strategy as Routes :The direction or paths the firm takeswith regards to moving into newProducts and markets over time

Strategy as Responses :How a firm reacts to challengesFrom the competitors

The competitor The firm


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Strategy as Rationale :How or on what basis the firmChooses to compete

Bases of competitive Advantages

CostleadershipStrategy

DifferentiationStrategy

FocusStrategy


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The firm must develop marketing strategies that enable it to:

Achieve clear com petitive advantages o ver its rivals .

Marketing strategies should create marketing advantages that can besustainable such that it would be difficult for the rivals to catch up or emulate.

Create a response amo ng its target customers.

Marketing strategies must not only impact on competitors they need tocreate positive response from customers, such as increased sales and repeatbuying .

Turn in pos itive contributions to the bottom line.

Marketing strategies must help the company remain profitable and generateadequate reserves to fund ongoing marketing campaigns.

Even not-for-profit organizations rely on marketing to help them build financialreserves to carry out their


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The strategy plan defines the companys overall mission and objectives.Marketings role and activities are shown in under figure . Which summarize the major activities involved in managing marketing and the

marketing mix.

ProfitableCustomer

Relationships

Marketing

Intermediaries

Suppliers

Competitors

publics

Product

price

promotion

place

Market positioning


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Consumers stand in the center .The goal is to build strong and profitablecustomer relationship .

Next comes marketing strategy:

The marketing logic by which the company hopes to achieve strong and profitable customer relationships .it involves deciding which customers to serve (segmentation and targeting ) and with what value proposition

(differentiation and positioning )

Companies know that they cannot profitability serve all consumers in a givenmarket at least not all consumers in the same way .thus each company

must divided up the total market , choose the best segments , and designstrategies for profitably serving chosen segments. This process involvesthree steps :

Market segmentation

Target marketing

Marketing positioning


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Market segmentation :

Dividing a market into distinct groups of buyers who have distinct needs,characteristics , or behavior and who might require separate products or marketing mixes.

Consumers can be groped and served in various ways based ongeographical , demographic, psychographic and behavioral factors .

Target marketing :

The process of evaluating each market segments attractiveness and selecting one or more segments to enter .

After a company has defined market segments, it can enter on or manysegments of a given market.

Market positioning :

Arranging for a product to occupy a clear , distinctive , and desirable place relative to competing products in the minds of target consumers.

After a company has decided which market segment to enter, it mustdecide what positions it wants to occupy in those segments .

A products position is the place the product occupies relative tocompetitors in consumers minds.


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The Four P s of the Marketing Mix

.

TargetCustomers

IntendedPositioning

ProductVarityQualityDesignFeaturesBrand namePackagingServices

Promotion AdvertisingPersonal sellingSale promotionPublic relations

PriceList priceDiscount

AllowancesPayment periodCredit terms

PlaceChannelsCoverage

AssortmentLocationsInventoryTransporting

logistics


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An effective marketing program blends of the marketing mix elements into acoordinated program designed to achieve

the companys marketing objectives bydelivering value to customers

product

place

price

Promotions

Competitiveadvantage

Positioningintegration

Achieving integration, competitiveadvantages and positioningin the Market Mix


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Marketing analysis , planning , implementation , and control

PlanningDevelop strategic

Plans

Develop marketingPlans

ImplementationCarry out the

Plans

ControlMeasure results

Evaluate results

Take correctiveaction

Analysis


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Marketing analysis : managing the marketing function begins with acomplete analysis of the companys situation . The company must analysisits markets and marketing environment to find attractive opportunities and

avoid environment threats.

Marketing plan : a detailed plan for a product or brand that assesses thecurrent marketing situation and outline marketing objectives , a marketingstrategy , action programs, budgets , and controls.

Through strategic planning , the company decides what it wants to do witheach business unit.

Marketing planning involves deciding on marketing strategies that will helpthe company attain its overall strategic objectives.

Marketing implementation : The process that turns marketing strategies and

plans into marketing actions in order to accomplish strategic marketingobjectives.

Marketing control : the process for measuring and evaluating the results of marketing strategies and plans, and taking corrective action to ensure that

objectives are achieved .


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Marketing Plan

A set of objectives, strategies, an tactics thatguide a farmers production and marketingdecision.Consist of:

Current market positionMarket overviewMarketing objectivesMarketing strategiesMarket SWOT analysis


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Current Situation

The rising commodity prices > livestock industry beinghard hit by high corn prices > rising cost of feed.

The retail price of sugar in Malaysia -MYR1.45/kg and

MRY1.55/kg. below the rate in neighboring countries, causing problems of

smuggling.

One in six countries in the world face food shortages severe droughts that could become semi-permanent underclimate change.


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Commodities

Trade of Agriculture Sector

Export

Import

Trade


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Marketing Objectives

Goals to be accomplished by anorganization's overall marketing programsuch as sales, market share, or profitability. Agood objective will be measurable,attainable, and socially significant.

G l


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Goal

Jun 09, Fisheries Department of Malaysia set a target to produce 507,558 tonnes of aquaculture products

by 2010. The involvements of a total of 11,000 participants aretargeted at the end of 2010.

NATIONAL TARGET TOWARD THE YEAR 2015 Increase domestic beef production from 21.78% to 40% by

increasing cattle breeders population to 0.6 million heads. Increase domestic mutton production from 8.99% to 35% by

increasing goat breeders population to 1.5 million heads.


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Marketing Strategies

A plan to achieve market goalexample ; one grocery store may use the strategyof low prices to attract consumers, another mightemploy the strategy of high quality.


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The Marketing Mix

TargetMarket

Product Price

Promotion Place

Customers Competition

Market Conditions


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PRODUCT COMPONENT (1) Core benefits

What the product actually does - the main functions of the product E.g. washing machine it cleans clothes Cinema ticket it lets you see a film

(2) Tangible or physical elements

What the product is made of; what it looks like; dimensions or durationE.g. 500g of ice-creamA flat-screen, plasma television which is HDTV compatible

(3) Other product ("augmented") benefits

These are the extra elements which add to the perceived value of the product inthe eyes of the consumer

Other product benefits can be tangible (e.g. materials, weight, extra features) orintangible (e.g. brand name, after-sales service, reputation for reliability)E.g. free installation, full money-back guarantee


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Branding

One definition of a brand is as follows:A name, term, sign, symbol or design, or a

combination of these, that is intended toidentify the goods and services of one businessor group of businesses and to differentiatethem from those of competitors.

-process of using symbols to communicate the qualities of aproduct made by a particular producer


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Packaging Products

Packaging

Physical container inwhich a product issold, advertised, or

protected


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Labeling

Can help market the product

Nonaerosol Bio-Degradable Recyclable Ozone Friendly Fat Free Salt Free Sugar Free 30% More Free!

Contents Under PressureDo Not Puncture

Address issues of

consumer safety

FlammableDo Not Use Near Open Flame

Child Proof Cap


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Price

Setting the right price is an important part of effective marketing . It is the only part of themarketing mix that generates revenue(product, promotion and place are all aboutmarketing costs).


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The pricing objectives1. To Maximise Profits2. To Meet a Specific Target Return on Investment (or on net

sales)3. To Achieve a Target Sales Level

4. To Maintain or Enhance Market Share5. To Meet or Prevent Competition


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Odd-ending pricing $.99, $.49 endings

How about $.50 ending?

Not for FarmersMarket


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Quantity discount pricing- One for $2.00 and three for $5.00

- Encourage people to buy more


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Strategies for existingproducts

Price leader, price follower, price takerPre-emptive pricing

-Setting prices low to deter new entrants to the marketPrice discrimination-Charging different prices to different market segments, based

on customer willingness to pay

Pl


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Place

Depend on the target markets needs & wants,and where you have a competitive edge.

Farmers markets Pick-your-own farms Farm stands/ Value-added products Entertainment farming/Agri-tourism

Community supported agriculture (CSA) Cooperatives Mail order/ Internet Wholesale: supermarket, restaurants, brokers, etc.

Promotion


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Promotion

1. Advertising

Paid communication - TV, radio, newspaper, etc.Change mind dont change behavior Select the appropriate media -What do they listen?What do they read?

2. Sales promotionCoupons, in-store displays, trade shows, samples, in-store demonstrations, and contests.

Change behavior - Most recalled advertisementSupplement and coordinate efforts in the advertisingand personal selling efforts.


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SWOT ANALYSIS

S: strengthW: weakness

O: OpportunityT: Threat


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StrengthStrong government support

Established network of producers, millers and wholesalersWide variety of species available

Excellent infrastructureLow cost & High returns

High commercialized with modern production technologyStrong expanding downstream activities

Excellent macroeconomic climate

WeaknessSmall Portion of Class 1 land

Lack of R&D and regulatory frameworkHighly depended on imported feed resources

Labor shortages Low quality products among SMEs

Inconsistency of supply due to traditional cultivation system Rising cost of production

OpportunityIncreasing demand for high quality

Emerging new marketsOpportunity for reverse investmentPreference for eco-friendly product

High potential to be major producer for halal foodImport substitution

Potential for new product development

Threat

Competition for land & labor for others economics activitiesDisease and environmental problems

Price instability of imported feedstuffsIncreasing non-tariff barriers such as labeling and sanitary

Competition from other producing state

AGRICULTURE SECTOR


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Approaches to the studying thefood or marketing ofagricultural produce

The Functional Approach

The Institutional Approach

The Behavioral System Approach


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The Functional Approach

As a major specialized activity performed in accomplishing themarketing process or breakdown the processes into function

There 3 functions which areExchange functions

BuyingSelling

Physical functionsStorageTransportationProcessing

Facilatating functionsStandardizationFinancingRisk bearingMarket intelligence


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The Institutional Approach

Consider the nature and character of the variousmiddlemen and related agencies and also the arrangementand organization of the marketing activitiesFood marketing middlemen can be classified as follows

Merchant middlemenRetailersWholesalers

Agent middlemenBrokersCommission men

Speculative middlemenProcessors and manufacturersFacilitative organizations


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The Behavioral System Approach

Particular marketing firm or an organizationof firm such as the marketing channel can beviewed as a system behavior

Four major type problems associated withbehavioral systems

1. Input-output system

2. Power system3. Communication system4. Adapting to internal and external changes


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The Prerequisites to an

Efficient Economic System

A free market economy

Prices reflect the full value of resourcesA high degree of interaction betweenconsumer and producers


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Economic Efficiency

How well these three prerequisites are metlargely determines the level of economicefficiency present in an economic system.

The higher the level of economic efficiency, thehigher the level of overall consumer satisfaction

and producer profits and maintaining a high levelof economic efficiency should be a major

concern of a society.


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The Structure Conduct


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The Structure-Conduct-Performance Model

ConductStructure Performance

The model is based on the notion that the way firms are organizedin a market ( their structure ) tells a great deal about how they make

decisions ( their conduct ), which in turn influences the level of efficiency and fairness present in a market ( their performance )

Bridge the gap between the conflicting needs of producers and consumers,


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Perform the 9 functions of marketing .

By performing these 9 functions, marketing adds the 4 utilities,

which Overcome the separations of time, space, value, and ownership

and

Raise the level of efficiency in the economic system .

This makes consumers and producers better off.


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How do they contribute toGDP? GDP is the value added in production through theuse of the land, labor, capital and managementresources

Measured in term of value added

(the difference between the sale of goods and the

purchase of raw materials or services from other s

Trade of Agriculture Sector (2008)


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pbl1 final

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