Download Dairy Marketing File

Definitions of marketing
• Marketing is an on going process of moving
people closer to making a decision to
purchase, use, follow or conform to
someone else’s products, services or
values.
• It is a process by which sellers promote
and sell goods and services to buyers in a
market place for a price
Definitions cont’d
• In reference to agricultural commodities,
marketing is the performance of all business
activities involved in the flow of goods and
services from the point of initial production until
they are in the hands of the ultimate consumer
(Kohls and Uhl, 1985).
• Transformation of goods in space, time and form
from producers to consumers.
• Efficiency in the transformation is the target.
Activities in marketing
• Involves a series of activities
• 6P’s of marketing
• Product market:
– Shrinking or growing?
– New or established?
• Price:
–
–
–
–
what price will you sell at?
Premium or undercut competitors?
What will influence the price?
Will you cope?
Activities in marketing
• Promotion
– How will you reach target audience
– What type of communication will work
best?
• Place
– Where will people buy your product?
Cont’d activities
• People
– Quality of personal relationships - client and
company
• Physical evidence-
– product must be available
– Show quality of service
Cont’d
• Process- your firms processes can
give you the edge.
Commodity Marketing
• Refers to basic agricultural products in
their original or have undergone primary
processing i.e milk, beef, cotton, eggs
• Com. Marketing system encompasses all
participants in the production, processing
and marketing involved in the flow of the
commodity from inputs to consumer.
Cont’d
• Marketing systems differ
–
–
–
–
Type of commodity
System of production
Culture and traditions of producers
Level of development of sector and
country.
Stages of agricultural
marketing
• ASSEMBLY- commodity buyers specialising
i.e cattle, milk
• TRANSPORTATION- Trucking companies,
railroads, airlines
• STORAGE- warehouses, public
refridgerated warehouses
• GRADING & CLASSIFICATIONOfficials, merchants
Cont’d
• PROCESSING- processing plants
• PACKAGING- makers of packaging
material
• DISTRIBUTION & RETAILINGRetail stores, wholesalers
Milk and milk products
• Assembly- direct from farms to
processing plants
• Tankers collect from farms at a regular
schedule
• Undertaken by cooperatives/ bulking
groups
• Constraint in transportation is road
infrastructure. During wet season milk may
stay uncollected
Cont’d
• Trucks for other produce are multipurpose
but not for milk hence affecting economics
of transportation of milk
• Mostly rural household keep a cow or two
for production of milk for household and
surplus is sold locally. In addition to this
exchange four channels for distribution of
milk can be identified
Channels for distribution
of milk
• Depot salesmen- marketing board or
dairy companies employ their own
sales force
• Wholesalers as number of outlets
increase there is need for
intermediaries to operate between
sales force and retailers
Cont’d
• Contractors- appointed to routes
that cooperative or dairy companies
find uneconomical
• Home deliveries- doorstep deliveries
The milk marketing channel
Milk Marketing Channels
Number of intermediaries
Producer-consumer
0
Producer-milk hawker-consumer
1
Producer-processor-consumer
1
Producer-processor- retailerconsumer
2
Producer-dairy co-operative processor- retailer- consumer
3
Producer-milk transporterprocessor - retailer-consumer
3
Producer-milk trader-processorretailer-consumer
3
Producer-dairy coop - milk
transporter-processor-retailerconsumer
4
SUMMARY
• THE CHOICE OF PRODUCT AND
TECHNOLOGIES MUST BE SUITED
TO THE SCALE AND LOCATION OF
THE OPERATION WHILE THE
PRICE, PROMOTION AND
PACKAGING MUST MEET LOCAL
REQUIREMENTS