* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
Download f. `4y 4"`, - WSU Research Exchange
Ambush marketing wikipedia , lookup
Marketing communications wikipedia , lookup
Marketing research wikipedia , lookup
Perfect competition wikipedia , lookup
Pricing strategies wikipedia , lookup
Price discrimination wikipedia , lookup
Target audience wikipedia , lookup
Viral marketing wikipedia , lookup
Consumer behaviour wikipedia , lookup
Digital marketing wikipedia , lookup
Guerrilla marketing wikipedia , lookup
Marketing plan wikipedia , lookup
Multi-level marketing wikipedia , lookup
Grocery store wikipedia , lookup
Integrated marketing communications wikipedia , lookup
Product planning wikipedia , lookup
Youth marketing wikipedia , lookup
Neuromarketing wikipedia , lookup
Marketing mix modeling wikipedia , lookup
Direct marketing wikipedia , lookup
Target market wikipedia , lookup
Multicultural marketing wikipedia , lookup
Street marketing wikipedia , lookup
Advertising campaign wikipedia , lookup
Marketing strategy wikipedia , lookup
Food marketing wikipedia , lookup
Global marketing wikipedia , lookup
Sensory branding wikipedia , lookup
Sci S AGRICULTURAL EXTENSION SERVICE 537 W35 WASHINGTON STATE UNIVERSITY (0-AJ c_ l ;;L EXTENSION WORK IN AGRICULTURE A o ·lioME ECONOMICS IN COOPERATION WITH U.S. DEPARTMENT OF AGRICULTURE PULLMAN, WASHINGTON no./b5 ~~------~--------------------------------------------------------------------~ I 1.,. ,, April 1960 Revised TO MARKET T 0 f. '4y 4"', 2StBso E.M. 1658 MARKET . A farmer's responsibility isn't finished when he's produced something because production and marketing are part of the same process • . • supplying the needs of consumers. Agricultural production in Washington is more than eight million tons every year. These products are either marketed directly or fed to livestock and marketed in that form. Marketing includes everything that happens to a product from the farm to the consumer's table. That means everybody is interested in marketing and should understand it. Better .-------------------., knowledge can lead to greater efficiency. Increased Highlights efficiency at any marketing stage cuts costs and To Remember increases profits. In our economy these profits are reflected either in better prices to farmers Practically ·all farm or in lower prices to c.onsumers . • • and many products must be processed. times to both • . Only small quantities of any product are sold at a given time. . Quality varies widely. • Many products must be stored for year-round use. • Some marketing processes can be done on the farm. Most of them are now done off the farm. • Steps in marketing are: assembly, standardization, transportation, processing, storage, risk bearing, wholesaling, retailing, financing, buying and selling. Food marketing costs about 24 and a half billion dollars a year in the United States. Most of us agree that we want a marketing system that will give the consumer what she wants at a price she will pay and still give the farmer a price that will keep him in business. Of course, the processor has to be paid too. Marketing costs pay for services. Apparently the consumer wants these services, at least they are increasing. These services help the producer sell in volume and at a good price. Generally speaking, marketing costs increase slower than farm product prices and they also go down slower during times of falling prices. Let's look at the major steps in marketing. E. M. 1658 Page 2 ASSEMBLY Most commodities have to be assembled. Production from one farm is too small for the farmer to handle all the steps in marketing. Assembly methods vary by commodities. Examples are: auction markets for livestock; metropolitan bottling plants for milk; elevators for grain; processipg and marketing plants for poultry and eggs. STANDARDIZATION Products vary in quality, in size and other characteristics such as color in fruits. Consumers like products of uniform quality. A system of generally understood standards makes it easier for buyer and seller to get together on price. Some of these standards are set by Government, such as choice cattle, No. 1 potatoes. Some standards have been set by the trade. Through the use of standards buyers can buy by description rather than by inspection. This cuts marketing costs. TRANSPORTATION Producers, processors, consumers all have a stake in transportation. For every United States consumer more than a ton and a half of farm products leaves the farm every year. The average housewife carries home more than 1, 600 pounds of food products every year for each person in her family. Transportation costs represent between five and six peJ;" cent of the consumer's food dollar. Food products are grown in widely separated parts of the country but most of them are consumed in only a few places. About one-quarter of the country's population is concentrated in five metropolitan areas. Many of these products have to move quickly because they are perishable. STORAGE Many pro.d ucts ...have a -s l:!ort harvest season. But most of us like to eat every day. We also like variety• • • strawberries in January; fresh lettuce the year around. To get this, · food must be -s-tored. Some storage is on the farm, some in the various market channels and some by processors. Many perishables require cold storage. Refrigerated storage space in 1953 was 711,000,000 cubic feet. We have stored as much as 750 million pounds of fresh and cured meats. Peak butter storage was 125 million pounds. Off-farm grain storage space amounts to about two billion bushels. Storage involves many problems to maintain quality and to have supplies on hand when and where the consumer wants them. RISK BEARING Farmers assume many risks in growing crops. The risks don't stop with the farm, they continue until the product is used. Two principal risks after products leave the farm are change in quality and change in price. Perishables can spoil quickly. Some products are very sensitive to price ch4nges. For commodities that store well, losses from price changes can be hedged by futures markets. FINANCING All these steps in marketing take money. Most of the operators in the various fields use arrangements such as bank loans or loan accounts. Sometimes the farmer helps the credit operations by not receiving his pay until the processor moves his commodity. The retail consumer who pays cash cuts the need for credit. E.M.l658 Page 3 BUYING This includes the steps taken in seeking out a product from the sources of supply. Buying can be of raw materials for processing or resale. The middleman may buy raw materials and process them for other middlemen before they pass into the hands of the final consumer. ~. .... SELLING This step must be broadly interpreted. It includes many of the steps in merchartdising, including such things as store displays, adve~tising, and other practices to influence demand. Decisions regarding size of package, unit of sale, best channels to use, proper time and place to sell, all are decisions included in selling. Market research activities to find out how and where an article can best be sold are included • WHOLESALING The wholesaler is between the processor and the retailer. He buys in carload lots and sells in case lots. This gives the consumer a wide selection to choose from and still lets him buy at a relatively low cost. I c ~( ,. ./. RETAILING The United States has more than 375,000 stores selling food. One research study shows 62 per cent of the sales were dry groceries, 26 per cent meat and 12 per cent produce. One fourth of the retail stores do about three-fourths of the business. The margin is about like this: dry groceries 14 per cent; meat 17 per cent and produce 24 per cent. Out of this margin the grocer must pay costs such as: labor, depreciation, interest, taxes, utilities, wrapping material and assume losses such as from spoilage and quality deterioration. PROCESSING The farmer doesn't produce beef steak, flour , butter , or most of the other products the consumer uses. The farmer grows cattle, wheat or milk. Food industries are of three types. { 1) Horizontal Integration : Several plants owned by one firm, each plant doing the same work. Example-cooperative grain elevators. {2) Vert~_s:al Integration: One firm owns several plants each doing a different job. Examp1e - A chain store owns country buying stations, transportation system, processing plants and wholesale establishments. {3) Product Integration: The processor makes many products that add up to a more or less complete line. Example - a miller who makes flour and breakfast foods , from wheat, and adds other dry groceries to complete the line. Farms are becoming more specialized and farmers are doing less of the processing and marketing that used to be done on the farm. Also additional jobs are being done for the consumer by the processing industries. During the past 20 or 30 years the number of farm workers on farms has gone down about 30 per cent. During the same period the number of workers in marketing firrrls , including processing, has grown by 30 per cent. E. M. 1658 Page 4 Historically the housewife spends a quarter of her income on food. If she bought the same type and quantity of food with the same amount of processing as existed just before World War II she should now be spending only 17 cents out of every dollar for food. Be she stills spends the quarter and she still buys about the same number of pounds of food every year. So we can conclude that there is more processing. 4/60 pd