Download Agricultural Marketing Competitive Strategies and

Agricultural Applications Session
International Scientific Conference
eRA – 6
The SynEnergy Forum
The Conference for International Synergy in Energy,
Environment, Tourism and contribution of Information
Technology in Science, Economy, Society and Education
T.E.I. of Piraeus
“G. Ritsos” Cultural Centre of Municipality of Egaleo, Greece
Monday, 19/09/2011
Agricultural Marketing Competitive
Strategies and Innovative
Practices in Greece
John Bouris1, Panagiotis Kaldis2, George Alexopoulos3,
Alexia Giannouzakou4 and Dimitrios Tseles5
1Dept.
2Dept.
of Business Administration, T.E.I. of Athens, Greece,
E-mail: [email protected]
of Oenology and Beverage Technology, T.E.I. of Athens, Greece,
E-mail: [email protected]
3,4Dept.
T.E.I. of
Piraeus
of Agricultural Economics and Development,
Agricultural University of Athens, Greece,
3E-mail: [email protected] 4 E-mail: [email protected]
5Dept.
of Automation, T.E.I. of Piraeus, Greece,
E-mail: [email protected]
Evolution of farming
• Post war period  Focus on quantity (mainly on adequate
food supplies at “reasonable” prices)
• Today  Focus on quality (concerns on food hygiene and
safety, environmental and biodiversity protection, good care
and treatment of productive animals etc.)
• Farmers’ access to markets is on a competitive basis and
depends on the ability of their products to meet the new set
of criteria
• Market researches stress that customers are willing to pay
more for quality products that meet their concerns
Forthcoming Common Agricultural Policy
of the European Union (2013-2020):
• Central issue
– Farmers should secure a fair income from the sale of their products
on the market and as remuneration for the services they provide to
society under the European agricultural model
• Keywords  creation of public goods
–
–
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Food sovereignty
Preservation of cultivated landscapes
Maintenance the regional identity and culture
Biodiversity / environmental protection
• In this framework:
– Sufficient room for small scale, innovative, locally based quality
production
– Urgent need for innovative collective actions and marketing strategies
– Strategies to “hold down” value added
Innovative Thinking
Initiatives to tackle challenges stemming from:
• increasingly volatile markets and a trend towards falling
producer prices  sustain/create income
• the ever-growing market power of the processing and
marketing sector vis-à-vis producers  added value has to
remain locally
• problems in the marketing of local, regional and premium
products. Specific legislation is in force but needs to be
applied efficiently in order to benefit local and regional
markets  strengthen product/territorial identity
Strategic Reactions of Farmers
Competitive advantages today lie on:
• Cost Rationalisation   (but NOT against quality)
– Training
– Precision Agriculture – Integrated Crop Management
– Modern Technology
– Cooperative/collective actions, etc.
• Product diversification   
– High quality/nutrition value products
– Innovative marketing
• Effective supply chain management   
Innovative Marketing
• product differentiation
– the introduction of distinctive features, attributes, packaging and
appearance in the agricultural products in order to achieve supreme
quality customers’ perceptions
• product branding
– with emphasis in the name, term, symbols, special characteristics etc
intending to differentiate the product of the end-users from those of
the competitors
Available Tools
• Product policy and Product mix policy
– Processing / Diversity / Transparency / Regionality / “Niche” products
/ Quality differentiation
• Communication policy
• Direct sales & Sales policy
Food Distribution Channels (FDC)
• The agricultural product from ‘farm’ or ‘stable’ to
‘plate’ or ‘fork’, passes through alternatives
marketing channels (from zero-level-direct
marketing to N-level marketing channels)
• The FDC should be chosen according to their
efficiency and adaptability to obtain a concrete
target (such as a fair value between agricultural
producer price and consumer price)
• The target is to select the channel which
minimizes the discrepancy between producer and
consumer prices
Local Food Systems - LFS
• The hallmark of local food systems is the
development of direct marketing efforts which focus
on creating strong links and improving trust between
local farmers and consumers, beyond and above
the conventional marketing networks
• LFS
– are based on committed to sustainable social and
economic structures producers who invest on,
and highlight the environmental friendly potential
of agricultural production
– improve consumers’ access to typical, high
quality/ nutrition value and safe local products
Local Food Systems - LFS
• Alternative food institutions (farmers’ conventional and
organic markets, farm-to-school programs, local label
schemes, and Community Supported Agriculture (CSA),
• “buy local” campaigns, etc.) are central strategies in LFS
• LFS can also build on the rapidly growing international “Slow
Food Movement” which is considered as a central feature of
the eating locally philosophy
• A prevalent viewpoint within local food movements is that a
sustainable and equitable agri-food economy can and should
be based upon a family farm structure
Community Supported Agriculture (CSA)
"food with the farmer's face on it"
• It is a recent institution in agriculture for sustainable and cooperative
farming
• It is considered as an answer to consumer’s ecological concerns while
shortening the “distance” between the consumer and the farmer/farm as
well.
• In a CSA organization, the farmer and a group of committed consumers
also share both the bounty and the risks of farm production
• A typical (still simplified) CSA approach example:
– During the winter marketing phase, a CSA operator (a collective organ)
develops a budget, divides these costs into shares, and offers shares
to consumers
– Consumers purchase shares (providing financial support for the farm)
and receive fresh produce and other products weekly from the farm
– The farmer can then focus on production during the growing season
without the added effort and stress required for marketing
AgriTourism:
“small farms, agricultural events,
& regional promotion activities.”
• Farmers throughout Europe are increasingly offering tourism services
• There are several types of agritourism operations connecting small
agricultural holdings & businesses, agricultural events & regional promotion
activities
• Local authorities should promote agritourism activities with direct-marketing
methods, Community Supported Agriculture, as well as farm sales of
specialty and/or typical products
• Local community through agritourism initiatives should work to expand
existing businesses, create new “product-based” festivals and farmer
markets, and tie this all together on a regional plan to attract visitors
• In rural and semi-urban areas, there is a need for an integrated plan to
connect Local production with Gastronomy in order to improve/differentiate
local potential to attract alternative (and mainstream) tourists
Institutional Purchasing
• Define economic spaces that potentially improve the
efficiency of direct marketing (even within existing
market structures)
• The institutional food market includes elementary
schools, universities, hospitals etc.
• Institutional purchasing involves linking local farmers
with these institutions that purchase large volumes of
food
• This market is growing rapidly, and was a $36.5 billion
industry in 2011 in the USA (USDA-Economic
Research Service Briefing Room 2010).
Benefits of Local Food
Systems/Markets
• Increase resilience and welfare of small
producers
• Increase added value in local production
systems
• Create sustainable employment in agriculture
and agri-food chain, transportation, etc.
• Increase the variety of fresh products and enrich
food culture
Benefits of Local Food Systems/Markets
• Educate consumers on seasonality/availability of
production and contribute to environmental protection
• Strengthen local links
• Increase and preserve biodiversity
• Increase the environmental potential of agricultural
systems and improve the environmental footprint of
all linkages
Conclusions
• Farming is a key factor in the territorial development of
regions, landscapes and valuable environmental areas
• Farmers (even if small) have a real opportunity to turn
consumer concerns to their advantage, by clearly
distinguishing their products in the marketplace, and gaining
premiums in return
• innovative marketing strategies should focus on:
– strengthening the identity of the product & differentiating
products from the mass products on the market
– increasing the bargaining power of producers
– capture and distribute added value mainly in the local
community
Conclusions
• Food may be more than agriculture but it is critically based on
farmers’ ability to actively shape the industry’s reaction
• The future of food requires thinking about the way of living and
the way of preserving culture, diversity, health and quality of
life across the planet
• Disruption of terroir (a particular geographical area that
includes unique ecological and societal resources and
attributes), of culinary tradition and cultural competitive
advantages are fast growing phenomena in the last couple
decades
• There is a need of active, innovative farmers ready to invest in
building the new rural set up, strengthen the social fabric and
fuel capabilities to mobilize endogenous resources &
development
In sum
The current socio-economic environment
calls for the development of intra-sectoral
and inter-sectoral synergies on behalf of
small scale and/or collectively organised
Greek farmers
The capacity of a local productive system to
create and develop high added value
products and services, on an
environmentally friendly manner, is
considered as the critical issue of its