Download Research on Marketing Skills in Agriculture Processing Companies

Research on Marketing Skills in Agriculture Processing Companies
DONG HongPeng ,LV Jie
School of Economics and Trade Shenyang Agricultural University , P.R.China, 110161
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Abstract
The agricultural product processing is an eternal industry, is one of the focus of
competition in the international market. To develop farming industrial as soon as possible and make it
competitive subject in international and domestic markets, that is the problem that must be resolved in
the transition from agricultural economy to industrial economy. In this paper, the author analyzes the
issue of agricultural marketing by "Marketing theories" and puts forward the corresponding ideas.
Key words
Management innovation, marketing, target market, agricultural processing enterprises.
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1 Introduction
The agricultural product processing industry is largest industries in the world. It is an eternal
industry involving human clothing, food. It is also the focus of the international trade competition. The
agricultural product processing industry is the largest export product of the United States, France, the
Netherlands, Germany, Belgium, Luxembourg, Britain, Italy and other countries. In 2000, the industrial
output value of China was to 8.567366 trillion yuan (6.98 price). The total output value of agriculture
was 2.49158 trillion yuan (6.98 price). The agricultural product processing industry output was
2.120123 trillion yuan (6.98 price). The agricultural product processing industry accounted for 85.09%
of the country's agricultural output value, 24.76% of the country's total industrial output value. Through
the figures, the agricultural products processing industry is a force in the national economy. From 1978
to 2001, Chinese agricultural output value increased from 140 billion yuan to 262 million yuan.
However, the proportion of agricultural output value in gross domestic product declined from 30% to
16%. The rural population increased from 803 million in 1978 to the present 933 million accounting for
70% of the population of China. The Party’s Central Committee, State Council, the NPC have attached
great importance to these figures. They take the "three rural" issue as the most important work of the
entire party and nation. Comrade Jiang Zemin pointed out: without the well-off life of farmers, the
well-off life of the country is impossible. Without agricultural modernization, it is impossible to have a
modern national economy as a whole. "Compared with the agricultural product processing industry of
developed countries, the developed countries have high level in depth, intensification and mechanization
of processing. About 70% Chinese processing of large amount of grain and oil are made in local rural or
by small rural enterprises. The ratio of agricultural product processing industry and agricultural output
value in developed countries is about 2-3.7 : 1. But in China, the agricultural products processing is far
apart that of developed countries — 1.3 : 1. From the above we can see that the agricultural product
processing industry involving 800 million farmers, directly impact the objective of building a well-off
society, impact the development of agriculture, rural stability and increasing the income of peasants.
That relates to reform, development and stability. Meanwhile, we should note that because of the
relatively backward of our agricultural product processing industry, there is also a broad space for
development. In terms of both theory and practice, along with the changes in scientific research,
technological advancement, investment conditions and the structure of social structure, modern
agriculture, modern agricultural processing industry, can also become a growing sector, can be the
source for increasing employment and promoting economy. We must draw on the experience and the
mode of operation of developed countries, by innovative thinking and scientific methods, give play to
our advantages to catch up. We should use the concept of industrialization and the operation of
commercialization, relying on market forces to push the development of the agricultural product
processing industry. At present, The most pressing need is the low degree of organization of peasants.
Facing the market development and commodity production, the scattered farmers get few information
and lack capability to operate market with low capability of market exchange and high exchanging price.
They become the passive recipients of the market price and the biggest victims of market changes., The
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"Marketing" theory and practice originating from the West are the common human civilization.They
will bring important insight for our agricultural products processing industry to mesh with the market.
2 Marketing Theory
Marketing is translated from English. This concept was born in the United States in the 1930s. This
English word has a a wide concept. So there are a lot of desctiption s of marketing. But it is quite similar
that marketing is the comprehensive business management activities viewing on market. In 1985,
American Marketing Association re-define Marketing as: "Marketing is the process that individuals and
organizations plan and execute the thinking (idea or strategy), the idea of goods and services, pricing,
sales promotion and distribution for exchange to achieve goals of personal and organizational. " In the
exploration of the marketing theory and doctrine, three masters innovate the marketing theory. The first
one is John R. Howorrd. He put forward to the " Marketing Management "concept in "Marketing
Management : analysis and decision-making " published in 1957. He pointed out the essence of
enterprise marketing management is that the enterprises"adjust to dynamic environment innovatively."
The second one is Eugene.J Mecarthy. In 1960, in his book "Basic Marketing," he put forward to a more
complete marketing management system. He was the first person that regard the consumers as a specific
group, called target market. In the market operation, Enterprises consider the external environment,
while formulating the marketing strategy. Through the executing the strategy, adjusting to environment,
meeting the needs of the target market, the enterprises can achieve the objectives. Its theoretical system
is in figure 1 :
Promotion
product
location
price
Economic
environment
Enterprise
resources and goal
Political law
environment
Social
culture
environment
Organizations
agencies
Figure 1. Marketing System portfolio plans
The center of the figure is a consumer group, the target market. The middle circle is four
controllable factors, 4P portfolio : (1) Product. It refers to the goods or services supplied by enterprises
for their target markets. These include product quality, style, specification, packing, service and so on.
(2) Price, referring to the price when customers buy products, including discounts, payment deadlines.
(3) P1ace, that is a variety of activities that products enter the target market, including the channel, area,
place, transportation. (4) Promotion, referring to the various activities that the enterprises publicize their
products and convince customers to buy their products, including advertising, publicity and public
relations work, people promotion. The third one is Philip Kotler, in 1984 his "Common Marketing"
theory, he pointed out that: under the circumstances of overproduction, fierce competition, trade
protectionism in all the countries, the marketing strategy,
besides the "4P" portfolio, must add two
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"P" -- " Political Power" and "Public Relations". In strategy, combine approach of economic,
psychological and political and public relations skills to gain the cooperation of a number of participants.
"Common Marketing" added two new factors on the basis of "4P", named "6P" to open and enter the
market. Today, with the development in technology, more convenient transport and more efficient
communications, the marketing organization, means, methods have changed a lot. But the doctrine and
theory of three master guide and influent today’s marketing practice. Marketing theory and practice play
very important roles to guide China's agricultural product processing industry to occupy market and
step to success.
3 Marketing research on agricultural product processing industry
Marketing Theory and Practice form and develop gradually with the processes that change from
agricultural economy to industrial economy, from seller's market to buyer's market, from domestic trade
to international trade, from immature market economy to more mature market economy. It plays a
strong guiding role in agricultural processing industry and its marketing of China, which is on the initial
stage of socialism and regards the socialist market economy as a target in the process of the
establishment and improvement.
3.1 Marketing must take consumers as centre
Market economy is the senior commodity economy. Marketing process is the process of value
conversion between market players (producers and consumers). Producers actualize their own worth in
the process of conversion. The consumers meet their own need in the process of conversion. If the
agricultural products processing enterprises want to establish the thinking to regard consumers as
center,they must solve the following issues : A. Must clearly understand the consumer groups --target
market of their products. Different products have different consumer groups. The consumer groups of
lobster, abalone are different with that of normal vagetables in the packing, storage and transportation,
pricing and sales promotion and distribution of product. Consider the target market with international
and long-term view to and also a practical point of view, search target market for the current interests
with practical view. B. Must consider both the short-term and long-term interests of consumers. Now
food safety and health standards, green standards, pesticide residues and other issues have attracted the
attention of the entire society. Agricultural products processing enterprises should prescribe producing
procedures and standards for raw material base. The production, storage and sales should conform to the
safety, health, green requirements. With the economic development and the improvement consumption
level, the safet, healthy and green product are more and more popular and more competitive. C. Fully
take the special needs of consumers into account. Due to the diversified consumer demand levels,
meeting the ordinary consumer while considering the consumers having special needs. These consumers
are leading fashion. Perhaps today's special requirements will become a big market tomorrow.
3.2 Marketing is a management process
Marketing is an organization management process "from the market and back to market ". For the
enterprises of agricultural products processing, "from the market" is to collect and analyze deeply the
information of domestic commodities demand; to recognize clearly their comparative and competitive
advantages; through market forecast, to establish the target market and raw materials base and organize
commodity production. "back to market" is to establish strong channel network of sales and marketing
distribution. In the marketing organization and management process of agricultural products processing
industry, the greatest feature is to organize the decentralized agricultural production. The practice
abroad is successful in this regard. Inner Mongolia Yili Milk Product Group has 60,000 dairy cows.
The company created a the milk source base model with "scattered feeding, concentrated milking, good
quality and prices, comprehensive services ", established 255 standard milking stations and six cows
feeding zones to supply for farmers with whole technical services and enterprise management in the
cows, feed, anti-epidemic, milking and milk admission. There are also many successful enterprise in the
distribution network. The food sales of Suguo supermarket in 2001 reached 3.0 billion. The goods are
more than 40 categories, 10,000 kinds including grain, oil, fruits, vegetables, meat, poultry, eggs and so
on. It led to the development of more than 900 food processing enterprises. The effective operation of
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Suguo solves the difficulty in selling and buying for the peasants and organizes the Chinese "scattered
and small, chaotic," agricultural product processing enterprises and famous and special food through
"purchasing together, centralized distribution, chain sales " to play a significant role in the modern
business.
3.3 Marketing is a system for spreading information
Market is the starting line of agricultural products processing. To produce what depends on the
interest, hobbie and special requirements of consumers. To produce how many depends on the supply
and demand and price factors in the market, depends on the actual and potential purchasing power of
consumers, depends on assessment of the target and potential market by producers. Therefore, the
establishment of market information system and effective monitoring system will determine the success
or failure of enterprises. Conversely, agricultural product processing enterprises produced products. In
order to let the consumer know value of the product,service, additional benefits, product characteristics,
the enterprises should also establish a strong informatio spreading system to tell distributors,
wholesalers, retailers and consumers to gain fast and a large number of sales. So market is also the place
where farmers and enterprises can actualize their value and is the destination for production of farmers
and enterprises. Number of facts prove that numerous farmers and farm produce processing enterprises
is at a loss and is failure. Besides small-scale and scattered operations, one of the most important factors
is gaining few market information. Market is not only the place where the producers and consumers
exchange, but also the tie for information exchange between producers and consumers. For Chinese
agricultural product processing enterprises, they should build a information-communicating platform for
producers and consumers making use of the modern communications radio, television, magazines,
newspapers and internet. Through technical inputs, it is an important tasks ahead to establish their own
computer network of purchasing technology, logistics and distribution of and information technology.
Only establish an effective information communication, can the operators become successful.
3.4 Marketing is a system engineering
After China entering the WTO, agricultural products processing enterprises not only optimize and
allocate internal resources, but also participate in the allocation of national and international
resources.Eenterprises are constrained by the "invisible hand" and controlled by the "visible hand". As
the internal subsystems of enterprises, besides effective allocation of human, financial material
resources and the production process conforming to international quality certification system, they
should pay attention to patent applications, establishing technical standards and green standards for their
products, gaining international recognition and innovating organization, instutution and technology in
the internal of enterprises, developing products with their own intellectual property rights, establishing a
strong marketing network and sales channel portfolio network, producing in large-scale to meet the
needs of consumers while establishing their own brand names. In accordance with the requirements of
the 16th Party Congress : "Adhering to use informatization to lead industrialization, to use
industrialization to promote informatization,step onto a new-type industrialization way with high
scientific and technological content, good economic returns, low resource consumption, less
environmental pollution and making full use of human resources. "At the same time, farm products
processing enterprises is a big open systems. On one hand, they should face the market opportunity and
threat caused by population, economic, natural, technological, political and legal environment. On the
other hand, they are influented by international politics, economy, culture, technology, nature that may
bring a bigger market or competitive threat. They are also constrained by the rules of international trade,
international technical barriers and green barriers competing with all international trade and competition.
In such a complex system, in the development and marketing of agricultural products, operators and all
staff should have the following consciousnesses : the consciousnesses of talent, patent, product
standards, brand, innovation and rules. Integrate the internal and external resources and elements of
enterprise effectively to vary with situations to grow and develop.
3.5 Marketing is the driving force of agricultural science and technology
Pushed by market demand, the new products caused by scientific research and technological
progress is a revolutionary force, is a cruel process of enabling the efficient and eliminating the
inefficient. New science, new technology and production methods are promoting modern agriculture
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from single primary agricultural products proceeding toward the field of agricultural product processing
on the basis of biological production, pharmaceutical, chemical, energy, environmental protection,
tourism and recreation. The traditional boundaries of the primary, secondary and tertiary industries will
become vague. Agricultural products processing enterprises should pay more attention to the advances
and changes in science, technology and organization, to technology innovation in the agricultural base,
processing equipment and technical means of marketing to form own patent, technical standards, means
of inspection gradually to form their own intellectual property rights and the products with core
competitiveness.
4 conclusion
Marketing theory is a summary of value conversion laws between marketing subjects, is the
common spiritual wealth of Human society. In the marketing of agricultural products, we must learn
from the theory and practice of marketing, while exploring the theory and practice of agricultural
products marketing to win in market competition.
References
[1] Liu Xi song ,Shang Yan. Investigation and analysis on the developing situation of of agricultural
processing enterprises after WTO Entry. Agricatural Economy, 2001(1):p17 19(in chinese)
[2] Pan zu he. Marketing research on farm produce processing enterprises et al. exploring economic
issues. 2003, (10) :p28 30(in chinese)
[3] An xin zhe. On the marketing of agricultural products. Agricatural Economy, 2003,(2) :p40 45(in
chinese)
[4] Chen hui ying, Zhou Yan-ping. Liu Xiaomei. Organization innovation and policy options in China's
agricultural product processing industry. economic geography 2004,(2) :p21 25(in chinese)
[5] He Jin Xiong Xueping. Marketing Strategies for protecting agricultural products in China in the new
century. commercial research.2003,(4) :p3 6(in chinese)
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