Aquaculture MarketingAquaculture Marketing

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Aquaculture—old in practice, new ag industries

Rapid expansion globally Development plagued by

marketing problems Main problem: matching

production to market needs

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Good example: catfish farming Farmers were well into production

before producers and administrators gave serious consideration to market research and data collection

demand was great, so no difficulty selling

market analysis only really began in the 1970’s

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This dilemma was also shown by salmon and shrimp industries

failure to understand the market has driven many producers out of business

knowledge is necessary for locating markets for new and established products, for price determinations and for setting quality standards

what has helped is the integration of the quality concept with marketing: HACCP

Identifying Markets

Just what is a market? Can be defined in many different ways:

a location: Pike’s Place Mkt., Seattle a product: jumbo shrimp a time: September - October catfish

market, European Christmas market a level: retail vs. wholesale

Part 1: The Marketing Plan (According to Philip Kotler)

After setting the firm’s purpose and goal, the marketing plan is the starting point for the rest of planning

most marketing plans involve single products or lines of products

Part 1: The Marketing Plan

Current situation Opportunity and issue study Goals Marketing strategies Working plans Financial studies Needed controls

Current Market Situation

1) market situation: background and current situation wrt consumer needs, likes/dislikes, buying trends; current size and past growth of the total market, sales in various geographical areas

2) product situation: recent history of sales, revenues for a current product

3) competitive situation: size, goals, market share, product quality, marketing strategies present and future of competitors

Current Market Situation

Distribution situation: sales made through each type of middleman (brokers, wholesalers, retailer) in the distribution channel (later)

Macroeconomic environment: general economic situation has a bearing on sales (e.g., population figures, economic climate, technology, legal issues, social issues, etc.)

Opportunity Analysis (SWOT)

1) strength and weakness study: main ones of the company and product from factors within the firm (?)

2) opportunities and threats analysis: main ones facing the product from factors outside the firm, ranked in order of importance (?)

3) goals: financial and marketing (yearly ROI of 25% vs. 50% increase in sales)

Opportunity Analysis

4) marketing strategy: basic approach to achieve goals

• target markets: what does the consumer need?

• product positioning: best quality or lowest price?

• size of product line: number/types of products sold

• price: compared to other similar ones• distribution: how, where and by whom?• sales force: size, type, quality

Opportunity Analysis (cont)

4) marketing strategy (cont.)• level and quality of service• advertising: amount needed, worked?• sales promotion: ditto…• r&d: amount, types, timing, success?• market research: amount/types

Opportunity Analysis (cont)

5) working plan: once plan is approved, working plan activates marketing plan (who does what, etc.)

6) financial study: forecast of future sales revenue, cost of additional product and personnel

7) controls: feedback mechanisms to measure progress, often quarterly or monthly reports

Part 2: Marketing Channels

Refers to the institutional structure in place for movement and exchange of goods

from producer consumer helps with record keeping to consider

movement a “channel” really regards a flow of information demand creates flow if conditions of sale are agreed upon, flow

through or “down” the channel starts

How can you avoid all this complexity?

Avoiding Market Channel Complexity: direct sales!

small quantity of product transaction does not

necessitate intermediary farmer develops own capacity

to handle shrimp

Levels of Market Channel Complexity

farmer ---> consumer farmer ---> retailer ---> consumer farmer ---> wholesaler ---> retailer --->

consumer

farmer ---> broker ---> processor ---> wholesaler ---> retailers ---> consumer

retailers: hotels, restaurants, institutions

Market Channel and Price As product moves through the channel, the

price at each stage is increased in accordance with value added to the product

farmers not often pleased with discrepancy in price between what they received and what consumers pay

difference is the marketing margin or marketing bill (70-80 cents on the dollar)

margin is largely affected by time of sale and price paid for raw product

other factors: governmental price controls, producer organizations, co-ops, type of product, market concentration

Length of Channels

Channels can be simple or long and complex

length/complexity depend upon the volume of product moved, number of functions performed, scale of operation at each stage and the distribution system chosen

organization depends upon the type of markets, organization of producers

Increasing Market Share

Commercially-reared product is often in direct competition with wild-sourced

also in competition with imports factors that affect sales must be

isolated for farmers to compete market share is typically increased by

monitoring: product, price, promotion and place

Product The key to expanding sales is a

premium product needs a QA/QC department or program manager must assure that size, taste,

packaging and other characteristics are pleasing to customer prior to putting on the market

off-flavor, color, texture and general appearance are key elements

Price To minimize price, the manager will

keep processing costs at a minimum this insures that product price is

competitive in a purely competitive market, price is

determined by interaction between demand and supply (REM?)

price often identified in real world by discovery (REM?)

an error in pricing often has serious consequences

Promotion

Involves programs to encourage sale and increase market share at any point in the channel by influencing potential purchases

promotion communicates information including product quality, price, and benefits of the product to potential clients

it acts on both the intellectual and emotional state of the buyer

various examples?

Place Distribution of the product to locations

used by customers wishing to purchase the product is a market function

sometimes product is transported hundreds of miles from the farm

frozen products are transported the greatest distances

market share is increased by transporting product to places where it has previously been unavailable

Homework Think about the marketing aspects of

your hypothetical operation Where are your markets? Be specific! What are you going to sell? Why? How are you going to promote your

product? Outline your marketing channel (simple

diagram) Due in class next week (Tuesday)