1 Dr Simon Somogyi

MKTG 1502/7961 Agriculture & Food Industry Marketing

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Course Objectives

At end of this course you will:

1. Understanding of the marketing concept and how it applies to agricultural products

2. Understand the major forces of change that impact on the marketing of agricultural products

3. Understand the components of a business-to-business marketing strategy which accommodates the changes in the competitive environment facing an agribusiness firm

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Course Activities1. Lecture -Tuesdays in the Animal Science Building (Building

Number 8153), Room 153 from 9am- 11am. -The lecture material will be available on the Blackboard site prior to the lecture.

-Echo 360 will be used in this course and recording will appear on the Blackboard site

2. Tutorial sessions -For all students who wish to attend on Wednesdays from 3-5pm.

-The session will be held in the Management Building (8117) in room 218 (second level meeting room).

-Students to bring questions and have them answered/ discussed in a group setting. This session is not compulsory.

-I urge you to attend and get involved.

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Course Activities/ My Details

My Details

Dr Simon SomogyiBuilding 8117a, Room 231, email: s.somogyi@uq.edu.au

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Assessment

1. Within semester quiz (20%)example quiz on the Blackboard site

Tuesday 23rd April during the lecture. Externals do online in Blackboard.

2. Semester group project (20%)Details: Blackboard site; Approval firm/group; 20th March

Final Report 20th May

3. Final Examination 60%Details: past exam paper on the Blackboard site

Examination period June 2013

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Agribusiness Marketing

Applied Market Research

Agribusiness Sales

Supply Chain Management

Export Practices

Strategic Management

Linkages with other agribusiness courses

Food and Fibre Case Studies

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Module 1 : the role of marketing as part of a business strategy

• The organizational structure of a business, functional roles, tangible and intangible resources

• Porter’s Value Chain, Industry Attractiveness model, SWOT analysis, Marketing Mix

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Learning Objective

At end of this module you will:

1. Understand the role of marketing in a business

2. Understand the differences between business to business marketing and business to consumer marketing

3. Appreciate that marketing is more than advertising or selling

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Why does a firm exist?

To provide goods and/or services to customers

and while doing so make a profit

This raises the big questions:

1. What customers?

2. What goods and/or services

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The answers to these questions depends on:

1. What goals, capabilities and resources the business has,

2. What markets exist for the possible goods and services goods and services the business might produce, and

3. The competition the business has in these potential markets

No business has the RIGHT to EXIST nor make a PROFIT

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The Functional Organization of a Firm

PRODUCTION

FINANCE

SALES

MARKETING

ADMINISTRATION

SENIOR

MANAGEMENT

THE BOARD

REGULATORS FINANCIERS SHAREHOLDERS CUSTOMERS SUPPLIERS

PRODUCTION

FINANCE

SALES

MARKETING

ADMINISTRATION

SENIOR

MANAGEMENT

THE BOARD

REGULATORS FINANCIERS SHAREHOLDERS CUSTOMERS SUPPLIERS

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Primary Activities

Sup

port

A

ctiv

itie

s Firm infrastructure

Human resource managementResearch and developmentProcurement

Inb

ou

nd

lo

gis

tic

s Serv

ice

Op

era

tio

ns M

ark

eti

ng

an

d

sale

s

Ou

tbou

nd

log

isti

cs

Mar

gin

Margin

Porter’s Value Chain

How much customer value can my business create?

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A firm’s intangible resources

Dunne 2006

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Beef producer

Abattoir

Wholesalers

Supermarkets

Restaurants

Food

Service

Butcher

Shop

Sale yards

Feedlot

Some pathways to alternative beef market segments

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Export

Some pathways to alternative grain market segments

Grain producer

Grain merchant Flour Mill

Feed Mill

Bio-fuels

Food Processor

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Consumer based “high value added” product: Wine

‘Wine industry’

Grape Grower

Winery

Super-market

Liquor store

Wineshop

Hospitality

Retailers

Consumer

Merchant/Distributor

Wholesaler

Negociant

Importer

Intermediaries

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Porter’s Five Forces Model

Threat of New Entrants

Threat of Substitutes

Rivalry among Existing

Competitors

Bargaining Power of Suppliers

Bargaining Power of Buyers

How attractive is the industry in which my business operates?

What does the competitive environment look like?

The concept can be used to evaluate the attractiveness of a market segment to a business

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A SWOT AnalysisInternal

Environment

People Management

Resource Management

Target Markets

Strategy

Competitive

Environment

Suppliers

Buyers

Competitors

Substitutes

Strengths v Weaknesses

Opportunities v Threats

Competitive Analysis Where should my business focus?

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Marketing Mix• Marketing MixMarketing Mix: Ingredients that are modified to

make product attractive to consumerattractive to consumer. Often referred as 4 P’s

1.Product – tangible or intangible? Specifications of the product.

2.Price –The amount a customer pays for the product. Elasticities of demand etc

3.Promotion - Methods of communicationcommunication that a marketer may use to provide information to different parties about the product

4.Place- Where convenient for consumers. Distribution of the product

We will discuss in detail in later topics

What do we need to address consumer consumer wants?wants?

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ABATTOIR

PORTION CONTROLLER

TRANSPORT

RESTAURANT

TRANSPORT

BREEDING

BACKGROUNDING

FEEDLOT

Customers

Apply Porter’s Industry Attractiveness Model to firms competing at the production, processing and retail stages of this supply chain

TASK

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TRANSPORT

SUPERMARKET

TRANSPORT

GROWER

PACKING/ COLD STORE

WHOLESALER

Consumer

Compare and contrast the requirements a customer at a supermarket expects with that a wholesaler requires of a cabbage grower

TASK: Cabbage value chain

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Summary

A firm will produce the goods and/or services that are compatible with its capabilities capabilities and resourcesand resources, and

it will endeavour to sell these goods and/or services to the customer(s) that provide it with an acceptable return on its investment of time, resources and effort

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The following slides are examples of what YOU should do to consolidate your understanding of what has been presented in the contact session.

This process will assist you in identifying points that need clarification either in the next contact session or via the Blackboard site

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Recap: example

What facts have we learnt about the role of marketing in a firm?

What marketing terms do we need to define?

What issues have been raised that we need to know more about?

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Recap: example

What facts have we learnt about the role of marketing in a firm?

•Marketing coordinates all the activities of a firm

•The marketing mix defines how a firm will compete in a market segment

•The marketing mix will change as the characteristics of the target market segment change

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Recap: exampleWhat marketing terms do we need to define?

Marketing is a process that co-ordinates a firm’s competitive activities in a specific market segment.

Marketing Mix is the features of a firm’s product (or service) when combined with its distribution channel, its promotional activities and its price structure define the customer value proposition the firm offers in a specific market segment.

A Market Segment is defined group of customers identified by a firm as being sufficiently attractive as to warrant the firm specifically attempting to satisfy their needs for a specific type of product and/or service.

Porter’s Value Chain is a model that identifies the major functional and support activities of a business that enable a firm to create value for its customers.

Porter’s Industry Attractiveness model is a tool employed to establish the attractiveness of an industry to a current or potential participating firm.

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Recap: exampleDefinitions continued

A Supply Chain is a sequence of firms that are collectively responsible for the servicing of a customer’s needs in a specific market segment.

Supply Chain Management is the process of coordinating the activities of firms within a supply chain so as to enhance the competitive position of the chain in the specific market segment(s) in which it chooses to compete.

A SWOT analysis is a process undertaken by a business as part of its evaluation of its present competitive strategy.

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Recap: exampleWhat issues have been raised that we need to know more about?

•How a firm determines which market segments to compete in

•How a firm develops a marketing strategy for a specific market segment

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“Understanding what consumers want and

focusing totally on meeting those needs is the essence

of survival and prosperity in contemporary agricultural

markets”

(Australian Farm Institute Report, August 2006)

RecapCustomers matter