MKTG 1502/7961 Agriculture & Food Industry Marketing

Dr Simon Somogyi

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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1. Lecture

Course Activities

- 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 35pm.

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.

Course Activities/ My Details

My Details Dr Simon Somogyi
Building 8117a, Room 231, email: s.somogyi@uq.edu.au

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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Linkages with other agribusiness courses

Applied Market Research Agribusiness Marketing Agribusiness Sales Supply Chain Management Strategic Management Export Practices 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 Porters Value Chain, Industry Attractiveness model, SWOT analysis, Marketing Mix

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

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 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

REGULATORS FINANCIERS SHAREHOLDERS CUSTOMERS SUPPLIERS

PRODUCTION

THE BOARD

SALES

SENIOR

MANAGEMENT
FINANCE MARKETING

ADMINISTRATION

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Porters Value Chain

Support Activities Firm infrastructure

Human resource management Research and development Procurement

Operations Outbound logistics Marketing and sales Inbound logistics Service
How much customer value can my business create?

Primary Activities

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A firms intangible resources

Dunne 2006 13

Some pathways to alternative beef market segments

Feedlot Butcher Shop

Beef producer

Abattoir

Supermarkets

Restaurants Sale yards

Wholesalers
Food Service

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Some pathways to alternative grain market segments

Export

Grain producer

Grain merchant

Flour Mill

Food Processor

Feed Mill

Bio-fuels
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Consumer based high value added product: Wine

Intermediaries Negociant Retailers Supermarket

Wine industry Grape Grower Winery

Wholesaler

Wine shop

Merchant/ Distributor

Hospitality

Importer

Liquor store

Consumer
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Porters Five Forces Model

Bargaining Power of Buyers

How attractive is the industry in which my business operates?

Threat of New Entrants

Rivalry among Existing Competitors

Threat of Substitutes

Bargaining Power of Suppliers

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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Competitive Analysis
Strengths v Weaknesses

Where should my business focus?

Opportunities v Threats
Competitive

A SWOT Analysis Internal Environment People Management Resource Management

S t r a t e g y

Environment

Suppliers
Buyers Competitors Substitutes

Target Markets
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Marketing Mix

What do we need to address consumer wants?

Marketing Mix: Ingredients that are modified to make product attractive to consumer. Often referred as 4 Ps

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 communication 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
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BREEDING

T R A N S P O R T

TASK
BACKGROUNDING

FEEDLOT

ABATTOIR

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

T R A N S P O R T

PORTION CONTROLLER

RESTAURANT

Customers

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GROWER

T R A N S P O R T
WHOLESALER

PACKING/ COLD STORE

TASK: Cabbage value chain

T R A N S P O R T

SUPERMARKET

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

Consumer
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Summary
A firm will produce the goods and/or services that are compatible with its capabilities and 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: example
What marketing terms do we need to define?
Marketing is a process that co-ordinates a firms competitive activities in a specific market segment. Marketing Mix is the features of a firms 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.
Porters 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. Porters 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: example
Definitions continued
A Supply Chain is a sequence of firms that are collectively responsible for the servicing of a customers 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: example

What 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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Recap

Customers matter 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)

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