Agri Marketing

Management

Dept of AgriBusiness Management 2015-2017

Sri Sri University

Topics to be covered
19-08-2016
* Introduction: Marketing concepts and Agri marketing
* Agri Marketing structure and process
* Agriculture linking management and channels
* Macroeconomics in agri marketing
* Agri segments

Marketing concepts
* What is Marketing : Analysis Planning Organizing Controlling
Maintaining mutual benefit.

* Key elements: Customer orientation Integrated efforts

Profitability Viability

* Marketing Mix: Product Price Place (Distribution) Promotions

Holistic Marketing for 21st Century

Holistic marketing recognizes that there are many variables and
activities related to these variable that matter in marketing and
therefore a broad integrative perspective is often necessary.
Kotler and Keller highlighted four components of holistic marketing.

* Relationship

marketing - relationships with people and

organizations that directly or indirectly affect the success of firm's
marketing activities. Four key constituents for relationship
marketing are customers, employees, channel partners and
members of the financial community.

* Integrated

marketing - Entire marketing function or mix is to be

treated as a system and each activity has an effect on other
activities. Synergy can be created among the activities and the
overall effect can be magnified when integrated marketing or
systems thinking based marketing is practiced.

Holistic Marketing for 21st Century

* Internal

marketing - It is marketing of the idea inside the

organization that customer has to come first. Marketing orientation
has to be value in the company. Every employee must try to
understand the customer need and competitor action. They need
to know the company's strategy and tactics in serving customers.

* Social

responsibility marketing Optimizing financial and

nonfinancial returns to business and society from marketing
activities and programs.

Agri Marketing
Who are involved in agricultural marketing

1.
2.
3.
4.
5.
6.
7.

Farmers / Producers
Agri Input Companies
NGO Service Institutions
Procession Industry
Government
Private Players Traders, sellers
Customers

Why Agricultural Marketing / Scope

Production methods > Perishable Products > Fluctuating prices >
Distribution

Agri Marketing
Functions involved in agricultural and food marketing processes as
under three sets of functions of a marketing system
A. Exchange Functions
1. Buying
2. Selling
B. Physical Functions
3. Storage
4. Transportation
5. Processing
C. Facilitating Functions
6. Standardization
7. Financing
8. Risk Bearing
9. Market Intelligence

Agriculture and Food Industry

Quality
Cost
Reliability
Processing
Product differentiation
Health aspects

Agriculture and Food Industry Enterprises

Private

enterprise Low operating cost, Decision making,

Adaptability of new technology, High equipment utilization.

Marketing

board (Govt) Change agent, Regulatory role,

Facilitator

Cooperatives

Agri Marketing Structure

Types of Market Structure

1.

Perfect competition - Many firms, freedom of

homogeneous product, normal profit. Really doesn't exist

2.

Pure monopoly - One firm dominates the market, barriers to

entry, possibly supernormal profit. The cable company is an
example of this in India (sort of like it is in America.)
Johnsons&johnsons

3.

Monopolistic competition lots of sellers selling similar products

that don't differ a whole lot in terms of characteristics or price.

4.

Oligopoly - An industry dominated by a few firms, e.g. 5 firm

concentration ratio of > 50%. Interdependence of firms. Airtel,
Idea, BSNL, Reliance

entry,

Agri Marketing Structure

Perfect competition or Pure competition
Agri market structure characterized by a large number of firms so each of
the firm in perfect competition produces an insignificant percentage of
total market output and thus that no single firm can influence or control
over the ruling market price.

agriculture products are said standardized or homogenous

Agriculture product is a product where buyer cannot differentiate in terms
of quality, packaging or labeling. Therefore, in agriculture market
customers don't care which specific firm they buy from because it is
absolutely identical.

Agri Marketing Structure

Freedom of entry and exist from the market in perfect competition. This
type of market is feasible in the long run and no firm will dominate the
market and evict other firm.

Each firm's product supplied to the markets that are prefect substitutes
for the product of others firms, so the demand for each firm's product is
perfectly elastic.

The perfect competition have no power to set the price they have to
sell the product at the going market price. This type of firm are said to
be price takers.

Agri Marketing
Intermediaries

Farmers selling directly in the market (more common in rural

markets)

Petty traders and assemblers

Wholesalers (and semi-wholesalers)
Commission agents, sometimes acting as auctioneers, and brokers
Transporters and transport agents
Retailers
Channels

Rural primary market

Assembly market
Wholesale market
Retail market
Other marketing channels

Agri Marketing Direct Channels

Farmers markets
On-farm retail markets
Roadside stands
U-Pick/Pick-Your-Own/Cut or Choose-Your-Own operations
Community Supported Agriculture (CSA)
Read https://extension.tennessee.edu/publications/Documents/PB1796
.
pdf

Agri Marketing/Sales Channels

Community-supported agriculture
On-farm sales and tourism
Restaurant sales
Subscriptions for meat products
Extending marketing seasons
Creating value-added products

Agronomics
Agricultural economics, study of the allocation, distribution, and
utilization of the resources used, along with the commodities
produced, by farming.

Agronomic practices are steps farmers incorporate into their farm

management systems to improve soil quality, enhance water use,
manage crop residue and improve the environment through better
fertilizer management.

These steps not only improve a farmers bottom line by

decreasing input costs, but also improve the environment by
decreasing water use and over-fertilization.

Major topics in Agronomics

Agricultural environment and natural resources
Land management, preventing erosion, managing pests, protecting
biodiversity, and preventing livestock diseases.

Food and consumer economics

Price, income, quality

Production economics and farm management

Risk and decision-making under uncertainty, producing sufficient
food for a growing world population, subject to new resource and
environmental challenges

Agri Market Segments

Farming
Agriculture Equipment
Fertilizers
Pesticides
Warehousing
Cold Chains
Food Processing
Dairy Farming
Floriculture
Apiculture
Sericulture
Seeds
Fisheries
Poultry
Animal Husbandry
Animal Feed
Bio-agriculture

Agri Market Segments: Growth and Opportunities

Farming Industry in India
Fertilizer Industry in India
Pesticide Industry in India
Food Processing Industry in India
Dairy Industry in India
Flower Industry in India
Silk Industry in India
Honey and Beeswax Industry in India
Fish Industry in India
Poultry Industry in India consisting of Eggs and Broiler Meat
Warehousing Industry in India
Cold Chain Industry in India
Seed Industry in India
Agriculture Equipment Industry in India
Animal Feed Industry in India
Bioagriculture Industry in India
Animal Husbandry Industry in India

Agri Market Segments

The farming Industry in India consisting of fruits, vegetables,
cereals, plantation crops, spices and pulses representing the
largest sector in the Indian agriculture Industry.
The farming industry was followed by the food processing
industry, dairy industry and the fertilizer industry.
Floriculture, cold chain and sericulture represented the fastest
growing markets.
The unorganized sector still accounts for the majority of the
market in all major agriculture segments.

Price & Cost: Price setting & price discovery systems,

Price based on Quality & Grading, Hedging and the futures
market,
Commodity derivatives & Trading

08-09-2016
International Marketing
Foreign Market Entry
Imports & Exports
International Pricing
Institutional supports.
Case: Successful Agri Export Companies and Issues/ Scope

08-09-2016

08-09-2016

International Market Entry Model

5 Huge international marketing Blunders

Pepsodent tried to market its toothpaste in Southeast Asia

by claiming that it "whitens your teeth, before learning that some
locals chewed betel nuts to blacken their teeth, a sign of
attractiveness in their culture.

The Scandinavian vacuum manufacturer Electrolux didnt

account for a common American colloquialism when marketing
their vacuum in the U.S: "Nothing sucks like an Electrolux".

The soft drink Fresca was marketed under that name in

Mexico before the company discovered that fresca is a slang
term for lesbian in parts of Mexico.

Pepsi used the slogan Come Alive With Pepsi in Taiwan

or so they thought. The slogan was actually translated as: "Pepsi
brings your ancestors back from the dead."

The Coors slogan "Turn It Loose," was translated into Spanish

as "Suffer From Diarrhea."

International Pricing Strategy

Whats holding up Indias farm exports?

Indias export of agriculture and processed food products which
accounts for 12-14 per cent of the countrys total merchandise
exports.
it declined by 9.8 per cent to $38.6 billion in FY 2015 from $42.8
billion in FY 2014.
- Health and safety regulations? ;
A mixed bag of factors
- Tariff and non-tariff barriers
- High logistics costs
- Skewed procurement policies
The proposed US legislation requiring agriculture imports to be
mandatorily inspected and audited by USFDA will increase the cost of
compliance and hurt Indias farm exports.

Tariff and non-tariff barriers

Indias

farm exports also face prohibitive import duties in overseas

markets. For example, dairy products attract peak import duties of
511 per cent in the EU, 93 per cent in the US, and 692 per cent in
Japan.

Indias

farm exports also have to compete with highly subsidised

farm products supplied by other countries. Although India has been
accused of being overly protectionist about agricultural and food
products, it is China, Japan and the US which are the top farm
subsidisers.

India has ban rice imports by Iran and green pepper by Saudi Arabia.
Besides, Vietnam refuses to allow Indian peanuts.

China does not buy non-basmati rice from India but sources the same
from Pakistan as well as Cambodia, Myanmar, Vietnam and Thailand.

Domestic factors
Instead of global demand and supply factors, Indias farmers are guided by
minimum support and procurement prices fixed arbitrarily by government.

Indias

farm produce suffers from poor customs and port infrastructure,

and high logistics cost that cut into the exporters margins. Bangladesh and
Pakistan are now sourcing oil-meals from Latin America rather than India.

Exports

of many agriculture commodities, sugar for instance, are

regulated by arbitrary quota fixation in India. Such executive actions make
India an unreliable supplier. That in turn leads to low net realisation from
export. Then, there are quality related issues with instances of pesticides
often being found above permissible limits, leading to rejection of export
consignments.

The cultivation of genetically modified (GM) crops is quite common in the

US and Latin American countries like Brazil. Indias hesitation on whether
to allow cultivation of GM crops or not affects its ability to capture global
market share.

The way forward

India will have to take up the issues of farm subsidies, market
denials and high import duties at all bilateral (FTAs), regional (e.g.
RCEP) and multilateral (WTO) trade forums if it is serious about
pushing its farm exports.

Among internal actions needed are long term measures to tackle

the issues of low productivity, over dependency on monsoon, and
lack of post harvest infrastructure that lower the net supply of
agriculture commodities and leads to knee jerk reactions in the
form of export bans.

Imposing export bans deprives farmers of getting the best prices

for their produce. India needs to remove quantitative restrictions on
exports for improving its image as a supplier. To deal with temporary
shortage of specific agriculture commodities, export duties (that are
less trade distortive than export quotas) should be used.

How do I export agricultural products from India?

- Assurance of how I'll get money if the goods are exported
- How to find buyers in different countries. Product is Apple (fruit)
- Research of market - Access the degree of competition and study the current
export trends.

- Since you intend to export Apples (fruits); you should get the information the
same product by other manufacturers related to their pricing, terms of
business, marketing techniques etc.

- To find out prospective buyers in different countries you can:

- Advertise in Indian and foreign though export agencies, embassy, current

market players.
- Participate in International Trade Fairs and exhibitions in India and abroad.
- Consult trade representatives, become member in apeda, Get license
- To get the assurance of receiving money after export and avoidance of credit
risk or currency risk; insist upon an irrevocable LETTER OF CREDIT from
overseas buyer.

Organically produced agricultural products have good demand in

almost all foreign countries. Organic agricultural export market is
also vibrant in foreign countries. Major export market for Indian
producers include China, Australia, Canada, France, Germany,
Italy, Sweden, Singapore and Saudi Arabia.

Commodity | Forecast | 2016-2020

Major Export Markets

http://www.india-exports.com/agro.html

List of largest producing countries of

agricultural commodities
https://en.wikipedia.org/wiki/List_of_lar
gest_producing_countries_of_agricultural_
commodities

Promotional Councils
Agriculture and Processed Food Products Export Development Authority (APEDA)
It plays a significant role in expanding the export potential of Indian agricultural and food
products

Cashew Export Promotion Council of India (CEPCI)

It works towards the promotion of the export of cashew kernels and cashew nut shell liquid
(CNSL).

Coffee Board of India

It is engaged in research, development, quality upgrade, and domestic and international
promotion of Indian coffee.

Tea Board of India

The Board undertakes direct promotional activities, which include organising joint
participation in international fairs and exhibitions, arranging buyer-seller meets and sending
and hosting trade delegations.

Tobacco Board
It is a facilitator for tobacco growers, traders and exporters.

Digital Marketing Frootis Campaign

In

1985 Parlo Agro India Pvt Ltd launched its very famous flagship product Frooti. Now

celebrating almost three decades of success.

Frooti was launched in a green rectangular Tetra Pack as a ready-to-serve mango drink.

The

packaging played a major role behind its success, since it could be carried easily and
conveniently.

The brand faces competition from rivals like Tropicana, Slice and Maaza.
The Frooti Life Campaign

(2015 Parle Agro launched its marketing campaign to revamp the brand)

To enhance the brand image of Frooti, Parlo agro came up with this unique campaign with ad
agency Sagmietser & walsh.
Idea behind the Campaign:

1.

Popularise the brand across all age groups and broaden the target audience.

2. With emerging digital market, establish the brands strong digital

the other conventional way of advertisement.
3. Reposition Frooti in the market as a leading brand.

presence apart from all

Campaign Digital Marketing

Social

media platform Youtube, Twitter, Facebook, Instagram

(promotional or sponsored pages)
Idea of establishing the brand boldly by using hashtag
#TheFrootiLife

Youtube: The campaign is still live and more and more videos are
made live on Youtube to keep the customer interested in the
brand.

Twitter:

#TheFrootiLife campaign with Sharukh Khan endorsing

the drink in various ways.
Various themes like Nodietday or mothers day, starwars,
conversations are chosen to make the twitter page more active
among the twitter users.
Parle Agro sponsored the Indian Box premier league(IBCL)

Results of the Campaign

New updates is being implemented got customers involved with

the brand.

Impacting the consciousness of the brand in consumers mind and

leveraged Frootis brand equity.

According to Business Insider India, Parle Agros Frooti has recently

once again become Indias second most popular mango drink, by
outselling Pepsicos Slice. The brand now enjoys a market share of
25.6% in Indias 2300 cr mango drink category.

It was evident that the usage of digital marketing strategy on

social media played well for the company.

Frooti regained its market presence and thereby giving Frooti

brand a taste of success of its re-branding exercise since 2015.

The Butchers Block

Company: 9 Butcher Shops across Ireland. High visibility brand that

refreshed their brand and contacted emarkable(Digital Marketing
Strategies) so that they could develop a 10th location for selling online.
The Challenge: Develop a business model that can sell fresh produce
online at a profit. They had to showcase products and develop a
community that would benefit from buying online as well as buying
instore.

The Butchers Block

The Strategy:
Develop an online store that showcased the products.
Develop a community within each store location by local advertising and local
Google optimization.
Use social media to engage with the community.
Use email marketing and SMS to develop a loyalty program and alert
subscribers of special offers.

Implementation:
Quality photos was the initial focusa day(and night) in Dungarvan.
Quality descriptions from Jimmy, the marketing guru.
A flexible pricing structure for the general public with discounts weekly and
to loyal customers based on membership details.
Local deliveries and some guerrilla marketing tactics with local enterprises
and company specific deals from Andy.
Social Media (Facebook mainly) and email newsletters were developed.
Google rankings were developed and traffic started to hit the site.

Accenture Digital Agriculture: Improving Profitability

The total market size for digital-based services, known as precision
agriculture, is expected to grow at a CAGR of 12.2 percent
between 2014 and 2020 to reach $4.55 billion.
The impact of precision agriculture solutions (e.g., variable-rate
spraying) while an improvement over traditional methodshas
been limited by the granularity and timeliness of the data they
use and their lack of day- to-day operational decision support.
Accenture has combined digital technologies such as the Internet
of Things (IoT) with its big data analytics, visualization
capabilities, and industry knowledge to create two major
advancements in the market: Accenture Precision Agriculture
Service and Accenture Connected Crop Solution.

Two major activities

Accenture Precision Agriculture Service, large farms can harness

and make sense of a wide range of relevant data to increase the
amount of food they produce from the same acreage while
potentially improving their financial performance.

Accenture Connected Crop Solution, agro-input companies can

improve field agent productivity and product sales while helping
smaller farms use inputs more effectively in order to improve their
yields.

The evolution of (precision) agriculture

Agriculture Service :

Generating Vital Operational Insights for Large Farms

A farm must grow as much per acre as it can reduce the risk of crop failure,
minimize operating costs, and sell crops for the highest price possible.

By generating detailed insights, farmers can make data-based operational decisions

that will optimize yield and boost revenue while minimizing expenses and the chances
of crop failure.

Connected

to the farms work management system, which enables the platform to

automatically schedule.

Calculates the economic impact of each recommendation

Historical information on similar issues that may have been encountered

Common farm technology along with more specific opportunity for more
technologically proficient farmers to dig behind the data

Ex-

harvest 10 days early, ve days early, or as currently scheduledand the financial

impact

Accenture Connected Crop Solution :

Improving the Productivity and Effectiveness of Agro-Input Company Field Agents

- Traditional farming practices because they lack access to knowledge about

current practices
- Companies are challenged to reach smallholder farmers with the products and
product advice they need.
- Field agent is the link between company and farmer, yet these workers lack the
agricultural knowledge
- Agents also lack a mechanism to easily record and review farm and crop
details.

Accenture Connected Crop Solution for Smallholder Farmers connects

the stakeholders in rural agriculture
A mobile
application on
the field agents
hand-held device
is the hub for
connecting the
farmer to the
agro-input
company with a
steady stream of
information and
advice for
improving crop
yield throughout
a season.

Agriculture Advertising: Marketing Communications

- Marketing

communications are intended to both inform and

persuade a target audience, with a view to influencing the
behavior of that group.

- Range

from encouraging farmers to adopt improved practices to

grow crops, to encouraging industrial or consumer buyers to try a
product or service.

Marketing communications serve five key objectives:

- Provision of information
- Stimulation of demand
- Differentiating the product or service
- Underlining the products value
- Regulating sales.

Forms of marketing communications

1. Advertising: is characterized as a form of communication which
its sponsor pays to have transmitted via mass media such as
television, radio, cinema screens, newspapers, magazines and direct
mail. It is intended to both inform and persuade.

Forms of marketing communications

2. Sales promotion

Forms of marketing communications

3. Public Relation
The public referred to in this definition is any group having an actual or potential interest
in, or impact upon, an organization's prospects of achieving its goals. Such publics would be:
Community
Consumers
Channel members
Opinion leaders
Government
Media
Employees
The methods employed by public relations professionals include:
Open days
Sponsorship
In-house publications
Community projects
Press releases
Video films
Training courses
Annual reports

Sowing The Seeds Of Success By Communicating With The Market

Up until a few years ago, the Seed Co-op was production driven, admitted the Marketing Manager of The Seed Company
of Zimbabwe Limited. He was referring to a situation where the member growers decided how much of each crop they
wanted to grow and then asked the Seed Co-op to sell what they were willing to produce. The Marketing Manager went on to
say that the situation had changed and members had become, very much market-led. He meant that members had come
to understand the need to produce according to customer needs. The Seed Co-op made itself aware of customer needs
through marketing communications.
Zimbabwe's Seed Co-op formerly enjoyed a monopoly and did not see the need to advertise. This changed with the
introduction of market reforms that opened the seed supply business to competition. The Seed Co-op set its communication
objectives as:
To make groups, in addition to farmers, understand the role which the Seed Co-op played in the country's agriculture.
These groups were to include: government, financial institutions and manufacturers.
To create awareness that the Seed Co-op sold more than maize seed,
To communicate the importance of certified seed, and
To make potential customers aware of newly introduced seed varieties.
The seed Co-op's campaign was extensive, and costly. It covered: Rural radio advertising, Rural bus panels,
Posters with calendars; these showed the various agro-regions of the country and their recommended crops,
Press advertising in both commercial and peasant farmer publications; Rural cinema;
Sponsorship of televised weather reports, and Television advertising.
A post-evaluation of the impact of the advertising campaign was undertaken and the Seed Co-op pronounced itself
satisfied by the high level of recall of its promotional theme, War Against Hunger.
The Seed Co-op employed both sales and extension personnel but the two were seen to have distinct roles. In the words of
Mr. de Woronin, A different personality and approach is needed for selling, as opposed to extension work, which we at Seed
Co-op have learnt the hard way. Extension people cannot necessarily sell, and vice versa.
Public relations also figured strongly in the Seed Co-op of Zimbabwe's marketing communications programme. The
organisation became very active in both national and provincial trade fairs and in local field days, in a bid to establish sound
working relations with farmers.

Forms of marketing communications

4. Personal Selling

Knowledge Of The Market For Onions In The Yemen

In the Yemen Arab Republic onions were supplied from a region of the country
where yields were low, quality poor and supply seasonal. Farmers in Al Bayda, in
the southeast of Yemen, discovered that they enjoyed certain advantages in onion
production. Ideal agronomic conditions resulted in very high yields, they could
produce year-round and the quality was good. Many farmers in Al Bayda took up
onion growing and began to transport them over considerable distances to urban
markets. Whilst Al Bayda farmers had a comparative advantage in onion production
they had yet to determine how they could fully exploit this advantage in the
market. Since all growers belonged to the same tribe, their chief was able, as an
opinion leader and encouraged by a change agency, to convince the growers to
cooperate in production, transport and marketing. Coordinated production ensured
a continuous flow of produce to market, eight-ton trucks rather than one-ton trucks
went to market and transport costs per unit fell to 40 percent of their previous
leveI. Produce was sold direct rather than through wholesalers and growers' returns
improved by 40 percent.The Al Bayda farmers also registered themselves as a
cooperative in the neighbouring People's Democratic Republic of Yemen. Whenever
they learned by radio that prices were higher there, they were able to redirect
supplies to that market. A key factor in this success story was the extent to which Al
Bayda farmers kept themselves informed of market conditions through an extensive
information network. This included using radio, the telephone and messengers to
ensure that supplies were directed to where prices and demand said they were
most needed.

Developing the message

In most instances, the attention of the target audience can only be
held for a relatively short time.
Whilst a product or service could have a large set of selling points,
these will have to be narrowed down to a select few.
Moreover, the single most important selling point will be the one to
be included in the principal slogan or headline.
This is sometimes termed the unique selling proposition (USP).
For example, there is little to be gained from promoting the
nutritional superiority of hammer milled whole grain over roller
milled refined grain when consumers believe the latter is superior in
taste, colour and texture.

Factors influencing the communications mix

Nature of the market
Nature of the product
Stage in the product life cycle
Price
Size of promotional budget
Criteria for selecting communications media include:
- level of exposure
- level of impact
- nature of the target audience
- cost and cost effectiveness.
The cost-per-thousand method (CPM) is one of the most commonly used in measuring the cost effectiveness of
promotional media. For example, if it costs $100,000 to send a mobile cinema around the rural areas for 6 months,
to demonstrate the advantages of applying herbicide, and if it is estimated that some 50,000 farmers will see the
cine/video film, then the cost per thousand is:

Establishing promotional budget

- Percentage of sales
- Fixed sum per unit
- Competitive parity
- Residual sum
- Objective and task

Industrial Agriculture
https://www.youtube.com/watch?v=cajeNeQ5p64

Industrial marketing
Communications and sales that specializes in providing goods and services to other
businesses, rather than to individual customers.
Features of industrial marketing
fewer but larger market;
Close relations;
Complex buying process;
Continuous sales calls: to finalize the deal,
it requires constant follow-ups and continuous sales calls;
Expertise selling skills;
Influences;
Geographically concentrated buyer.
Derived demand- demand for industrial goods is ultimately derived from the
demand for consumer goods. Thus animal hides are purchased because consumers
buy shoes, purses, and other leather goods. If the demand for these consumer
goods slackens, so will the demand for all the industrial.

Inelastic demand the total demand for many industrial goods and services is not
much affected by price changes.
Fluctuating demand the demand for industrial goods and services tends to be
more volatile than the demand for consumer goods and services. This is especially
true of the demand for new plants and equipment.
Professional purchasing industrial goods are purchased by professionally trained
purchasing agents, who spend their work lives learning how to buy better.

Differences between consumer marketing and

industrial marketing
Product complexity
Industrial buyers
Bids and quotations
Advertising and promotion
Market information

Industrial market segmentation

1. Nested Approach
Demographics: industry, company size, customer location
Operating variables: company technology, product/brand use status, customer capabilities
Purchasing approaches: purchasing function, power structure, buyer-seller relationships,
purchasing policies, purchasing criteria
Situational factors: urgency of order, product application, size of order
Buyers personal characteristics: character, approach

2. Two-Stage Market Segmentation

Macro : Organization size, Geographic location, Standard industry classification, Purchasing
situation, Decision making stage, Type of institution

Micro: Buying decision criteria, Purchasing strategy, structure of decision making, attitude
towards supplier

3. When starting the segmentation process, instead of seeing customers as identical,

the build-up approach begins by viewing customer as different and then proceed to
identify possible similarities between them. "In a turbulence market (pretty much all
markets today), using a build-up approach is more suitable than a breakdown approach

Types of Agro-based Industries

1. Agro-produce processing units
They merely process the raw material so that it can be preserved and transported
at cheaper cost. No new product is manufactured. Ex: Rice mills, Dal mills, etc.

2. Agro-produce manufacturing units

Manufacture entirely new products. Finished goods will be entirely different
from its original raw material. Ex: Sugar factories, bakery, solvent extraction
units, textile mills, etc.

3. Agro-inputs manufacturing units

Industrial units which produce goods either for mechanization of agriculture or for
increasing productivity come under this type. Ex: Agricultural implements, seed
industries, pumpset, fertilizer and pesticide units, etc.

4. Agro service centers

Agro service centers are workshops and service centers which are engaged in
repairing and servicing of pump sets, diesel engines, tractors and all types of farm
equipment.

Marketing mix for Industrial Marketing

Industrial Marketing Strategies

Informational websites with language directed at other businesses
Personalized presentations to the management staff of potential clients
Product samples to demonstrate confidence in the quality of the product.
Online videos displaying products and sales staff

Industrial Marketing Process

Industrial marketing plan

Tailor the introduction to prospective clients
Potential client - the producer should shift focus from the general
introduction of its web presence to more personalized meetings and
presentations.
Communication with potential clients through email, phone conversations,
and in-person presentations helps nurture the business relationship.
Once the client is ready to discuss the details of a contract, the marketing
phase is nearly over. Maintain good working relation.

Institutional Arrangements For Promotion Of Agro Based

Industries
1.

Ministry of Agriculture: Deals with rice mills, oil mills, sugar mills, bakeries,
cold storage, etc.

2.

Khadi and village industries board: Covers traditional agro based industries
like gur, handicrafts, khandasari, etc.

3.

Director General of Trade and Development: Looks after the industries

engaged in the manufacture of tractors, power tillers, diesel engines, pump
sets, etc.

4.

Agro-industries Development Corporation: In each state mainly supply

agricultural machinery, inputs and agricultural advisory services to farmers.
Some corporations have also undertaken certain manufacturing activities in
agro-industries sector.

5.

Small Industry Development Organization: Deals with small agro-industries

like hosiery, processing of food products, beverages, food and fruit
preservation, agricultural implements, pesticide formulations, etc.

Constraints In Establishing Agro Based Industries

1. Proper guidance is not available to entrepreneurs.
2. It involves some element of risk taking
3. Change in crops / cropping pattern
4. Change in variety of crop due to technological improvement
5. Failure of monsoon may hit the raw material supply.
6. Proper guidance, training for modern and sophisticated agro-industries are not available.
7. As modern small industries are capital intensive, supply of finance will be a considerable
problem.
8. Promotional activities such as conducting, intensive campaigns, identifying candidate
industries and explaining to entrepreneurs about prospects are inadequate.
9. Uncertainty about future market demands.
10. Absence of information about quantity and quality of market.
11. Multiplicity of agricultural produce and absence of suitable methodology to select best
suited industries to a given region.
12. Seasonal supply of agricultural produce may result in under utilization of capacity of
the units as the unit will not be working throughout the year. Ex: Sugarcane
13. Industries based on fruits and vegetables may not get the same variety throughout the
year, but they may get some other variety.
14. Absence of proper integration among the various agencies of development in the
district.

Marketing Strategies
Speak Simply Keep it simple
Unaware
Aware But Apathetic
Curious
Trying it Out, But Not Committed
Gung Ho Newbie
Disillusioned
Unsure of Who to Trust
Gung Ho AND a Healthy Skeptic
Differentiate Quality Price - Value
Tell Stories Brand based stories - User-Experience Stories

What is Organic Exactly

Despite its relatively widespread popularity, confusion exists about what exactly
constitutes an organic product. The Organic Trade Association classifies organic
products as those produced without the use of:
Antibiotics
Synthetic Hormones
Genetic engineering
Sewage Sludge
Irradiation
Artificial Ingredients
Preservatives
Some of these values include:
Altruism (Relationships with others)
Ecology (Harmony with the Universe)
Universalism (Protection of the welfare of all people/nature)
Benevolence (Enhancing welfare of loved ones and friends)
Spirituality (Inner harmony and unity with nature)
Self Direction (Independent thought and action)

Motives & Deterrents of Buying Organic

Purchasing Motives:
Health and Nutritional Concerns
Superior Taste
Concern for the Environment
Food Safety
Concern over Animal Welfare
Support of Local Economy
More Wholesome
Nostalgia
Fashionable/Curiosity
Purchasing Deterrents:
High Price Premiums
Lack of Availability
Skepticism of Certification Boards and Labels
Insufficient Marketing
Satisfaction with Current Food Source
Sensory Defects

Product and Market Diversity Never put all your eggs in one
basket
Successful farming needs good business principles.
Always utilise a range of markets. Diversity is the key to
marketing.
Traditional Organic Market
- Local market
- Farmerss market
- Local shops, restaurants, hotels
- Farm gate sales, home delivery
- Agents, merchants
New Organic Marketing Models
- Relationship marketing
- Competitive marketing
- Product marketing
- Niche marketing

Ansoffs matrix provides a framework for analyzing

market and growth opportunities.

Main Growth Areas in Organic Market

Alcoholic beverages
Whole meals
Kids food
Fiber products
Cosmetics

Fast Growing Market

High Value Market
Need for Multiple Markets
Domestic, Retail, Local and Export
Need Multiple Products
Conclusion
Thank You
Find high value niche rather than low value commodity
Research products that can be grown easily with high
value
Need to identify customers

market

Purchasing Approach