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Marketing Basics

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Marketing Basics
Aquaculture Marketing
Opening Comments
Aquaculture—old in practice, new ag
industries
Rapid expansion globally
Development plagued by marketing
problems
Main problem: matching production to
market needs
Opening Comments
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
Opening Comments
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
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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.)
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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)
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