Unit Title: Implement Agribusiness Marketing

Unit Code: AGR ANH1 07 0322

By: Shimelis Kebede(DVM)

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 Learning Objectives
LO1: Understand Concept of Agricultural Marketing
LO2: Understand Concepts of Agribusiness
LO3: Identify Marketing Targets for Agricultural Products
LO4: Implement Marketing Strategy
LO5: Establish Contract Farming
LO6: Apply Agricultural Marketing Services

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LO1: Understand Concept of Agricultural Marketing
Concepts of Marketing
Definition of Key Marketing Terms: Needs, Wants, Demands etc.
Need: need is a state of felt deprivation of some basic satisfaction. People
require
food, clothing,
shelter, safety,
belonging, esteem,
and a few other things for survival.
Want: Wants are desires for specific satisfiers of these deeper needs.
Human wants are continually shaped and reshaped by social forces and
institutions, such as
churches,
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schools, families, and business corporations 3
Demand: Demands are wants for specific products that are backed by
an ability and willingness to buy them.
Product is anything that can be offered to someone to satisfy a
need or want.
It refers to physically object.
 Service refers to intangible (nonphysical) products that satisfy
consumers’ wants and needs
Exchange is the act of obtaining a desired product from
someone by offering something in return
Transaction: A trade between two parties that involves at least
two things of value, agreed-upon conditions, a time of
agreement, and a place of agreement. It is also called legal
transfer of ownership

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What Is Marketing?
Marketing can be defined as:
The process of determining the needs and wants of consumers &
being able to satisfy those needs & wants profitability.
Marketing includes all of the activities necessary to move a product from
the producer to the consumer.
Traditionally, a “market” was a physical place where buyers and sellers
gather to buy and sell goods.
“The process of planning and executing the conception, pricing,
promotion and distribution of ideas, goods and services to create
exchanges that satisfy individual and organizational goals.”
(American Marketing Association)

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Marketing-is the management process responsible for identifying,
anticipating, and satisfying customer requirements profitably.
(The Chartered Institute of Marketing (UK)
A market is made up of buyers & sellers
Buyers are people who need or want a product or service and have the
money to buy it
A market must also have sellers who are willing & able to produce
goods & services for sale

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Agricultural Marketing
The bridge that links producer & consumer!
Agricultural marketing is the study of all activities, agencies, and
policy involved in the procurement of farm inputs and the movement of
agricultural product from the farms to the consumer .

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Importance of Agricultural Marketing
An efficient agricultural marketing system leads to the optimization of
resource use and output management.
An efficient marketing system ensures higher levels of income for the
farmers
Marketing system widens the market for the products by taking them
to remote corners both within and outside the country.
 Agricultural marketing helps in the growth of agro-based industries
and stimulates the overall development process of the economy.

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Price Signals: it gives farmers to plan production in accordance
with the needs of the economy
Adoption and Spread of New Technology
Employment creation
Addition to National Income
Creation of Utility

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Roles of Agricultural Market-Oriented Service
More specifically, roles of agricultural market-oriented service includes
Access to advisory services,
 knowledge and information;
credit and finance;
inputs and technologies;
organizational and business development;
and post-harvest value adding and market support.
 Linking farmers to input and output markets

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Market-Oriented Services
Technical expertise aimed at generating value by increasing the volume
and quality of production and the timing of the supply of raw materials;
Economics, marketing and business management expertise (e.g. farm
enterprise analysis, marketing information and business planning etc.);
Post-production expertise aimed at creating value along the value chain
through improved post-harvest handling, packaging, storage and
distribution, while meeting food safety and quality requirements;

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Support in strengthening producer and other value chain stakeholder
groups through improved collective marketing, [organizational
development], business management, financial management,
leadership, negotiation skills and linkages with research institutions and
other innovation actors;
Support in facilitating value chain development and strengthening
through improved coordination of production, negotiation of contracts,
brand development, linking producers to buyers as well as providing
advice on legal, regulatory and certification issues;

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Facilitating institutional changes – forming producer organizations,
clusters, networks and linkages among different actors along value chains
(e.g. convening multi-stakeholder forums to understand market
opportunities and constraints along value chains, develop contractual and
trust relations).
Information Communication Technologies (ICT) has a particular role to play
as an instrument for exchange of information amongst smallholder farmers
and value chain actors more broadly and at scale.

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Principles of Agricultural Marketing and Strategies
Identify and understand consumer preferences and demands.
Develop products and services that meet market needs.
Create strong brand identities that instill trust and loyalty.
Reach new markets and expand the customer base.
Maximize profitability and compete in a highly competitive landscape.

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Marketing Mix
Marketing involves a number of activities.
To begin with, an organization may decide on its target group of
customers to be served.
Once the target group is decided, the product is to be placed in the
market by providing the appropriate product, price, distribution and
promotional efforts.
These are to be combined or mixed in an appropriate proportion so as to
achieve the marketing goal.
Such mix of product, price, distribution and promotional efforts is
known as ‘Marketing Mix’.
The marketing mix is the set of marketing tools the firm uses to
pursue its marketing objectives in the target market.
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Product, Price, Promotion & Place
 These marketing mixes are sometimes called the four Ps.
 Note that the four Ps represent the sellers view of the marketing tool
available for satisfying and influencing buyers.
From the buyers point of view, each marketing tool is designed to
deliver a customer benefit.
Robert Lanrterborn suggested that sellers four Ps correspond to the
customer’s four Cs

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Four Ps Four Cs
• Product Customers solution
• Price Customer cost
• Place Convenience
• Promotion Communication

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All the marketing mixes are for better customer satisfaction.
Based on the marketing concepts, the whole activities of marketing
are centered on customer value. Hence, customer is not part of the
marketing mix.

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Types of Market Structure
Perfect Competitive
In a market with perfect competition, both producers and consumers are
price-takers.
Such a characteristic implies production and consumption decisions that
individual producers and consumers face do not affect the market price of the
good or service.
A perfectly competitive market can be characterized as a market where there
is an abundance of well-informed buyers and sellers, there is an absence of
monopolies, and each firm is a price-taker.
What are Price-Takers?
Price-takers are market participants that are unable to affect the market price
of goods through their production and consumption decisions.
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The two types of price-takers are:
1. Price-taking producers
A price-taking producer is a producer that cannot affect the market price
of the product or service they are selling.
2. Price-taking consumer
A price-taking consumer is a consumer that cannot affect the market
price of a good or service.

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Monopoly
Definition of Monopoly
A type of market structure, where the firm has absolute power to produce and
sell a product or service having no close substitutes.
In simple terms, monopolized market is one where there is a single seller,
selling a product with no near substitutes to a large number of buyers.
As the firm and industry are one and the same thing in the monopoly market, so
it is a single-firm industry.
There is zero or negative cross elasticity of demand for a monopoly product.
Monopoly can be found in public utility services such as telephone, electricity
and so on. KAN BIROS TARREESSAA MEE 
Under this marketing setting, a firm is the price setter; however, the pricing of
the product is done taking into account the elasticity of demand for the
product, so that the demand for the product and profit will be maximum. Look
at the diagram given below:
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Where MR = Marginal Revenue
AR = Average Revenue
MC = Marginal Cost
AC = Average Cost
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Monopolistic Competition
Definition of Monopolistic Competition
A market setting wherein scores of sellers sell a differentiated product is
called monopolistic competition.
Products are differentiated, by their brand name, packaging, shape, size,
design, trademark, etc.
Although the product sold by different firms in the industry remain close
substitutes for the rivals, as the products are not identical but similar.
Monopolistic competition is prevalent in the manufacturing industry, such as
tea, shoes, refrigerators, toothpaste, TV sets, etc.

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The salient features of monopolistic competition are given below:
A large number of sellers.
Differentiated products, yet close substitutes.
Free entry into and exit from the industry.
Perfect factor mobility
Full knowledge of market conditions.

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Under this setting, the consumers buy more when the prices of the product are
lower than at higher prices.
By equating marginal revenue with marginal cost, the firm’s profit can be
maximized, which can be seen in the given below diagram:

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As you can see in the diagram, the point at which MR (Marginal Revenue) and
MC (Marginal Cost) meet, is the price level, where P1 is the price and Q1 is
the output to be produced.
Difference between Monopoly and Monopolistic Competition
Monopoly refers to a market structure where there is a single seller dominates
the whole market by selling his unique product.
On the other hand, Monopolistic competition refers to the competitive market,
wherein few sellers in the market offer near substitutes to the customers.

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Types of Market
Two Types of Markets
Input market
The input market includes items like metal, fertilizer, seed & wood.
Producers purchase these types of products.

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Product market
This is the market where final products are sold to consumers.
Eggs and potatoes from farms are product market

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 THANK YOU!

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LO2: Understand Concepts of Agribusiness
Concept of agribusiness
Agri-business as a concept was born in Harvard University in 1957
with the publication of a book “A concept of Agri-business”,
written by John David and A. Gold Berg.
 It was introduced in Philippines in early 1966, when the
University of the Philippines offered an Agri -business
Management (ABM) programme at the under-graduate level.
 In 1969, the first Advanced Agribusiness Management seminar was
held in Manila.

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Definition of Agri-business:
“Agri-business is the sum total of all operations involved in the
manufacture and distribution of:
- farm supplies,
- production activities on the farm,
- storage,
- processing and
- distribution of farm commodities and items made from them” (John David
and Gold Berg)

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Agri-business involves three sectors:
1. Input sector: It deals with the supply of inputs required by the
farmers for raising crops, livestock and other allied enterprises.
These include seeds, fertilizers, chemicals, machinery and fuel.
2. Farm sector: It aims at producing crops, livestock and other products.
3. Product sector: It deals with various aspects like storage, processing
and marketing the finished products so as to meet the dynamic needs of
consumers.
Therefore, Agribusiness is sum total of all operations or activities
involved in the business of production and marketing of farm supplies and
farm products for achieving the targeted objectives

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Importance of Agribusiness
1. It deals with agricultural sector and also with the portion of industrial
sector, which is the major source of farm inputs like fertilizers,
pesticides, machines, processing and post-harvest technologies.
2. It suggests and directs the government and private sectors for
development of sub sectors.
3. It contributes a good part of the national economy.

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Roles of Agribusiness-Oriented Service
Agribusiness represents all providers of value-added activities in
agriculture.
It links input providers, producers, processors, and other services to
consumers of crops, livestock, and other natural resources
Agribusiness covers all the value-added activities that link raw materials
required for agriculture production to products and services that satisfy the
demand of end consumers of agriculture products.

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Agribusiness involves four links: input providers, producers,
processors, and other service providers.
Although agriculture producers are central to agriculture, the
agribusiness ecosystem enhances and adds value to its products to
deliver compelling value to the end consumer.
Agribusiness facilitates or leverages the transformation of agricultural
production into a form, at a place and a time at which a consumer
prefers to buy the product.

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Principles of Agribusiness and Strategies
The difference between managing large and small businesses, between
agribusinesses and other business rests in the art of applying fundamental
management principles to the specific situation facing the business
manager.
Recently developed concept of management, is to view management
as series of functions. These are:
1. Planning
2. Organizing
3. Directing

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4. Controlling
5. Coordinating
6. Communicating
7. Motivating
Execution of these functions is important for success of business
firm. In fact, this is the best concept of management.

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Planning
planning is the process by which a manager looks to the future and
discovers alternate courses of action.
Planning describes the adoption of specific programme in order to achieve
desired results.
It means the selection from among alternatives of future courses of action for
the enterprise as a whole and each department with in it.
It is determining goals, policies and courses of action and it involves the
processes like work scheduling, budgeting, setting up procedures,
setting goals or standards, preparing agenda and programming.
In the body of management knowledge, Planning is the MUSCLE and it
allows the other functions to move in the desired direction.
Planning is not a forecast but an action oriented statement.
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Definition:
The forward thinking (looking ahead) about course of action or activity
(developing alternatives) based on full understanding of all the related factors
and directed at specified objectives.
Why we need planning? Importance of planning:
1. Agri-business is a more complex activity.
2. Planning is essential for the business survival and development.
3. Planning reduces risks and safeguards against uncertainty.
4. It helps to achieve the objectives or goals and thereby move the things in a
right direction.
5. It improves operational efficiency of resources

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6. It is most basic function of management and a requisite to other functions.
7. Planning is an antecedent process.
Planning process may be divided into different steps, such that a highest
priority will be given to immediate need and later to the less priority needs.
8. After dividing the entire planning process in to different steps, the
problems are stated and objectives are framed.
These problems and objectives will serve as boundaries for thinking process
to prepare a plan of action.

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9. While stating problems and objectives certain assumptions should be
made depending up on situation which may or may not be under the
control of management.
After stating the objectives and assumptions, the plan of action will be
prepared to accomplish objectives and goals.
10. Planning necessitates faithfulness to objectives.

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Types / Levels of planning:
In agri-business planning may be of several types.
1. Financial planning
2. Industrial relations planning
3. Research and development planning
4. Physical facilities planning

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Strategic management is the set of managerial decision and action
that determines the long-run performance of a corporation.
It includes environmental scanning (both external and internal), strategy
formulation (strategic or long range planning), strategy implementation,
and evaluation and control.
The study of strategic management therefore emphasizes the monitoring
and evaluating of external opportunities and threats in lights of a
corporation’ s strengths and weaknesses.
Today’s business news is filled with reports of organizations making
changes in their strategies for whatever reasons.
An underlying theme of discussing strategic management is that good
strategies can lead to high organizational performance.

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Characteristic of Agribusiness
1. Management varies from business to business depending on the
kind and type of business.
It varies from basic producer to brokers, wholesalers, processors,
packagers, manufacturers, storage proprietors, transporters, retailers etc.,
2. Agri-business is very large and evolved to handle the products
through various marketing channels from producers to consumers.
3. Management varies with several million of farmers who produce
hundreds of food and livestock products
4. There is very large variation in the size of agri-business; some are
very large, while many other are one person or one family organization.

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5. Most of the Agri-business units are conservative and subsistence in
nature and family oriented and deal with business that run by family
members.
6. The production of Agri-business is seasonal and depends on farm
production.
They deal with vagaries of nature.
7. Agri-business is always market oriented.
8. They are by far vertically integrated, but some are horizontally
integrated and many are conglomerated.

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Dimension and structures of Agribusiness
Dimensions of Agri-business:
1. It deals with different components of both agricultural and
industrial sector, their interdependence and influence of one sector on
other.
2. It deals with decision making process of farm either private or
government in relation to production and selling aspects.
3. It deals with strengths and weaknesses of a project and thereby
their viability in competing enterprises.

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4. Agri-business is always market oriented.
5. Structure of Agri-business is generally vertical and it comprises the
following
a. Govt. policies and programs regarding raising of crops or taking
enterprises etc.
b. Research and extension programs of the Govt.
c. Farm supplies or inputs
d. Agricultural production
e. Processing
f. Marketing of agricultural products

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Structure of Agri-business:
Agri-business sector provides crucial backward and forward linkages.
It involves two important sectors.
1. Farm input sector: It deals with agro-based industries providing seeds,
fertilizers, feed, chemicals etc.,
The industries supplying machinery or equipment, implements and petroleum etc
are also important in this regard.
2. Farm product sector: It deals with production and distribution of
farm commodities.
Large cooperative bodies also exist in Agri-business, but they are few in
number, whereas small scaled agro industries are large in number.
The vertical integration of a farm is very common in poultry, fruit and
vegetable farms.
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Horizontal integration: If one firm assumes the functions of other firm
called the horizontal integration
Ex: Co-operative marketing societies, Co-operative farming societies.
Vertical integration: If one firm assumes other functions which are
having close relationship.
a. If one firm assumes other functions (succeeding) related to
consumption function is called forward integration.
Ex: A wholesaler firm assuming the function of a retailer.
b. If one firm assumes the other functions (proceeding) related to the
production function is called backward integration.
Ex: A wholesaler firm assumes the functions such as assembling,
processing, packing etc.
Conglomerate integration: If one firm assumes several functions which
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 THANK YOU!

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Group Discussion
Q1. Discuss the four links Agribusiness
involves, input providers, producers,
processors, and other service providers.
Q2. Discuss types planning in Agribusiness
Financial planning
Industrial relations planning
Research and development planning
Physical facilities planning
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LO3: Identify Marketing Targets for Agricultural
Products

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A target market defined as a set of buyers sharing common needs or
characteristics that the company decides to serve.
It is very important to select the target market to develop a suitable marketing
strategy.
 Every marketing strategy involves
marketing expenditure and
the return on a market program
These can only be identified if we are able to know the target market for
which the marketing program is targeted.
Hence, an understanding of the target market and measurement of their
attractiveness is a key decision in marketing.

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The next challenge for the marketer is to select one or more segments to target
with a right blend of marketing mix elements.
Both general factors which one uses to evaluate any economic opportunity
and the factors specific to the situation should be considered in evaluating
segment options against these criteria.
General factors: The following are some important general factors that one
should consider judiciously.
 Company thrust: While segmenting the market the firm needs to identify the
requirements for success in the identified target market.
Next, it must determine what particular business system consisting of
marketing, production, finance, personnel, etc.
will be needed to meet the requirements for success in that segment.
As far as possible, the firms thrust should be such that it gives the company a
key advantage in that segment.
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 Size and growth potential: In addition to the present size of the target market
the firm should also ascertain the future growth potential of the said target
market.
The current market demand by itself may prove misleading.
The measurement might also create its own problems.
Investment needed: Financial outlay required for tapping a particular target
market is another factor to consider and care should be taken to ensure that both
entry costs and costs associated with building market share have been included.
 Profitability: The question of profitability is associated with investment
decision.
To calculate it we have to estimate both future sales and costs involved in the
concerned segment.
Besides, it is necessary to also consider the value-added to the product that is to
be marketed in that target segment, for a low value-added product makes
profitability
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 Risk: Risk is unavoidable in business.
The usual risks associated with the extent to which a particular target market
would respond.
But these are not the only ones.
Other risks like the new product taking away part of the market share from the
existing product(s) of the company in that target market need also be considered
and monitored.
Competition: The selection of target market also implies indirectly selecting
the competitors with whom the company will compete.
Another important point to note in this context is that segment may be large but
may already be served by several well established competitors.
The question naturally would be whether one would like to enter such a segment
should be weighed in terms of cost –benefit analysis and then take a decision.
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Specific segmentation factors
The specific segmentation factors that you need to consider are as follows:
Segment durability: Remember, segments based on fads and fashions are of a
short duration that is their life cycles are ephemeral and your plans to tap such
segments must take this into account.
Besides, you can't think of making substantial investments in such ventures from
the long-term point of view.
Mobility: Mobility means the movement in and out of a segment of members of
a target group.
If the mobility rate of target group members is high in respect of a certain
product, say, hair oils, the company in order to keep its sales stable would have to
attract new users to its product.

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Visibility: Visibility refers to the extent to which the want of a target market or
segment is distinctive.
If what is sought by the members of that segment is perceived as very different
from what is sought in other segments then the segment `loyalty' will be greater
but those in other segments may regard that offering as very different and
something which is not meant for them.
Highly visible segments however, are likely to be more stable than other
segments of a market.
 Accessibility: Those in the segment or the target market should be directly
reachable through established communications and distribution channels.
If that particular segment cannot be reached then the entire exercise of market
segmentation will be futile.

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Approaches of Agricultural Market
Functions of Agricultural Marketing: Driving Efficiency and
Profitability
I. Market Research And Analysis: one of the key functions of agricultural
marketing is conducting market research and analysis.
Ii. Product Development and Standardization
Iii. Pricing and Price Discovery
Iv. Promotion and Advertising
v. Distribution and Logistics
Vi. Market Intelligence and Risk Management
Vii. Market Linkages and Value Chain Integration
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Liberalisation of Agricultural Markets: An Institutional Approach
The push for liberalisation in agricultural markets in developing countries is part
of a more general move to reduce the extent of direct government involvement
in the provision of goods and services and in regulating markets.
This has been evident in the privatization programs.
Commodity Approaches of Agricultural Market
Trade policies in food and agriculture should aim to safeguard global food
security, address the trade-offs between economic and environmental
objectives, and strengthen the resilience of the global agrifood system to shocks,
such as conflicts, pandemics and extreme weather.

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Behavioural Approaches of Agricultural Market
This is the diversity of the agents involved in the production systems
and the agro-food value chains in which opposing interests must be
reconciled.
The application of behavioural economics in agriculture has focused on
analysing consumers, producers, management, marketing,
development, environmental issues, climate change, food and health.

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Segment Descriptors
The Concept of a Segment
In market segmentation, the marketers divide the heterogeneous
customers into certain groups or segments each of which tends to be
homogeneous in a significant respect.
Thus, companies through market segmentation divide large,
heterogeneous markets into smaller segments that can be pursued more
efficiently and effectively with products and services that match their
unique needs.
Be clear that in the process of market segmentation, it is the
consumers/individuals who are segmented and not the product or the
price.

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Benefits of segmentation are:
• Segmentation helps a company to exploit its market better by selecting
market niches (suitable segments) that are compatible with its resources
• Segmentation helps in focusing strategies more sharply on target groups
• segmentation is more likely to result in instilling customer `loyalty' since the
firm's offering is better matched to those in the segment.
• Segmentation provides the innovative marketers to spot out the unique
business opportunities by identifying those market segments where the
established firms are underperforming.
• Customer satisfaction can be accomplished by providing a value offering
that matches the value proposition considered important by a target segment.

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Doubts about effectiveness of segmentation
The discussion that follows concentrates on the doubts which have been
expressed on the effectiveness of segmentation.
Are segments mutually exclusive groups?.
Bases for Segmentation
As you know, market segmentation means dividing the market into several
homogeneous sub markets or segments.
Now the question is: what is the basis of segmenting the market? In fact there is
no single way to segment a market.
A marketer has to try different segmentation variables to view the market
structure.
Let us discuss it 

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Geographic Segmentation: As the name suggests the market is divided on the
basis of location.
A company may divide the market into different geographical areas such as
nations, regions, states, cities, rural, urban and semi-urban areas.
It also involves segmentation based on climatic conditions.
The basic reason of using geographic base for segmentation is that people who
live in the same area share some similar needs and wants compared people
living in other areas.
Demographic Segmentations
Instead of focusing on the differences in benefits sought, marketers divide
potential customers in the market on the basis of demographic variables such as
age, gender, family size, income, occupation, education, location, religion, race
and nationality.
Demographic variables are the most popular bases for distinguishing customer
groups.
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Social class
Demographic variables can be combined to form social classes.
Social class is defined in terms of a number of demographic variables varying
from a single indicator like occupation to the use of a combination of factors
like occupation, source of income, type of home or residential area.
Social class has a strong influence on the person's preferences in regard to
clothing, home furnishings, leisure activities,' reading habits, and so on.
Family life cycle
Another basis for segmentation that draws on demographic factors is family life
cycle, where each stage in the cycle is a combination of age, marital status and
age of children.

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Psychographic Segmentation
Psychographics is the study of consumers primarily based on their activities,
interests, and opinions (AIOs).
It goes beyond classifying people based on general demographic data, such as
age, gender, or race.
Psychographics seeks to understand the cognitive factors that drive consumer
behaviors.
This includes emotional responses and motivations; moral, ethical, and
political values; and inherent attitudes, biases, and prejudices.

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Personality variables
Besides AIO inventories and demographic variables we also use other variables
in segmenting a market on a psychographic basis.
These are variables that help in producing a more relevant profile of the
consumer.
The most commonly used variables of this type are personality variables.
Self-image is one aspect of personality that may relate to buyer behavior.
Some marketers use this approach to endow their product with brand-image that
corresponds to self-image of the consumer.
In fact, the assumption that buyers seek a match between self-image and brand-
image is implicit when advertising appeals to certain types of personality.
Some other important personality variables that may be used in psychographic
segmentation are: impulsiveness, sociability, achievement orientation,
masculinity, self confidence, conservativeness, prestige consciousness, alertness
to change,
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thriftiness, and sentimentalism. 73
Other bases:
Usage rate
Segmenting by Generation:
Every generation is profoundly influenced by the times in which it grows up.
Segmenting Industrial (Organizational) Markets
Segmenting Industrial markets is as similar to segmenting consumer markets
with similar and comparable variables.
In particular, there are three commonly used bases: 1) type of customer 2) size of
customer; and 3) type of buying situation.

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Strategy of Agricultural Marketing Options
o Analyse agricultural market
o Analyse competition
o Define market mix
o Determine position
o Marketing budget
o Execution plan understand potential customers

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 THANK YOU!

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Business Plans to Perform Cost and Benefit Analysis
A business plan, in principle, can be seen as a document that
commercializes your business idea as a whole towards potential
investors and stakeholders.
A business plan should justify and describe your business idea and
further business development in a clear and adequate manner.
It should not merely aim at emphasizing the strengths of the company,
but rather at presenting a realistic portrait of its problems, risks and
obstacles.
In addition to this, appropriate solutions should be proposed and
discussed in detail.

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1. Key questions
• What goals are you pursuing with your business plan?
• What purpose should your business plan serve?
− Preparation for negotiations with banks
− Presentation for investors
− As an internal management tool
• What kind of financing are you striving for and how much capital do you
require?
• Which target groups and people do you want to approach by means of your
business plan?
• What expectations, needs and demands do your readers have?
• Which type of business plan will you choose and why?
• Are06/07/2024
there any reasons why you would still prefer not to write a business plan?
78
2. Business Plan Project
Although business plans vary in their structure and content, they all have some
features in common: they propose and describe business models, products or
services, describe their corresponding markets, ways of production and service
delivery. Indeed, external addressees of business plans usually want to know:
• Who the shareholders are,
• How much capital is required,
• How and for what purpose capital is utilized,
• Which type of financing will be chosen, and
• In what period of time an adequate return on investment can be realized.

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Every business plan should clearly discuss these essential issues, and present them concisely
and in a convincing way.
The reader should be in a position to understand the business as a whole and to gain
confidence in the company.
In order to deal with these issues in a sophisticated and professional manner, it is wise to draw
up your business plan within the framework of a company-wide project; this we call the
“business plan project”.
It is not advisable to start writing a business plan when you are still unprepared as regards
organization and then to expect that everything will be compiled and explained by itself.
Instead, sound project planning should precede the development of the business plan.
As shown in figure 1 the business plan project is usually structured into five phases:
• Data collection
• Data analysis
• Design of the business plan
• Drawing-up of the business plan
• Presentation
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Fig.1.Phases of the business plan project.
The business plan should be structured into clearly defined sections. These sections should show the
different aspects of your business i.e. your company.
In general, the sections of a business plan correspond to different business fields:
• Management and organization,
• Products and services,
• Market and competition,
• Marketing and sales,
• Research and development,
• Production,
• Procurement
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and logistics and 81
Imagine that each of these sections or areas has its own partial business plan.
Provided that data collection is carried out once over all areas at the beginning
of the project, the process of compiling each partial plan would be sub-divided
into four phases:
• Data analysis for a specific area,
• Design of the partial plan for a specific area, in order to facilitate a disciplined
collaboration, assuring the quality of the entire process.

Fig. 2. The development of the project plan.

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Before starting the project, the work packages, the activities and the
responsibilities and timelines should be well communicated and covered by all
project team members.
This could be done by an opening meeting (kick off).
Indeed, it is not recommended to engage external consultants for the preparation
of a business plan.
The engagement of external consultants, of course, may seem to save precious
time, however, investors and analysts recognize quite quickly whether a
business plan was written by an entrepreneur himself or by a professional
consultant; they would usually prefer the former and reject the latter.
Temporarily, however, independent consultants could be engaged for reviews in
order to evaluate the plan or excerpts of it from the viewpoint of an independent
expert.

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 THANK YOU!

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LO4: Implement Marketing Strategy
Implementation of marketing includes
- Internal marketing,
- Total quality management, and
- Implementing the marketing mix.

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Designing Agricultural Marketing Functions
Strategy to Perform Agriculture Business.
It includes:
- Function of marketing
- Market program
- Achieve the market objectives
Function of marketing
Marketing is the process of turning a prospective consumer into a happy
and satisfied customer

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Marketing involves various functions such as:
Identifying the needs and wants of the consumer
Gathering and analysing market information
Planning and developing products and services
Pricing and financing
Promotion and advertising
Selling and distribution
Managing product and service quality

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Market program
A marketing program is all the
- People,
- Processes,
- Technologies and
- Activities involved in making connections and
- Building relationships to achieve an end goal.
In both business-to-business (B2B) and business-to-consumer (B2C) markets,
that end goal is to engage potential customers and improve sales of products
and services.

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Achieve the Market Objectives
Marketing objectives are actionable goals that provide overall directions to a
specific campaign.
Think of your marketing plan as a target that
 your team is looking to reach within a particular timeframe.
Also, it comes with a metric that serves as a symbolic finish line.
Marketing plans should be specific, measurable, attainable, relevant, and
time-based.
The acronym SMART goals can help remember these words

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Developing Action Plan to Implement Agricultural
Marketing Strategies
The action plan includes (Resource, Budget, Time and Output)
Resource
Resource planning considers both
- The availability and
- The demands of resources
while resource scheduling involves
- the actual assignment of resources to specific tasks or activities
Resource planning and allocation can occur at different levels in the
organization, such as the corporate level or the business level

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Budget
A budget is
- an estimation of revenue and
- expenses over a specified future period of time and
- is utilized by
governments,
businesses, and
individuals at any income level.
A budget is basically a financial plan for a defined period,
normally a year that is known to greatly enhance the success of any financial
undertaking
Times
When about!
Output
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The amount produced in a given time
Identification and Coordination of Required Resources
to Implement Agricultural Marketing
Implementing agricultural marketing requires
- resource identification and
- coordination

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Implementing Marketing Mix According to the Strategy of Agricultural
Marketing
A good first step is to consider the 4Ps of marketing
These include:
Product. What are you offering? It can be a physical product, digital item,
service, event or experience.
Price. What are you charging for your product? Calculate this by determining
your net cost of goods and then adding on an additional amount to meet your
desired profit margin.
Place. Where do you sell your goods?
Promotion. How do you get the word out about your products?
This is usually a mix of various marketing strategies, including
- paid advertising,
- content marketing,
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93
- social media marketing and more
 THANK YOU!

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LO5: Establishing A Contract Farming
5.1 Concept of Contract Farming
Contract farming (CF) defined as
forward agreements specifying the obligations of farmers and buyers as
partners in business.
Legally, farming contracts entail
- the sellers’ (farmers’) obligation to supply the volumes and qualities as
specified, and
- the buyers’ (processors’/ traders’) obligation to off-take the goods and
realise payments as agreed.

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5.2 Types of Contract Farming
Market specification (or marketing) contract
Pre-harvest farmer-contractor agreement on terms of delivery (e.g. varieties,
qualities, quantities/ quota, time of delivery)
that are crucial for farmers’ production decisions.
The farmers maintain most of the decision rights over farming activities and
farm assets.
The farmers bear the production risk; the marketing risk partly transferred to
the buyer.

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Production management contract
The farmers delegate a substantial part of decision rights over
production/ harvesting practices to buyers by agreeing to follow
contractor’s farming specifications.
The contractor specifies and inspects production processes and bears
most of the marketing risk.

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Resource providing contract
The contractor provides inputs as in-kind credits with costs being recovered
upon product delivery.
The level of transfer of decision-making and risks from farmers to buyers
ranges from production management by farmers up to full production
management by contractors.

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Models of Contract Farming
Models are usually differentiated based on the intensity of vertical
coordination, the type of product and the number of key actors involved.
The five types of contract farming models are outlined hereunder.
The centralised model
In which an agribusiness buys from a large number of smallholders under
- strict quality control conditions and
- in predetermined quantities.

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The involvement of the agribusiness can vary from
- merely providing the seeds to providing different services and
technologies at various stages.
Nevertheless, the model usually involves the provision of
- extensive technical support,
- inputs and
- close control of the production process.

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 The nucleus estate model
Is a variation of the centralised model where an agribusiness
- owns the plantation adjacent to independent contracting farmers.
The central estate is usually used to guarantee through put for the processing unit
but at times, it is used only for research and breeding purposes.
The multipartite model
Involves various actors in the contract such as
- governments,
- NGOs and
- service providers.
It usually also involves dealing with farmers’ organizations such as cooperatives
as well as joint ventures between the government and the private sector.
Contracts under this model may involve a varying degree of coordination
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As a result, besides minimising the cost of providing extension and
other services,
agribusinesses are able both to improve efficiency by using farmers’
groups to deliver inputs and
to ensure the application of appropriate technical standards.
In addition, the third party (an NGO or the government) in the multi
partite model can play an important role in dispute resolution and
contract enforcement.

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The informal model
Is usually characterised by individual entrepreneurs and/or small companies
that enter into informal contracts,
usually on a seasonal basis.
Unlike the above models, this model has limited resources for strong
vertical coordination,
so that its success usually depends on the support provided by the
government or other service providers.
In this model, the provision of material and technical input is commonly
limited to seeds and basic fertilisers, grading and quality control.

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The intermediary model
Involves intermediaries between producers and buyers who subcontract
buyers.
In this model, because of the absence of strong linkages with farmers,
buyers run the risk of losing control over quality, quantity and price.
For similar reasons, farmers operating within this intermediary model
are not safe from market uncertainties.
In practice, the aforementioned models are not mutually exclusive;
combined features of different CF business models may be found in one
contractual arrangement.

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Steps and procedures of contract farming
establishments
Process-structure: three phases for developing contract farming
schemes
A well-planned and practice-oriented strategy is required for translating
the theory of contract farming into action.
Phase 1: Initiate & plan;
Phase 2: Implement & learn;
Phase 3: Sustain & grow.

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The following illustration gives an overview of the phases and the related
recommended steps

Fig.06/07/2024
Process structure: phases and steps for developing CF schemes 106
Identification and Application of Contract Farming
Requirements Based on the Organizational Standard
Contract Farming Agreement
A contract farming agreement is a joint venture between a landowner or
occupier and a contractor,
with each party providing different capital inputs and
sharing the costs of variable inputs such as labour, machinery, and other
resources.
This arrangement allows for a more efficient and profitable production process
while reducing the risks associated with farming operations.

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Under a contract farming agreement, the farmer provides
- land,
- buildings, and
- other fixed equipment,
while the contractor is responsible for providing
- the labour and
- machinery required for the farming activities.
Roles and operations are defined by the terms of the contract,
which are based on the farmer’s business policies and objectives.
This not only helps reduce operational costs but also allows both parties to
focus on their core competencies and derive maximum benefits from their
respective contributions.
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Establishing Contract Farming Systems
Establishing contract farming can bring numerous advantages to farmers,
including
- a guaranteed market,
- access to resources and technical assistance,
- price stability, and
- improved income.
By carefully considering the terms of the contract and engaging in transparent
and fair negotiations, farmers can
- maximize the benefits of this arrangement and
- contribute to the long-term sustainability of their agricultural operations.

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It is important for farmers to
carefully review and
negotiate the terms and conditions of the contract to ensure fairness and
protect their interests.
Understanding
- the obligations,
- payment terms,
- dispute resolution mechanisms, and
- exit clauses is crucial before entering into any agreement.
Seeking legal advice or assistance from agricultural extension services can be
beneficial in this process.

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Contract specifications:
Establishing contract farming has to follow a clear contract specifications

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 THANK YOU!

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LO6: Apply Agricultural Marketing Services
6.1. Identifying and Delivering Agricultural Products to Provided
Marketing Services
When delivering marketing services for agricultural products,
proper identification of the products is essential.
Effective agricultural product identification ensures accurate communication
with customers,
facilitates efficient distribution, and
helps build a strong brand image.
Here are some key steps to consider for agricultural product identification in
your marketing services:

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1. Product Naming: Choose a clear and descriptive name for your agricultural
products.
2. Product Labeling: Design and create visually appealing and informative
labels for your products.
Include important details such as
- the product name, - brand logo,
- nutritional information (if applicable),
- certifications (e.g., organic, fair trade), and
- any relevant product claims or benefits.

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3. Packaging Design: Pay attention to the packaging design of your
agricultural products.
Ensure that the packaging is practical, durable, and visually appealing.
4. Product Description: Provide detailed and accurate descriptions of your
agricultural products in your marketing materials.
5. Product Photography: Capture high-quality photographs of your
agricultural products

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6. Product Differentiation: Clearly communicate the unique selling points
and differentiators of your agricultural products.
Identify what sets your products apart from others in the market.
7. Consistency: Maintain consistency in your product identification across all
marketing channels.
8. Customer Feedback: Continuously gather customer feedback on your
product identification efforts.

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Conducting Need Assessment to Identify Marketing Conditions
Here are some steps to effectively conduct a needs assessment and
identify the marketing conditions:
1. Define the Purpose: Clearly define the purpose of your needs assessment.
2. Identify Target Audience: Determine the target audience for your
agricultural products.
This could be based on specific market segments.

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3. Research Market Trends: Stay updated on the latest market trends and
industry developments.
- Analyze market reports,
- industry publications, and
- online resources to identify emerging consumer demands, changing
preferences, and market dynamics.
4. Analyze Competitors: Conduct a thorough analysis of your competitors.
5. Gather Customer Feedback: Seek feedback directly from your existing
and potential customers.

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6. Engage with Industry Experts: Connect with:
- industry experts,
- agricultural extension services, or
- marketing consultants who have experience in the agricultural sector.
7. Assess Distribution Channels: Evaluate the available distribution channels
for your agricultural products.
Identify the most effective and efficient channels to reach your target market.

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8. Analyze Data and Make Decisions: After gathering all the necessary
information, analyze the data collected during the needs assessment.
- Identify patterns,
- trends, and
- opportunities that emerge from the data.
Use this analysis to make informed decisions about your marketing strategies,
such as
- product positioning,
- pricing,
- promotion, and
- distribution.
9. Regular Monitoring and Evaluation: Marketing conditions are dynamic,
so it06/07/2024
is important to continuously monitor and evaluate the effectiveness of 120
your
marketing strategies.
Developing Market Strategies to Implement Agricultural
Marketing Services
 Here are some key steps to consider when developing your marketing
strategies:
1. Define Your Marketing Goals: Start by clearly defining your marketing goals.
2. Identify Your Target Market: Determine your target market for your
agricultural products.
- Analyse demographics,
- consumer behaviour, and
- market trends to identify the specific group of people who are most likely to be
interested in your products.
3. Develop a Strong Value Proposition: Define your unique value proposition.
Identify what sets your agricultural products apart from competitors and why
customers should choose your products.
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4. Select Marketing Channels: Determine the most effective marketing
channels to reach your target market.
5. Create Compelling Content: Develop high-quality and engaging content
to promote your agricultural products.
6. Build a Strong Online Presence: Establish a strong online presence
through
- a well-designed and user-friendly website,
- active social media profiles, and
- regular content updates.

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7. Utilize Influencer Marketing: Collaborate with influencers or industry
experts who have a strong presence and influence in your target market.
8. Implement Promotional Campaigns: Develop promotional campaigns to
generate interest and boost sales.
This could include limited-time discounts or offers, loyalty programs, referral
programs, or partnerships with complementary businesses.

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9. Measure and Evaluate: Continuously measure and evaluate the
effectiveness of your marketing strategies.
Track key performance indicators (KPIs) such as website traffic, social media
engagement, conversion rates, or sales revenue.
Use this data to identify areas for improvement and make data-driven decisions
to optimize your marketing efforts.
10. Adapt and Evolve: Monitor market trends, consumer behavior, and
industry developments.
Stay flexible and adapt your marketing strategies accordingly.

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Collecting and Organizing Customer Feedbacks to Improve
Agricultural Marketing Services
 Steps to effectively collect and organize customer feedback for the
purpose of improving agricultural marketing services are:
1. Establish Feedback Channels: Create multiple channels for customers
to provide feedback.
This can include
- online surveys,
- feedback forms on your website,
- comment cards at physical locations, or
- even direct communication through email or phone.
Make it easy and convenient for customers to share their thoughts.
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2. Encourage Open Communication: Encourage customers to provide
feedback
by emphasizing that their opinions are valued and will be used to improve the
services.
3. Regularly Monitor and Respond: Regularly monitor the feedback
channels to ensure that you are aware of
- all customer comments and
- suggestions.
Respond promptly to acknowledge feedback and let customers know that their
comments have been received and are being taken into consideration.

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4. Categorize and Analyze Feedback: Categorize the feedback received into
different themes or areas of improvement.
5. Prioritize Areas for Improvement: Based on the analysis of customer
feedback, prioritize the areas that require improvement.
6. Take Action and Implement Changes: Develop an action plan to address
the identified areas for improvement.
7. Communicate Changes to Customers: Once changes have been made,
communicate them to your customers.
8. Continuously Seek Feedback: Collecting and organizing customer
feedback should be an ongoing process.

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Organizing and Documenting Data to Report to the Concerned
Body
Organizing and documenting data is essential for effective data management
and analysis.
Proper organization ensures that your data is
- easily accessible,
- understandable, and
- usable for making informed decisions.
- Here are some steps to help you organize and document your data
effectively:

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1. Identify Data Categories: Start by identifying the different categories or
types of data you need to organize.
2. Choose a Data Management System: Select a data management system
that suits your needs.
This could be a spreadsheet software like
- Microsoft Excel or
- Google Sheets,
- a database management system like Microsoft Access or MySQL, or
- specialized data management software.
Consider the volume and complexity of your data when choosing the
appropriate system.

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3. Establish Data Storage Structure: Create a logical and consistent structure
for storing your data.
This includes
- defining folders,
- subfolders, and
- file naming conventions.
Use descriptive names for folders and files that clearly indicate the content and
purpose of the data.
This makes it easier to locate and retrieve specific data when needed.

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4. Standardize Data Formats: Establish consistent formats for data entry and
storage.
This includes
- defining the structure of your data tables or spreadsheets,
- specifying data types, and
- setting guidelines for data input.
5. Data Documentation: Document the details and characteristics of your data.
This includes
- recording the source of the data,
- date of collection,
- methodology used, and
- any relevant notes or observations.
Documentation helps maintain data integrity and provides important context for
future analysis.
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6. Data Cleaning and Validation: Regularly clean and validate your data to ensure
accuracy and reliability.
Remove any
- duplicate entries,
- correct errors, and
- validate data against predefined criteria or business rules.
This helps maintain data quality and integrity.
7. Implement Data Security Measures: Protect your data by implementing
appropriate security measures.
This includes
- setting access controls,
- encrypting sensitive data,
- regularly backing up your data, and
- implementing
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8. Backup and Recovery: Regularly backup your data to protect against data
loss or system failures.
Implement a backup schedule and store backups in secure and accessible
locations.
Test your backup and recovery procedures to ensure their effectiveness.
9. Data Retention Policy: Establish a data retention policy that outlines
- how long data should be kept,
- when it should be archived, and
- when it can be deleted.
This policy ensures compliance with regulatory requirements and helps optimize
storage resources.

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10. Regular Data Maintenance: Perform regular data maintenance
tasks to keep your data organized and up to date.
This includes archiving or purging outdated data, updating records, and
addressing any data management issues that arise.

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 THANK YOU!

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 -THE END –

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