This document discusses positioning and marketing strategies for agribusinesses. It defines positioning as creating a desired image in customers' minds. Effective positioning involves analyzing competitors, developing a unique position, creating a positioning statement and tagline, and testing the positioning strategy. The marketing mix refers to the product, price, promotion, and place strategies used to support a market position. Pricing strategies discussed include cost-based, competitive, value-based, penetration, skimming, discount, psychological, and prestige pricing. Product decisions involve the product mix, adoption process, and life cycles.

1. ADS 505: Agribusiness Management
Chapter 6
Marketing Management for Agribusiness
Content:
 Components of a strategic marketing plan
 Positioning
 The marketing mix

2. Positioning
2
 Positioning is the process of creating the desired image in
the customer’s mind.
 Al Ries and Jack Trout, in their marketing classic
Positioning: The Battle for Your Mind (1982: 2), state:
“Positioning starts with a product, a piece of merchandise, a
service, a company, an institution or even a person.… But
positioning is not what you do to the product. It is what you
do to the mind of the prospect.”
 When an agribusiness brings a product or service to the
market, it is important that they be very clear on what
image or position they are trying to create.
 The desired position of the product or service becomes the
bridge between the needs and wants of the target market
and the specific actions the firm will take to satisfy those
needs and wants.

3. Positioning
3
 An agribusiness firm’s competitive advantage is that set of
competencies where the firm has a clear and distinct
advantage over the competition.
 Competitive advantage is the firm’s edge in the
marketplace, it is the reason customers choose to do
business with the firm as opposed to buying from another
organization.
 Customers want a competitive advantage that benefits them
and their operation.
 Clearly establishing those competitive benefits relative to
the customer’s needs and wants allows you to earn a place
in the mind of the customer — effectively positioning your
product/services.

4. Positioning
4
Steps to Create an Effective Positioning Strategy
Step 1. Find your current position
Your current position in the market gives you essential
insight into where to go next. You should understand your
current position to analyze your competition further.
Think about the following few questions to state your current
position in the market:
• What does your brand stand for?
• Who are your target consumers?
• What are your mission and vision?
• What makes you stand out from the rest of the market?
• What customers’ pain points that your brand can solve?

5. Positioning
5
Steps to Create an Effective Positioning Strategy
Step 2. Analyze your competitors
There are many methods for determining your competition,
including:
• Conduct market research. Do a quick search using
relevant keywords and see which companies are listed. Or,
you can ask your sales team what sales tactics rivals come
up during the sales process.
• Use customer feedback. Ask your consumers which
businesses or products make them consider before
choosing yours.
• Take advantage of social media channels. Many free
platforms allow users to ask questions about products and
services. Search these communities and forums to explore
competitors in your niche.

6. Positioning
6
Steps to Create an Effective Positioning Strategy
Step 3. Develop your unique position
Building a unique position is all about determining what
makes you different and what works best for your business.
You can realize some businesses that have the same strong
and weak points. When you compare your product or service
to theirs, you might find one of their weaknesses is your
strength.
This is exactly what makes your position unique, and it
becomes the perfect starting point for positioning your
brand in the market. Remember to note your unique offerings
as you compare and dive deep to see what you do better than
anyone else.

7. Positioning
7
Steps to Create an Effective Positioning Strategy
Step 4. Create a positioning statement
Some experts recommend answering these questions before
creating your positioning statement:
• Who is your target audience?
• What is your product or service category?
• What is the greatest benefit of your product or service?
• What is the proof of that benefit?
For example, let’s look at Amazon’s positioning statement:
“Our vision is to be the earth’s most customer-centric
company; to build a place where people can come to find and
discover anything they might want to buy online.”

8. Positioning
8
Steps to Create an Effective Positioning Strategy
Step 5. Create your tagline
Once you craft a strong positioning statement, you can create
a tagline, or better known as a slogan, for use externally for
potential customer messaging.
.

9. Positioning
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Steps to Create an Effective Positioning Strategy
Step 6. Test your marketing positioning
 Once Positioning is created, you should spend time
testing, experimenting, and gathering feedback from your
consumers on whether or not your positioning achieves its
goal.
 Testing should feature a blend of quantitative and
qualitative research, from surveys and polls to focus
groups and in-depth interviews. Based on these tests’
findings, you can finally solidify your positioning in
marketing and adjust your ma.rketing efforts, if necessary

10. The Marketing Mix
10
 The marketing mix refers to the set of actions, or tactics,
that a company uses to promote its brand or product in the
market.
 The four Ps of marketing: product, price, promotion, and
place — is called the marketing mix.
 The marketing mix is that combination of price, product,
promotion, and place strategies implemented by a firm to
support a specific position in the market.
 For an agribusiness marketing program to be successful,
each of these elements must complement one another in
order to create the intended position in the market.

11. The Marketing Mix
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Figure: The Marketing Mix

12. 1. Product/service/information decisions
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 Product/service/information decisions form the heart of
the marketing strategy and are among the most
fundamental decisions an agribusiness makes.
 Decisions that must be made here include:
 The mix of different products and services offered,
 The extent of each product line,
 The specific characteristics of each product sold, and
 The level and type of information provided in the
bundle.
 Product mix refers to the total number of product lines
that a company offers to its customers.
 The product lines may range from one to many and the
company may have many products under the same product
line as well. All of these product lines when grouped
together form the product mix of the company.

13. Product mix
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 The product mix has the following dimensions:
1. Width: The width of the mix refers to the number of
product lines the company has to offer.
 For example – if a company produces only soft drinks and
juices, this means its mix is two products wide. Coca-Cola
deals in juices, soft drinks, and mineral water, and hence the
product mix of Coca-Cola is three products wide.
2. Length: The length of the product mix refers to the total
number of products in the mix.
 That is if a company has 5 product lines and 10 products
each under those product lines, the length of the mix will be
50 (5 × 10).

14. Product mix
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3. Depth: The depth of the product mix refers to the total
number of products within a product line.
 For example – Colgate has different variants under the
same product line like Colgate advanced, Colgate active
salt, etc.
4. Consistency: Product mix consistency refers to how
closely products are linked to each other.
 Less the variation among products more is the consistency.
 For example, a company dealing in just dairy products has
more consistency than a company dealing in all types of
electronics.

15. The marketing mix
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Figure: Product Mix

16. Product adoption and diffusion
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Rogers ( 1995 ) suggested that ideas are diffused through
the market in systematic stages:
1. Awareness: at this stage, people have heard about the
product but lack sufficient information to make a
purchasing decision
2. Interest: a potential customer becomes interested enough
to learn more about the product
3. Evaluation: the customer decides whether or not to try the
product
4. Trial: the customer samples the product
5. Adoption: the customer integrates the product into a
regular-use pattern

17. Product adoption and diffusion
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Figure: Categories of new technology adopters

18. Product life cycles
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Product life cycles relate to the sales and profits of a product
or service over a period of time.
Figure: The product life cycle

19. 2. Price decisions
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Pricing is a critical marketing decision because it so greatly
influences the revenue generated by an agribusiness.
Pricing decisions do this in two ways:
1. Price impacts revenue as a component of the revenue
equation:
(revenue = price x quantity sold)
2. The price level itself greatly affects the quantity sold,
through its effect on demand relationships for the
product or service.
 Complications arise because these two price effects
work in opposite directions.
 The type of product, customer demand, competitive
environment, product life-cycle stage, and product mix are
some of the factors considered in price determination.

20. 2. Price decisions
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 A successful pricing strategy is made after giving careful
consideration given to the value delivered, the cost of the
product/service bundle, the goals of the pricing strategy, and
the pricing strategies of competitors.
 The perceived value of the product bundle becomes a
ceiling on the price charged.
Figure: Upper and lower limits on pricing decisions
Perceived value is
measured by the price
the public is willing to
pay for a good or
service.

21. Pricing strategies
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1. Cost-based pricing or cost-plus pricing is a pricing
method based on adding a constant margin to the basic cost
of the individual product or service.
 This margin is intended to cover overhead and handling
costs, and leave a profit.
Cost markup of selling price ($1.00) ×1.30 (mark of 30%)
= $1.30 (selling price)
2. Competitive pricing: While cost-based pricing methods
tend to ignore market conditions, competitive-pricing
methods essentially base price on competitors’ prices.
 An agribusiness employing this strategy may simply
follow the price lead of a competitor.
3. Value-based pricing is a strategy that prices at a level at or
slightly below the estimated perceived value of the
product/service bundle.

22. Pricing strategies
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 The reference value of a product is the price of a
competing product or the closest substitute.
 This reference value forms a starting point for the
price calculation.
 The differentiation value is the perceived value of the
new product’s unique attributes.
4. Penetration pricing strategy: a product is offered at a low
price in order to gain broad market acceptance quickly.
 These strategies are used primarily to introduce new
products into a market.
 This strategy is also used in situations when a competitive
product is expected to follow quickly.
 After a new product has gained customer acceptance, the
price may be gradually increased to a more profitable
level.

23. Pricing strategies
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5. Skimming the market strategy: It is virtually the opposite
of penetration pricing.
 Skimming involves introducing a product at a high
price and making excellent profits on the sales that
are made initially.
 Then, as this relatively limited market becomes saturated,
the price is gradually lowered, bringing the price into
a range affordable to more customers.
 The appeal of this strategy is it affords the opportunity to
maximize profits on new products as quickly as possible.
 Skimming the market works best with products that are
new, unique, fairly expensive, hard to duplicate
quickly, and sold by firms that are well known and
respected in the industry.

24. Pricing strategies
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6. Discount pricing: It offers customers a reduction from
the published or list price for some specified reason.
 Volume discounts are common among agribusinesses.
 The purpose of a volume discount is to encourage
larger purchases, which reduce per unit costs and
promote more sales.
7. Psychological pricing: It involves establishing prices that
are emotionally satisfying because they sound lower than
some virtually equivalent price.
 Odd prices, such as 99 cents, sound a great deal less to
customers than $1.
8. Prestige pricing: It appeals to a high-quality, elite image.
 Many people have a strong belief that “you get what you
pay for” and tend to equate price and quality on an
emotional basis.