1. ADS 505: Agribusiness Management
Chapter 6
Marketing Management for Agribusiness
Content:
Evaluation of the marketing plan
Sales forecasting
Tool for analyzing customer needs
2. Sales Forecasting
2
Sales forecasting involves predicting sales in Dollar and
physical units as accurately as possible for a specific
period of time.
Many times this means forecasting sales for the total market,
and then determining what share of the market can be
captured with a specific product or service.
Both short-term and long-term sales forecasts are
useful for agribusiness.
Short-term forecasts, usually one season or shorter for
agribusiness firms, are useful in formulating current
operating plans.
In food firms, such forecasts may be weekly or daily
or hourly.
3. Sales Forecasting
3
Longer-range sales forecasts are important for capacity and
research and development decisions.
In general, the longer the time period forecasted, the less
accurate the forecast is likely to be.
Figure: Sales forecasting model
1. General economic forecasts
It consider broad factors that affect the total economy.
Government farm programs, inflation, the money supply,
international policy and trade agreements, exchange rates,
interest rates, population demographics, and a host of other
factors are included in such forecasts.
4. Sales Forecasting
4
A great many government and private economists spend
much time tracking economic trends and making such
projections.
Agribusiness managers watch these opinions carefully as
they formulate market plans.
Forecasts of such general economic indicators have a
fundamental role in an assessment of the market
environment as part of the SWOT analysis and in the
marketing audit.
2. Market forecasts
Market forecasts, or forecasts for specific industries or types of
products, are based on general economic forecasts and a
great deal of information about the specific industry
involved.
5. Sales Forecasting
5
Agricultural economists continually monitor changing
economic indicators that track or lead agricultural trends.
In the food business, demographic data is carefully studied
to forecast demand for specific products.
Demographic factors such as family size, age, income
level, and education tell market researchers much about
what kind and how much of specific types of food products
will be purchased in a region.
3. Specific product forecasts
The actual sales forecast for a specific product within the
firm is driven in part by the general economic forecast and
the market forecast.
6. Sales Forecasting
6
Sales of a particular firm’s low-fat yogurt are clearly
influenced by general trends in the overall economy and
trends in the market for dairy products.
However, forecasting sales of individual products or
services is complicated by the actions of competitors.
One sales forecasting method that is widely used involves
projecting sales objectively based on past trends and then
adjusting these projections subjectively to take into account
the expected economic, market, and competitive pressures.
This trend forecast , while simple, is reasonably effective in
stable market situations.
7. Tool for analyzing customer needs
7
Customer surveys
One of the best ways to learn what customers think about a
product or service is to ask the customers directly.
Agribusinesses can gain much valuable information,
which can help in formulating market plans, by
communicating directly with customers through surveys,
interviews, and informal conversations.
Market research relies heavily on surveys of various types to
track customer attitudes.
Extensive personal interviews lasting an hour or more may
provide a great information about customer purchasing
decisions, attitudes, and how the product is used.
Such in-depth interviews must be developed and
performed by trained interviewers.
They are quite expensive
8. Tool for analyzing customer needs
8
Telephone interviews have gained in popularity because
of their lower cost and the speed at which a telephone
interview study can be completed.
However, it is impossible to collect as much information by
telephone as compared to a personal interview because
telephone interviews seldom last more than 15 minutes.
It is difficult to explore many issues very deeply in such a
short period of time.
Written surveys remain a widely used method of studying
customer opinions and attitudes.
Written questionnaires can be short or long, but longer ones
usually get a much lower response rate.
A quick written survey delivered through the mail and email
is considered successful when 15 to 25 percent of the
questionnaires are completed and returned.
9. Tool for analyzing customer needs
9
Focus group techniques
A focus group interview is simply a discussion among six to
ten customers or other individuals of interest, guided by a
skilled moderator.
In many cases this discussion is recorded so careful analysis
of the comments can be made.
It is not a formal interview so much as it is an informal
discussion where people get to know each other well enough
to talk freely.
As barriers to discussion break down, participants begin
to react to each other and the conversation unfolds,
hopefully yielding much valuable information about how the
group feels about important marketing issues.
The group chosen for the interview is extremely important.
It must fairly represent the population of interest.
10. Tool for analyzing customer needs
10
Internal data analysis
Agribusiness marketers can often get so involved in
developing and implementing a marketing plan that they
have little time for detailed market analysis.
This is particularly true in smaller or local agribusinesses,
where marketing people may have a number of
responsibilities and have limited time to devote to careful
exploration of what is going on in the market.
By looking at the data a firm has on its own customers and
their transactions with the firm, a marketer can learn much
that will be helpful in developing or refining a successful
marketing strategy.
For example, Looking at sales across product lines may
point out important cross-selling opportunities.
