2. LESSON 1.2
MARKETING MIX AND IMPORTANCE OF
AGRCULTURAL MARKETING
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AAE 313: Agricultural Marketing
3. Lesson objectives
• By the end of this lesson you must be able to;
– Explain the market mix and its elements.
– Outline importance to agricultural marketing
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AAE 313: Agricultural Marketing
5. • Marketing Mix is the set of controllable variables that the firm
can use to influence the buyer’s response”.
• The term “marketing mix” describes the many decisions a
business has to make in the process of bringing a product or
service to market.
• It is a model used when considering the range of activities
necessary to construct and implement a comprehensive
marketing strategy.
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Marketing Mix
6. • The market mix is the most popular way of categorizing the
elements that make up a marketing mix.
• The 4Ps, originated in the 1960s by E.J. McCarthy.
• The 4Ps are:
1. product (good or service)
2. place
3. Price
4. promotion.
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AAE 313: Agricultural Marketing
Marketing Mix
9. Product
• Product refers to the goods and services offered by the organisation.
• A product can be described as a bundle of benefits which a marketer offers
to the consumer for a price.
• Depending on the nature of the business, products can be physical goods or
services.
• The ‘product’ of professional firms are the services they offer, although they
may sometimes be delivered as reports and other outputs.
• In the marketing mix, product includes the technical features, benefits and
limitations of the product or products offered by the business.
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AAE 313: Agricultural Marketing
10. Product planning
• This considers the position of the product within the portfolio of products
offered by the organisation, and the potential contribution the product has to
make to its future success.
• Nearly all products go through the product life cycle.
• This model suggests that products pass sequentially through various stages
over time, with revenues increasing through the introduction and growth
stages, then tailing off and eventually declining as shakeout, maturity and
decline take place.
Product
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11. Price
• Price is the amount charged for a product or service.
• In the marketing mix price related decisions include
– List price
– Discounts
– Credit terms
– Payment periods
• Fixing the price of the product is a tricky job.
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AAE 313: Agricultural Marketing
12. Price
Factors that affect price of a product
– demand for a product,
– cost involved,
– consumer’s ability to pay,
– prices charged by competitors for similar products,
– government restrictions etc. have to be kept in mind while fixing the
price.
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AAE 313: Agricultural Marketing
13. • Promotion refers to all activities that are intended to inform the customer and
influence the purchasing decision.
• The range of promotional media deployed by an organisation is sometimes
referred to as the promotional mix.
• The promotion mix includes:
1) Advertising
2) Direct selling, such as face-to-face, telephone or online sales
3) Public relations
4) Merchandising
5) Sponsorship
Promotion
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14. • Decisions related to place are made with regard to location, coverage,
channels, inventories and logistics.
• It is concerned with distribution through the producer’s channels to
market.
• Distribution may involve physically moving the product to the consumer,
or to intermediaries who take responsibility for different stages of
distribution, such as agents and wholesalers.
Place
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15. • In retail industries, distribution was once only concerned with transferring
goods from the point of production to the point of sale, but the logistics
have now changed as more companies embrace online orders and home
delivery alongside their stores.
• Advancements in information and communications technology have
changed the face of distribution in the last 20 years.
• It has become apparent that retail shops are finding it increasingly difficult
to compete with the more direct channels facilitated by e-commerce.
• It is clear that certain businesses cannot expect their traditional business
model to be sustainable.
Place
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16. • In addition to the four Ps, some organisations incorporate additional
elements into their marketing mix.
• The most common of these are;
– people,
– processes
– physical evidence.
THE EXTENDED MARKETING MIX
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17. • This component of the marketing mix is especially important:
–When goods offered are considered to be homogeneous by
customers
–For services, which have to be differentiated in an effective
manner.
• Contribution of people to goals of a firm can vary from day to
day, or even during any single day.
People
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18. People
• People facilitate interactions between the business and the
customer.
• Some writers refer to each interaction between the customer
and an individual employee as a ‘moment of truth’.
• Each moment of truth is an opportunity to delight the customer
or merely satisfy the customer.
• However, it is also a moment when inappropriate behaviour,
attitudes, mood or language can drive the customer away.
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19. When considering people, the organisation has to consider matters such as:
1) The duties that should be carried out by people, and how these duties
should be allocated between them
2) The extent to which tasks can be automated, making the service
experience more effective and efficient, but without diminishing value to
the customer
3) The expectations of customers when dealing with people in the
organization
4) The extent to which competitive advantage can be obtained by
enhancing the contribution that employees may potentially make.
People
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20. • Processes are vitally important when they can impact on the effectiveness
of delivering benefits to the customer.
• Automation and the linking of processes have parts to play here.
• Successful businesses capitalise on the use of technology to undertake tasks
that are performed better by machines than people, while at the same time
asking their people to fulfil roles that only people do well.
• Many businesses have seen a revolution in the way that customer needs are
addressed by focusing on process changes.
Processes
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21. • When considering the purchase of a good, the customer may respond to
physical cues, such as;
– Packaging
– aesthetical attractiveness
• In the context of the extended marketing mix, physical evidence is
especially relevant to services.
• As stated earlier, services are intangible, so those responsible for
marketing can design and implement physical cues to which the customer
may respond positively.
Physical evidence
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22. There are many ways that this element of the mix can be used effectively,
including attention to:
1) The design of the building in which the service is delivered, and
sometimes the environment in which the building is situated
2) Interior layout, decor, signage, as well as use of contemporary floor plans
3) Uniforms
4) Design of web pages and forms
5) Business cards
6) Loyalty cards.
Physical evidence
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24. • Regardless of the type of economic system in a society, the marketing
system must perform separate functions to raise the level of economic
efficiency in the society.
• A marketing system acts to remove the barriers between consumers and
producers.
• Existence of these barriers prevents producers from meeting consumers’
needs efficiently (existence of barriers prevents the efficient exchange of
agricultural goods and services between producers and consumers).
• Thus the role of marketing is to overcome these barriers by bridging the
gap between exchange partners.
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Importance of Agricultural Marketing
25. Importance of Agricultural Marketing
• The following are some importance of Agricultural Marketing;
1. Optimization of Resource use and Output Management:
2. Increase in Farm Income
3. Widening of Markets:
4. Growth of Agro-based Industries:
5. Price Signals
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26. Importance of Agricultural Marketing
6. Adoption and Spread of New Technology
7. Employment:
8. Addition to National Income:
9. Better Living:
10. Creation of form, place, time and possession Utilities
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AAE 313: Agricultural Marketing
