Innovation

Bids Adieu to Traditional Marketing Techniques to Harvest Gold from Agriculture



There is no denying the fact that agriculture is the basic source of food for billions, and farmers are the basic food producers. But, most of the time, these ‘food producers’ are forced to starve due to extreme financial losses in crop production. Although, there are many factors responsible for such losses, the absence of a concrete marketing strategy is the key factor that hampers the sales prospects of agricultural produce.

Marketing is one of the most crucial elements of a business effecting sales and productivity. It involves getting the right product at the right price, endorsed using the right media and selling at the right place. Its main motive in many businesses is to generate more sales. In fact, marketing is the life blood of every commercial activity. You have to use marketing strategies to create product awareness. And, this saying applied to agriculture segments as well. Farmers in many developing nations are stuck to old-fashioned farming as well as marketing techniques. Time has come to revolutionise the too-traditional agriculture segment.

Marketing, in agriculture, comprises all the activities involved in the transformation of commodities sold by farmers into food and fibre products purchased by consumers. The most evident feature of this transformation is a change in physical appearance of the product. Form changing activities for agricultural commodities range from washing and grading apples to processing wheat into Wheaties.

Another crucial marketing function is transportation. Agricultural commodities must somehow get from the farms where they are grown to the retail outlets where they are bought, and in some cases moving across a country or half-way around the world. Time is another important aspect of marketing. Many agricultural commodities must be harvested at a specific time, but can be stored for later use and in some cases be consumed year-round. Finally, in a specialised economy, most consumers are not producers. Marketing involves the transfer of ownership or possession from those individuals who produce, ultimately, to those individuals who consume the food or utilise the fibre.

The transformation of markets changes the value of commodities. It changes their form, place, time, and ownership as the commodities move through the marketing system. These functions not only create value but also add an associated cost. You can achieve profit if the value added by different marketing functions like processing, transportation, storage, or brokerage, exceeds the costs of performing those functions.

Marketing, to the majority of farmers, means commodity marketing. Farmers produce wheat, barley, rice, vegetables, pulses or other items. Basmati rice offered by one farmer is pretty much like any other farmer’s Basmati rice. The case is the same with wheat and other agricultural produce. Thus, the commodity, one farmer is offering, is freely interchangeable with the commodity offered for sale by other farmers. In fact, commodity markets are highly competitive because there are many buyers and sellers of the same basic commodity. Price variations among various market locations seldom exceed transportation costs and price changes over time tend to reflect seasonal or cyclical cost differences.

Commodity marketing decisions are basically restricted to decisions of timing. Farmers can price their commodities through reserved contracts or futures markets, attempting to get a price higher than market price at the time of delivery. Or they can store commodities for later sale, hoping that market prices will rise more than their costs of storage. In either case, farmers are matching with speculators, who make their living by buying, pricing, storing, or selling commodities. Most conventional farmers are not particularly good speculators. They make a living by keeping their costs competitive and, thus, being able to stay in business at competitive market prices.

Product marketing is different from commodity marketing. Commodities are alike, but products have different characteristics and marketing values. These differences may be tangible in nature (as in nutrient values of foods) or intangible (as in consumer acceptance created by brand advertising). Differentiation creates a more or less unique market for a product, taking it out of direct competition with other products.

Products may also be differentiated with respect to time. Location is another factor which differentiates the value of products. Farmers near population centres have a distinct advantage in most direct marketing strategies. Pick-your-own fruit, vegetable, or berry farms, for example, must be located within reasonable driving distance of a significant population centre. Farmers’ markets are also logical market outlets for producers of fresh produce from a fairly limited geographic area. Product handling and transportation technologies, however, have reduced the significance of location, either as an advantage or as an obstacle in marketing.

What Could Be Creative Marketing Strategies?

• Minimise middlemen profits by supplying products directly to the place of final consumption;

• Adopt proper marketing and advertising strategies to attract maximum buyers for your produce;

• Try to minimise marketing cost by applying innovative techniques to increase profit margin;

• Harvest high-yielding crops;

• Try to sell crops directly from the field to save transportation and storage costs;

• Try to diversify your potential markets;

• Tell your story to potential customers;

• Do market research; and,

• Keep records to help you make decisions.

Author

Sameer Abbas is a Freelance Business Journalist.
Reference sources: The Role of Marketing in Sustainable Agriculture, John E. Ikerd
http://grassrootsresilience.wordpress.com/2012/02/15/adopt-innovative-agricultural-practices/