2. Definition of Marketing
Marketing is the process of interesting potential customers and clients
in your products and/or services. Susan Ward , About.com Guide
The following definition was approved by the American Marketing
Association Board of Directors:
Marketing is the activity, set of institutions, and processes for creating,
communicating, delivering, and exchanging offerings that have value
for customers, clients, partners, and society at large. (Approved October
2007)
3. Why marketing?
It provides the mechanism whereby producers exchange their livestock
and livestock products for cash.
The cash is used for acquiring goods and services which they do not
produce themselves, in order to satisfy a variety of needs ranging from
food items, clothing, medication and schooling to the purchase of
breeding stock and other production inputs and supplies.
Both input and output prices fluctuate over time.
4. Livestock marketing in detail
a) It involves two components:
Activities associated with the physical movement of and transportation of
livestock and pricing or placing a value on livestock.
• Direct marketing involves buyers who purchase livestock directly
from a farmer rather than through an intermediate market or party.
• Indirect marketing situations involve the movement of livestock
with the service of an intermediary. (middle men). The intermediary
expects to receive a commission or percentage in exchange for his or
her efforts to facilitate the sale.
5. Livestock marketing in detail
b) Some factors involved in marketing small livestock
Customer preference – male or female; if male, do they prefer intact
(with testicles) or castrated males.
Goat or sheep age preferred by customers
Customers’ preference on dead or live animals and how and where the
animal is slaughtered.
6. Livestock marketing in detail
c) Challenges
In most African countries there is a severe paucity of time series data
on livestock prices as well as on the performance and efficiency of the
livestock marketing system.
Ironically, livestock marketing happens to be a favourite sector, where
African governments choose to intervene in a variety of ways.
These interventions range from outright fixing of wholesale and retail
meat (e.g. Benin, Ethiopia, Togo) to monopolising the export market
(e.g. Botswana, Kenya). yet in many instances policy decisions on
livestock marketing are taken in the absence of vital information on
how they affect livestock producers, traders, slaughter-houses,
butchers and consumers.
7. Types of markets
Marketing system
Definition:
A market system is any systematic process enabling many market
players to bid and ask: helping bidders and sellers interact and make
deals. It is not just the price mechanism but the entire system of
regulation, qualification, credentials, reputations and clearing that
surrounds that mechanism and makes it operate in a social context.[1]
Campbell R. McConnell, Stanley L. Brue (2005). Economics: Principles,
Problems, and Policies. McGraw-Hill Professional. ISBN 0072819359.
8. Types of markets
a) A livestock marketing system model
Livestock markets can easily be differentiated by the type of sellers and
buyers operating in the market and the purpose for which livestock are
purchased.
The bottom part shows the flow of livestock from producers to
secondary (regional) and terminal (national) markets through one or
more primary collection markets.
9. Types of markets
Table 1 summarises these attributes for three types of livestock markets
(Ariza Nino et al, 1980).
Type of market Main sellers Main buyers Purpose of purchase
1. Primary collection Producers Other producers For stock replacement or
markets fattening
Local butchers Slaughter
Traders Collection for resale in larger
regional markets
2. Secondary Traders Local butchers Slaughter
distribution markets
Traders For resale in terminal markets
3. Terminal markets Traders Local slaughter Slaughter
houses
Traders Export
10. Types of markets
b) Factors that influence the livestock marketing system
I. The cash needs of producers, the strength of demand for their livestock, and
pastoralists' expectation of the nature and length of the dry and wet seasons
influence the volume of the different species of livestock on offer at any time.
The higher the cash needs of the pastoralists the greater the volume of livestock on offer
and the greater the volume on offer without market demands the lower the prices.
The stronger the effective market demand as expressed by high prices, the greater the
volume of livestock supplied.
Anticipation and occurrence of prolonged dry seasons induce more sales.
The poor condition of the animals plus the greater numbers supplied during such times
depress livestock prices.
11. Factors that influence the livestock
marketing system
ii. Government policy through fiscal, regulatory and development intervention affects
the volume, flow and prices of livestock in the marketing system.
Favourable fiscal policies that encourage livestock production and reduce costs to
producers increase the supply of livestock, e.g. subsidies, and price stabilisation policies
On the other hand taxes and levies of all kinds tend to restrict the volume supplied.
The control of epidemic diseases, the proper development of range areas and the
development of trek routes and livestock market facilities tend to increase the volume
supplied and reduce marketing costs.
In general government monopolistic tendencies and the fixing of artificially low prices
stifle market supply and demand.
12. Factors that influence the livestock
marketing system
III. Market demand as expressed by the volume and prices buyers are
willing to pay for livestock influences the behaviour of the markets
at all links in the system.
The less efficient the market the less responsive will supply be to
changes in market demand.
The efficiency of the market as reflected by the marketing costs of the
system and to what extent price changes are transmitted through the
marketing system strongly influence the operation of the markets
13. Livestock marketing options
Dutch auction
An auction where a property is offered at a price beyond its value
and the price is lowered gradually until someone makes a bid.
A Dutch auction is a type of auction where the auctioneer
begins with a high asking price which is lowered until some
participant is willing to accept the auctioneer's price, or a
predetermined reserve price (the seller's minimum acceptable
price) is reached. The winning participant pays the last
announced price. This is also known as a "clock auction" or an
open-outcry descending-price auction.
14. Livestock marketing options
Reverse auction
This sales term describes a scenario whereby buyers post their need for a
product or service, and suppliers bid to fulfill that need. As opposed to an
auction, prices only go down.
Rationing
Method for limiting the purchase or usage of an item when the quantity
demanded of the item exceeds the quantity available at a specific price.
Regulated Market
A regulated market or controlled market, is the provision of goods or
services that is regulated by a government appointed body. The regulation
may cover the terms and conditions of supplying the goods and services
and in particular the price allowed to be charged and/or to whom they are
distributed.
15. Livestock marketing options
Black Market
A 'black market' is a market in goods or services
which operates outside the formal one(s) supported by
established state power.
Barron’s Marketing Dictionary
16. Livestock Marketing Information
Systems
Definition
A system that analyzes and assesses marketing information, gathered
continuously from sources inside and outside an organization. Timely
marketing information provides basis for decisions such as product
development or improvement, pricing, packaging, distribution, media
selection, and promotion.
