Marketing PP

1. FARMING AS A BUSINESS
Marketing and Market Development
TRAINING of LOAN OFFICERS
7th – 8th
April , Sun set Hotel, GULU UGANDA

2. Learning objective
At the end of this session participants will be
able to:
Define marketing and its importance in
agribusiness
Identify opportunities of linking farmers to
markets
Appreciate and compute basic marketing costs

4. What is Marketing in FaaB
Marketing is the process by which a farmer seeks to
maximise the return from farm production by
providing buyers what they want and supplying it at a
profit
The process involves – commodity or crop selection
for the market (varieties, etc.) identification of any
special field procedures, post- harvest handling
packaging transportation and storage to meet the
market requirements combined with techniques for
minimising product losses and maintaining the quality
of produce.
Sometimes the marketing process also involves value
adding through grading, packaging and/or farm

5. Elements of Marketing in FaaB
prioritising the customer: Knowing
what the customer needs or wants is
essential.
process of selection: The farmer needs to
know who to sell the product to.
promotion:
trust: Good marketing occurs when the
customers trust the farmer

6. Six Ps in FaaB
people: Who are the customers? What do they want or
need?
plan: How is the product going to reach the selected
customers? What arethe steps?
product: What product is going to be marketed? What
services (for example, a cooked product),
place: Where is the product going to be marketed?
price: What price will the product be offered on the
market for?
promotion: How are people going to be informed that
the product is available?

7. Marketing Channels and Selling Options
Farm Gate Marketing
Advantages of farm gate marketing:
no transport costs;
can be marketed by the farming family
better suited to the small-scale farmer.
Disadvantages of farm gate marketing:
Farmer must accept the local price for their produce
which may be lower;
farm may not be well located to market the product
once the local market’s demand is supplied, the farmer
has to look to more distant markets.

8. Farm Stall or Road side Marketing
Advantages of farmstall marketing:
Minimal transport costs
Larger markets can be exploited.
Farmers can take advantage of more favourable
prices.
Price fluctuations are generally small.
Disadvantages of farm stall marketing:
The quality of the produce may need to be higher as
the consumer in the market may be more demanding.
A constant supply of produce must be available to
satisfy the needs of the market.
Farmers must be flexible on pricing the produce

9. Direct Sales to Larger Buyers
This can include sales to:-Institutional buyers (School, Hospitals)
Hotels and resorts
Restaurants
Guest houses apartments
Supermarkets and stores
Advantages
An assured outlet for the farm production
Usually is a local sale so transport is not expensive
Usually a consistent demand

10. Disadvantages
One farmer may not be able to meet the
demand throughout the year
Usually a range of products is required
and the buyer may prefer to deal with only
one supplier
A high standard of product is required
Usually an informal contract which can be
varied at short notice resulting in some
production unsold

11. 3: Door to-Door Marketing (Vending)
4: Sales to Local Dealers, Packers,
Exporters
There are usually dealers in any area
willing to buy produce directly from
farmers.
These may be merchants who sell to
exporters or larger institutional buyers or
to urban markets. In some cases they may
be acting as agents for a processor

12. Urban Markets
Urban markets in larger centres mainly
provide for the marketing of vegetables
and fruit although some allow the sale of
some other products e.g. eggs
Urban markets may be:
Retail Urban Markets
Whole Sale Urban Markets

13. Marketing Channels in Uganda
ProducerProducer WholesalerWholesaler ConsumerConsumerRetailerRetailerResellerReseller
ProducerProducer ConsumerConsumer
Village market channel
ConsumerConsumer
RetailerRetailerProducerProducer Urban
wholesaler
Urban
wholesaler
Travelling
trader
Travelling
traderBrokerBrokerRural
trader
Rural
trader
Rural - urban market channel
Village market channel
Remote rural – urban market channel
Consumer
Consumer
Retailer
RetailerProducer
Producer Urban
wholesaler
Urban
wholesaler
Travelling
trader
Travelling
trader
Broker
Broker
Rural
trader
Rural
trader
Rural
trader
Rural
trader
Rural
bulking
agent
Rural
bulking
agent

14. Export Markets
Because of the complexity and risk of exporting
produce, small farmers and small groups of
farmers are advised to sell export produce
through established exporters or traders rather
than attempting to export them:
Export markets require very high quality of
product and packaging .
New packaging materials are usually
required( Cartons , poly bags etc)
.Careful and uniform grading will mean extra
post- harvest farmer costs for

15. Contract Marketing
With contract marketing the farmer markets directly to
a buyer under a contract arrangement.
This arrangement may be with:
an institutional buyer e.g. army education boarding
facilities
a major user e.g. hotels , tourist resorts, restaurants,
mining camps,
super-markets and other retail stores
merchants or dealers,

16. Communal or Co-operative Marketing
Co-operative marketing by a number of
farming families or a formal farmer
marketing group may mean markets
which an individual cannot supply can be
supplied

17. Marketing and Costs of Marketing
The costs involved with marketing
, the more complex and lengthy the
marketing chain, the higher the marketing
costs are

18. Types of Marketing Costs
These costs are incured with:
product preparation and packaging:
the movement of produce from the farm
to the farm gate or house;
all the costs associated with packaging.

20. Calculating cost of product losses

21. Calculating storage costs

22. Other costs
capital costs:
fees and commissions:
Processing costs

23. Strategies in upgrading Markets
Product-Market Growth
Matrix (Ansoff)
Existing
products
Existing
products
New
products
New
products
Market
Penetration
Market
Penetration
Product
development
Product
development
Existing
markets
Existing
markets
New
markets
New
markets
Market
development
Market
development
DiversificationDiversification
Decrease prices,
promotion
New market
segments, clients,
uses
Improved
quality products,
brands, packaging
New products, new
segments, clients

24. Types of commercial deals
for cooperatives
• Agreement: an informal type of relation in
which the exchange is conducted if the terms of
sale are acceptable to both parties.
• Alliance: a more formal type of relation in which
there is a certain level of commitment between both
parties.
• Contract: a formal relation in which a legal
document has been signed by both parties.
MOU: Written agreement between 2 parties specifying
roles and responsibilities for any transactions

25. Marketing Plan?
What is a marketing plan?

26. Purpose of a Marketing Plan
The purpose of a Marketing Plan is to:-
Define the Market
Refine the Production Plan to market
requirements
Develop a marketing strategy
Minimize risk

27. Things to consider in Marketing
Defining the Market and Commodities
An assessment based on published market information
discussions with local extension staff, farmers,
dealers and buyers of the commodity of the likely
demand and prices on offer during the year and during
any period of seasonal shortfall
Understanding Market Requirement-
Varieties,
size,
grading,
packaging,
maturity

28. Yield /Price Assumptions-
How much commodity will be available?
How much premium grade? Second
grade? Losses?
Marketing Returns and Costs Calculate
expected income and costs in marketing

29. Refining the production plan
Crop timing There should be an accurate assessment as to
when the crop will be ready for harvest.
What factors may advance or delay harvest? (rain, dry
weather?)
Can the harvest be progressive? e.g. some root crops
Can harvest be delayed?
Can harvest be advanced? e.g. by selective watering, use of
different planting cycle or varieties? Is there a cost to this?
How will this added cost affect returns?

30. Post Harvest handling-Quality Grading Packaging
and Presentation
What are the quality, grading and packaging
requirements of the specific target market?
How will grading and packing be done? What are the
costs?
Packaging – Can local materials be used? Are
new/unused packs
(cartons, bags) required? Costs?
Is there a market for the second grades? At what
price? Is this worth

31. Transport and Storage
How will commodity be moved to the
target market? Costs per kg?
Storage. Will cold storage or other storage
be required? Where / Costs
per kg?

32. Questions?

33. Assignment
Develop a Marketing Plan for your farm or
your group’s farm under the following
headings (or similar headings of your
choice.)