Aquaculture Marketing

1
Aquaculture Marketing
2
Opening Comments

• Aquacultureold in practice, new ag industries
• Rapid expansion globally
• Development plagued by marketing problems
• Main problem matching production to market needs

3
Opening Comments

• Good example catfish farming
• Farmers were well into production before
  producers and administrators gave serious
  consideration to market research and data
  collection
• demand was great, so no difficulty selling
• market analysis only really began in the 1970s

4
Opening Comments

• This dilemma was also shown by salmon and shrimp
  industries
• failure to understand the market has driven many
  producers out of business
• knowledge is necessary for locating markets for
  new and established products, for price
  determinations and for setting quality standards
• what has helped is the integration of the quality
  concept with marketing HACCP

5
Identifying Markets

• Just what is a market? Can be defined in many
  different ways
• a location Pikes Place Mkt., Seattle
• a product jumbo shrimp
• a time September - October catfish market,
  European Christmas market
• a level retail vs. wholesale

6
Part 1 The Marketing Plan (Philip Kotler)

• After setting the firms purpose and goal, the
  marketing plan is the starting point for the rest
  of planning
• most marketing plans involve single products or
  lines of products
• Topics covered current situation, opportunity
  and issue study, goals, marketing strategies,
  working plans, financial studies, needed controls

7
Part 1 The Marketing Plan (Philip Kotler)

• Current situation
• Opportunity and issue study
• Goals
• Marketing strategies
• Working plans
• Financial studies
• Needed controls

8
Current Market Situation

1. market situation background and current
   situation wrt consumer needs, likes/dislikes,
   buying trends current size and past growth of
   the total market, sales in various geographical
   areas
2. product situation recent history of sales,
   revenues for a current product
3. competitive situation size, goals, market
   share, product quality, marketing strategies
   present and future of competitors

9
Current Market Situation

• Distribution situation sales made through each
  type of middleman (brokers, wholesalers,
  retailer) in the distribution channel (later)
• Macroeconomic environment general economic
  situation has a bearing on sales (e.g.,
  population figures, economic climate, technology,
  legal issues, social issues, etc.)

10
Opportunity Analysis

1. opportunities and threats analysis main ones
   facing the product from factors outside the firm,
   ranked in order of importance
2. strength and weakness study main ones of the
   company and product from factors within the firm
3. goals financial and marketing (yearly ROI of
   25 vs. 50 increase in sales)

11
Opportunity Analysis

• marketing strategy basic approach to achieve
  goals
• target markets what does the consumer need?
• product positioning best quality or lowest
  price?
• size of product line number/types of products
  sold
• price compared to other similar ones
• distribution how, where and by whom?
• sales force size, type, quality

12
Opportunity Analysis (cont)

• marketing strategy (cont.)
• level and quality of service (more later)
• advertising amount needed, worked?
• sales promotion ditto
• rd amount, types, timing, success?
• market research amount/types

13
Opportunity Analysis (cont)

1. working plan once plan is approved, working
   plan activates marketing plan (who does what,
   etc.)
2. financial study forecast of future sales
   revenue, cost of additional product and personnel
3. controls feedback mechanisms to measure
   progress, often quarterly or monthly reports

14
Part 2 Marketing Channels

• Refers to the institutional structure in place
  for movement and exchange of goods
• from producer to consumer
• helps with record keeping to consider movement a
  channel
• really regards a flow of information
• demand creates flow
• if conditions of sale are agreed upon, flow
  through or down the channel starts

15
(No Transcript)
16
Market Channels

• Information/messages sent price, quantity,
  quality, availability
• channel connected by all types of intermediaries

17
How can you avoid all this complexity?
18
Avoiding Market Channel Complexity direct sales

• small quantity of product
• transaction does not necessitate intermediary
• farmer develops own capacity to handle shrimp

19
Levels of Market Channel Complexity

• farmer ---gt consumer
• farmer ---gt retailer ---gt consumer
• farmer ---gt wholesaler ---gt retailer ---gt
  consumer
• farmer ---gt broker ---gt processor ---gt wholesaler
  ---gt retailers ---gt consumer
• retailers hotels, restaurants, institutions

20
Market Channel and Price

• As product moves through the channel, the price
  at each stage is increased in accordance with
  value added to the product
• farmers not often pleased with discrepancy in
  price between what they received and what
  consumers pay
• difference is the marketing margin or marketing
  bill (70-80 cents on the dollar)
• margin is largely affected by time of sale and
  price paid for raw product
• other factors governmental price controls,
  producer organizations, co-ops, type of product,
  market concentration

21
Length of Channels

• Channels can be simple or long and complex
• length/complexity depend upon the volume of
  product moved, number of functions performed,
  scale of operation at each stage and the
  distribution system chosen
• organization depends upon the type of markets,
  organization of producers

22
Increasing Market Share

• Commercially-reared product is often in direct
  competition with wild-sourced
• also in competition with imports
• factors that affect sales must be isolated for
  farmers to compete
• market share is typically increased by
  monitoring product, price, promotion and place

23
Product

• The key to expanding sales is a premium product
• needs a QA/QC department or program
• manager must assure that size, taste, packaging
  and other characteristics are pleasing to
  customer prior to putting on the market
• off-flavor, color, texture and general appearance
  are key elements

24
Price

• To minimize price, the manager will keep
  processing costs at a minimum
• this insures that product price is competitive
• in a purely competitive market, price is
  determined by interaction between demand and
  supply (REM?)
• price often identified in real world by discovery
  (REM?)
• an error in pricing often has serious
  consequences

25
Promotion

• Involves programs to encourage sale and increase
  market share at any point in the channel by
  influencing potential purchases
• promotion communicates information including
  product quality, price, and benefits of the
  product to potential clients
• it acts on both the intellectual and emotional
  state of the buyer
• various examples?

26
Place

• Distribution of the product to locations used by
  customers wishing to purchase the product is a
  market function
• sometimes product is transported hundreds of
  miles from the farm
• frozen products are transported the greatest
  distances
• market share is increased by transporting product
  to places where it has previously been unavailable

27
Homework

• Think about the marketing aspects of your
  hypothetical operation
• Where are your markets? Be specific!
• What are you going to sell? Why?
• How are you going to promote your product?
• Outline your marketing channel (simple diagram)
• Due in class next week (Tuesday)