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3rd Year Sem1 Ag science > marketing > Flashcards

marketing Flashcards

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1
Q

What is a food system and what are the three broad categories??

A

Food systems encompass all people, institutions and processes that agricultural products are produced, processed and brought by consumers

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2
Q

What are the three dimensions of food systems?

A

Vertical: across varies stages of production and marketing (thing vertical integration)
Horizontal: Across all food producers (within industry)
Depth: international that is across all markets

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3
Q

What is a commodity?

A

Undifferentiated standerdized agricultural product- usually a unprocessed raw material

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4
Q

What characteristics of a commodity make for a different marketing situation than that of branded products?

A

Undifferentiated (homogenous)
Small scale production
numerous small produces
pooling of product to create large volumes

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5
Q

What should be the major objective of farmers and other participants in the food system?

A

Do what they have a competitive advantage at, within the social and environmamental constrants
Keep customers in focus

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6
Q

Difference between marketing and selling?

A

Selling focuses on the need of the seller where marketing is in the need of the buyer
Marketing in finding a need and filling it selling is creating products and then selling them

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7
Q

Define concept of consumer sovereignty

A

docterine business and marketing activity directed towards the satisfaction of consumers
Consumers excersise their sovereignty by there $ vote

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8
Q

Do consumers rule the agribusiness system? Can they change what happens?

A

To an extent yes however it depends on the circumstance.
It has been see that the consumers concerns with environmental impacts ect have resulted in some farming practices to ad badges and certifications to their products to ensure environmentally safe foods ect.

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9
Q

What are the pre-conditions for a market economy?

A 
DCFMGP
Decentralized price
Competition encouraged for efficiency
Freedom of choice
Marketing directed at consumers
Government has limited role
Private sector provide income and incentives
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10
Q

Define Functional Approach

A 
It putting the What in Who does what.
Has exchangeable function (buying and selling)
Physical Function (processing and transport)
Facilitating Function (standardization)
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11
Q

Uses of functional approach

A

Understanding the benifits and costs of the functional groups and understanding their importance and ho they cant be eliminated

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12
Q

Define Gross Domestic Product

A

It is the measure of the total economic activity of a country including all goods and services produced within a finacial year

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13
Q

Define Indusrty

A

Its a collective of firms that produced group related products from similar inputs

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14
Q

Define Firm

A

The basic unit organisation that change inputs into outputs

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15
Q

Why is competition important?

A

It improves efficiency within a company touse the available resources to the maximum production levels. (benifiting the whole society due to lower prices)

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16
Q

What does competitiveness mean to a businees and how do they acheive its?

A

Its having an advantage over a market rival. Acheived through:
Lowereinf the cost of production allowing the product to be sold at a lower price
or
Differentiating a product so it is seen as unique or having greater benefit to another product

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17
Q

Define Market Power

A

The ability to influence or remain uninfluenced by another firm

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18
Q

Define COuntervailing Power

A

Is when a firm in the relationship exercises power on you

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19
Q

Why may a firm not exercise its power?

A

Government regulations
may result in Counterveiling power
want to encourage cooperative behaviour and Trust

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20
Q

What are the main benefits to a cooperative?

A

It occours for mutual benifit

  • additional benifits to them and the consumers
  • Reduces costs
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21
Q

How to ensure not a conflicting relationship

A

Refrain from the use of coercive power
Being flexible
Development of trust

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22
Q

Every Business is formalised with detailed contracts. Discuss

A

Legal contracts are used to decrease the flexabilty. So both parties involved know what is expected of each other. It also allows more control over how everthing will be managed compared to free market interactions between buyers and sellers of the Agricultural sector.
-ve impossible to cover everything in a contract

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23
Q

What is the benefits and costs of vertical integration?

A

Benifits:
Contol over several stages
risk adversion as you are in control of the sectors

Costs:
Reduced flexibility
increased management for efficiency

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24
Q

When would vertical integration be perfered?

A

Infant industry
Keep information confidential
when one party might exploit your risks

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25
Q

What might producers get out of a horizontal alliance

A

feasible way to enter market
Cost of growth to large

Entre cooperatives to gain larger bargaining power when pooling their products

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26
Q

Why have cooperatives got a poor record

A

Hard to gain capital
difficut to punish members
Directors misuse authority to benifit themsleves
difficult to implement quality programs for pooling of products

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27
Q

Define industriliastion

A

The ability to have closer relationships with other stages in the food system

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28
Q

What are the main factors to increase industrialisation

A

Driven by food manufacturers and distributers to have more control over the quality and quantity

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29
Q

What is the Law of demand?

A

As the price gets higher the demand for the item gets lower.
As the price gets lower the demand for the product gets higher.
If everything else stays the same

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30
Q

Define Price elasticity of demand

A

PED- measures the responsiveness of Quantity demanded to a change in the price of that good

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31
Q

Define Price elasticity to supply

A

PES- the measure of the responsivness of the quality supplied to a change in price

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32
Q

What are the factors that influence PES

A

Type of industry
Short run or Long Run
Availabilty of inputs/substitues

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33
Q

Farm gate demand is generally less elastic than demand of retail. Why? Why not?

A

Farm gate are undifferentiated products therefore there is pretty much no substitue for the product so you have to buy it even if the price goes up
where as retail is branded products that usually have close substitues so if the price chnages then you might look for a cheaper option

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34
Q

Influence PED

A

Availability of sustitutes
Necesity VS luxuries
Short VS long run
Share of good in consumers budget

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35
Q

Explain Marketing Margins?

A

It is the difference between farm price and retail price

OR the consumer dollar that goes into all the firms that make the product

36
Q

Does marketing margin measure effieciency?

A

NO.

Effective competition is the main driver of effieciency in all sectors of a food system

37
Q

How should efficiency in a food marketing system be measured?

A

Operational efficiency;
the cost reducton without effecting the efficiency ratio

Price efficiency

38
Q

Is meeting consumers needs the same as creating a utility?

A

Products provide utility through their characteristics so by making a product for a specific need they are essentially making a utility.

39
Q

What would be a fair division of the consumers food dollar?

A

Ideally all parts of the food system would get an equal share so they can meet their cost of production.

including all parts of the food system

40
Q

Define absoute advantage

A

The production of a product with the least amount of inputs

41
Q

Define Comparative Advantage

A

The production of a product at the lowest cost

42
Q

How can a counrtyover come being “poor” in basic factors

A

They can use their advanced factors or their efficiency to create a product to give them comparative advantage over something else

specilize

43
Q

Why have Industrial market economies become self sufficient food producers and net exporters of most foods?

A

Industrial economies have been able to gain competitive advantage as they have increased efficiency through the use of Advance factors such as technologies and therefore focused on the production of products where they can use abundant basic factors with advanced factors

44
Q

Describe the effect of trad to producers of an exporting country and link to the concept of PRODUCER welfare

A

Trade effects world price:
So if the world price increases to above the domestic equilibrium of demand and supply this effects both consumers and producers
Consumers reduce the demand for products as there is an increase in price
Producers increase supply as they are receiving a greater price supplying less to the domestic market and exporting the rest.
This is identified in the graph below.

It shows that producer welfare is high as they are better off.
And consumer welfare is low as the rice increase restricts there buying.

45
Q

Describe the differences to Quota, Tariff and subsidy?

A

Quota is a limit of volume supplied
Tariff is a tax on imports
Subsidy is finacial aid to help countries farmers

46
Q

What are the adverse effects to barriers of trade?

A

Tariffs and Quotas:
reduce price received by the exporter
Increase production in the importing country
Reduce consumption in the importing country as consumer price increases

Subbsidies
encourages agrigultural producers to produce more efficiency as they receive a higher price eleminating the need for imports

47
Q

Define Balance of trade

A

The measure of trade performance of a country. Revenue from exports and expenditure from imports

48
Q

Define Balace of payments

A

The measure of foreign transactions by public and private entities during a specific time period.

49
Q

What are major factors effecting exchange rates

A

overseas investors
tourists
imports

50
Q

Define the 3 C’s

A

Company itself:
Consumers:
Competitors:

51
Q

Explain SWOT analysis

A

Strengths and Weaknesses of the micro environment (within the firm)

Opportunities and Threats from the macro environment (external)

52
Q

Define PEST

A

study of the dynamics in a society that impact
firms business
competitors
conumers

53
Q

What is PEST made up of

A

Political factors
Economic Factors
Social Factors
Technological Factors

54
Q

How can the macro environment be studied?

A

Aggregate nutritional intake per capita

Quantities of different food groups

55
Q

What are the 2 main chnages in food consumption pattern in a country?

A

Variety of products

Rise in economy status

56
Q

What are the three main customer concerns while buying and consuming food?

A

Nutrition: Becoming aware that to much nutrition can cause problems
High regard for Food Safety
Increase consern with environmental and ethical concerns affecting food systems

57
Q

How are the 3 main customer concerns addressed?

A

Nutrition- adding nutritional value tables so putting the responsibility into the consumers hand
Found scientific methods that ensure food safety and using used by dates
Social and environmental concerns innovate to more environmentally friendly foods and strategic advertising

58
Q

How has increased concern for nutrition and heath caused changes in the types of food sold?

A

Good nutrition= getting enough but not too much of all nutrients
Poor nutrition= not getting enough or consuming way to much

Greater concers with heart diseases and obesity so there has been switching to alternative healthier products or ‘presumed’ healthier products

increased use of multivitimans

59
Q

How has nutrition been used to promote food products?

A

Both differentiated products and basic commodities (such as pork better than a chicken breast)

60
Q

How should a company react if something goes wrong with a product to continue sales?

A

Dependant on scale of problem:

  • counter-claim or denial or campaign deflecting
  • promote image of healthy and environmentally friendly
  • FUND research to address problem but for everyone (make it look like you are trying to fix the problem)
61
Q

WHat are your concerns about the food industry and specific products?

A

Nutritional: that people need to be aware that good and bad consist of Fat, CHO minerals and proteins
Food safety: microbial, chemical, quality and shelf life
Social concerns: environment animal welfare and biotechnology

62
Q

Define Undifferentiated market

A

Focuses on a common need of consumers in a market and makes one homogenous offer to the entire market

63
Q

Define Mass Marketing

A

Focuses on a common need of consumers in a market and makes one homogenous offer to the entire market

64
Q

Define differentiated market

A

based on the principle that markets have buyers with diverse needs and should be made heterogeneous offers based on those needs

65
Q

Define Target Market

A

based on the principle that markets have buyers with diverse needs and should be made heterogeneous offers based on those needs

66
Q

Define Consumer markets

A

consists of housholds and individuals that by products (private consumption)

67
Q

Define Business Market

A

individuals and businesses that purchase products to re-sell to use in production or business oporations

68
Q

Why is market research needed for market segmentation?

A

Identify the different market segmentation to select most suitable
identify the needs of consumers
select the product, prices and marketing channels to use

69
Q

What are the 5 segments consumers are seperated using?

A 
Geographic
Demographic
Socio-cultural 
Psychographic
Behavioural
70
Q

What is the purpose of market segmentation and a product positioning?

A

Market Segmentation is the process of identification of a group of customers or consumers that have similar attitudes or behaviour towards a product

Product positioning is then used to place the product in the most ideal position fro the consumers

71
Q

Suppose you are hired by a group of beef producers who are keen to move away from producing a commodity and towards producing a differentiated product. Discuss what market research you would undertake to help them accomplish their goal.

A

secondary market desktop research
identify potential customers
Primary research (what else is available)
Consumer research (market surveys or face to face interactions)
Potential market segments and Product position

72
Q

What segments could divide a market?

A 
Age
Gender
Years of experience
Scale of farming
Type of farming
Farming Region
73
Q

What influence do product characteristics and consumers perception have on positioning of a product?

A

product itself has characteristics such as packaging and services contribute.
More specifically branding, packaging and information provides. They help differentiate a product from competitors and help influence customer perception.

74
Q

What factors may raise the need for repositioning?

A

Repositionaing is the need to change perception of product, in order to stay relevant as a result of changes by a competitor or new competitors.
Factor that influence this could be:
Generic brands entering market
change in demographic or social behaviour
Raising incomes

75
Q

One company wants to leave the market; the other company wants to stay. What action could each take to achieve their aims?

A 
Company that wants to stay-
in declining market needs to 
enhance efficiency
cut costs
improve/reposition product
focus on loyal company

Company exciting- doesnt have to do much other than exit

76
Q

Under what circumstances do you choose a generic product over a national brand?

A

Price advantage of generics over branded product but there is a higher chance that they will stick with the trusted product

77
Q

Do farmers take risks buying generic herbicides?

A

They may take risks however there is a lot at skate

78
Q

Define the concept of product lifecycle?

A

Product lifecycle refers to the relationship between the time the product has been in the market and the present market sales growth revenue

79
Q

explain the characteristics of Introduction phase of the Product lifecycle?

A

Product launch into the market
Biggest marketing strategies if AWARENESS
low sales and no profits (high risk and failure rate)

80
Q

Explain the characteristics of the Growth phase of the product lifecycle

A

The acceptance stage
market penetration and lowering prices over time
Early adopters and Early majority segments
Rapid sales growth
Brand preference and loyalty

81
Q

Explain the characteristics of the mature phase of the product lifecycle

A 
Defensive positioning with lowest price
Promotion aimed at brand loyalty
late majority segments 
intense competition
slow/low annual sales
82
Q

Explain the characteristics of the Decline phase?

A

Enhanced efficiency or exit
Increase price
loyal customer and decreased competition
declining sales

83
Q

Advertising is but one element in a promotional strategy.

Explain

A 
It is thought that advertising is the only thing used as it it one of the more heavily used methods through printed and electronic media however there are more levels of promotion that include:
Advertising
Slaes Promotion
Public relations
Personal Selling
84
Q

How is it that plain milk can be considered ‘baby food’, yet ‘Big M’ which is really just flavoured ‘baby food’, is a socially acceptable drink for teenage males

A

Its due to the promotional campaigns that differentiate and target a segment of the public.

Through both informative and persuasive forms

85
Q

What are some examples of trade promotions? What is the concept behind the trade-promotion technique as opposed to consumer-promotion techniques?

A

Trade Promotion refers to marketing directed at intermediates, that will help with product distribution.

Examples
Trade show
exhibitions
cooperatives advertisements

Trade promotion is PUSH
Consumer promotion is PULL statagey

86
Q

The key to promotability is product differentiation.

Discuss

A

Promotion can alter the demand for a product and can also differentiate a product in the ‘mind’ of the customer

3rd Year Sem1 Ag science (4 decks)

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