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3rd Year Sem1 Ag science > marketing > Flashcards

marketing Flashcards

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
What might producers get out of a horizontal alliance
feasible way to enter market Cost of growth to large Entre cooperatives to gain larger bargaining power when pooling their products
26
Why have cooperatives got a poor record
Hard to gain capital difficut to punish members Directors misuse authority to benifit themsleves difficult to implement quality programs for pooling of products
27
Define industriliastion
The ability to have closer relationships with other stages in the food system
28
What are the main factors to increase industrialisation
Driven by food manufacturers and distributers to have more control over the quality and quantity
29
What is the Law of demand?
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
30
Define Price elasticity of demand
PED- measures the responsiveness of Quantity demanded to a change in the price of that good
31
Define Price elasticity to supply
PES- the measure of the responsivness of the quality supplied to a change in price
32
What are the factors that influence PES
Type of industry Short run or Long Run Availabilty of inputs/substitues
33
Farm gate demand is generally less elastic than demand of retail. Why? Why not?
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
34
Influence PED
Availability of sustitutes Necesity VS luxuries Short VS long run Share of good in consumers budget
35
Explain Marketing Margins?
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
Does marketing margin measure effieciency?
NO. | Effective competition is the main driver of effieciency in all sectors of a food system
37
How should efficiency in a food marketing system be measured?
Operational efficiency; the cost reducton without effecting the efficiency ratio Price efficiency
38
Is meeting consumers needs the same as creating a utility?
Products provide utility through their characteristics so by making a product for a specific need they are essentially making a utility.
39
What would be a fair division of the consumers food dollar?
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
Define absoute advantage
The production of a product with the least amount of inputs
41
Define Comparative Advantage
The production of a product at the lowest cost
42
How can a counrtyover come being "poor" in basic factors
They can use their advanced factors or their efficiency to create a product to give them comparative advantage over something else specilize
43
Why have Industrial market economies become self sufficient food producers and net exporters of most foods?
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
Describe the effect of trad to producers of an exporting country and link to the concept of PRODUCER welfare
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
Describe the differences to Quota, Tariff and subsidy?
Quota is a limit of volume supplied Tariff is a tax on imports Subsidy is finacial aid to help countries farmers
46
What are the adverse effects to barriers of trade?
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
Define Balance of trade
The measure of trade performance of a country. Revenue from exports and expenditure from imports
48
Define Balace of payments
The measure of foreign transactions by public and private entities during a specific time period.
49
What are major factors effecting exchange rates
overseas investors tourists imports
50
Define the 3 C's
Company itself: Consumers: Competitors:
51
Explain SWOT analysis
Strengths and Weaknesses of the micro environment (within the firm) Opportunities and Threats from the macro environment (external)
52
Define PEST
study of the dynamics in a society that impact firms business competitors conumers
53
What is PEST made up of
Political factors Economic Factors Social Factors Technological Factors
54
How can the macro environment be studied?
Aggregate nutritional intake per capita | Quantities of different food groups
55
What are the 2 main chnages in food consumption pattern in a country?
Variety of products | Rise in economy status
56
What are the three main customer concerns while buying and consuming food?
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
How are the 3 main customer concerns addressed?
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
How has increased concern for nutrition and heath caused changes in the types of food sold?
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
How has nutrition been used to promote food products?
Both differentiated products and basic commodities (such as pork better than a chicken breast)
60
How should a company react if something goes wrong with a product to continue sales?
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
WHat are your concerns about the food industry and specific products?
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
Define Undifferentiated market
Focuses on a common need of consumers in a market and makes one homogenous offer to the entire market
63
Define Mass Marketing
Focuses on a common need of consumers in a market and makes one homogenous offer to the entire market
64
Define differentiated market
based on the principle that markets have buyers with diverse needs and should be made heterogeneous offers based on those needs
65
Define Target Market
based on the principle that markets have buyers with diverse needs and should be made heterogeneous offers based on those needs
66
Define Consumer markets
consists of housholds and individuals that by products (private consumption)
67
Define Business Market
individuals and businesses that purchase products to re-sell to use in production or business oporations
68
Why is market research needed for market segmentation?
Identify the different market segmentation to select most suitable identify the needs of consumers select the product, prices and marketing channels to use
69
What are the 5 segments consumers are seperated using?
``` Geographic Demographic Socio-cultural Psychographic Behavioural ```
70
What is the purpose of market segmentation and a product positioning?
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
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.
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
What segments could divide a market?
``` Age Gender Years of experience Scale of farming Type of farming Farming Region ```
73
What influence do product characteristics and consumers perception have on positioning of a product?
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
What factors may raise the need for repositioning?
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
One company wants to leave the market; the other company wants to stay. What action could each take to achieve their aims?
``` 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
Under what circumstances do you choose a generic product over a national brand?
Price advantage of generics over branded product but there is a higher chance that they will stick with the trusted product
77
Do farmers take risks buying generic herbicides?
They may take risks however there is a lot at skate
78
Define the concept of product lifecycle?
Product lifecycle refers to the relationship between the time the product has been in the market and the present market sales growth revenue
79
explain the characteristics of Introduction phase of the Product lifecycle?
Product launch into the market Biggest marketing strategies if AWARENESS low sales and no profits (high risk and failure rate)
80
Explain the characteristics of the Growth phase of the product lifecycle
The acceptance stage market penetration and lowering prices over time Early adopters and Early majority segments Rapid sales growth Brand preference and loyalty
81
Explain the characteristics of the mature phase of the product lifecycle
``` Defensive positioning with lowest price Promotion aimed at brand loyalty late majority segments intense competition slow/low annual sales ```
82
Explain the characteristics of the Decline phase?
Enhanced efficiency or exit Increase price loyal customer and decreased competition declining sales
83
Advertising is but one element in a promotional strategy. | Explain
``` 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
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
Its due to the promotional campaigns that differentiate and target a segment of the public. Through both informative and persuasive forms
85
What are some examples of trade promotions? What is the concept behind the trade-promotion technique as opposed to consumer-promotion techniques?
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
The key to promotability is product differentiation. | Discuss
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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