I.M. Crawford

This publication has previously been issued as
ISBN 92-851-1003-7
by the FAO Regional Office for Africa.

The designations employed and the presentation of material in this publication do not imply the expression of any opinion whatsoever on the part of the Food and Agriculture Organization of the United Nations concerning the legal status of any country, territory, city or area or of its authorities, or concerning the delimitation of its frontiers or boundaries.

ISBN 92-5-103904-6

All right reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying or otherwise, without the prior permission of the copyright owner. Applications for such permission, with a statement of the purpose and extent of the reproduction, should be addressed to the Director, Information Division, Food and Agriculture Organization of the United Nations, Viale delle Terme di Caracalla, 00100 Rome, Italy.


This textbook, Agricultural and Food Marketing Management, was prepared by staff of the Network and Centre for Agricultural Marketing Training in Eastern and Southern Africa. The Centre had the objective of strengthening agricultural marketing training in Eastern and Southern Africa. It was funded by the Government of Japan and executed by the Food and Agriculture Organization of the United Nations. Based in Zimbabwe, but also serving Kenya, Malawi, Tanzania and Zambia, the Project was able to draw upon the collective experience of eminent academics, government policy markets, experienced managers in agricultural marketing parastatals and pragmatic entrepreneurs from the private sector of agribusiness. The Project extended over a five year period, from May 1990 to August 1995, and during that time amassed a wealth of information on marketing practices with in the food and agricultural sectors with in the Sub-Saharan. In the first instance, this information was published, by the Project, as a series of proceedings, from workshops, and teaching manuals written by regional and international experts in the twin fields of food and agricultural marketing.

Marketing and Agribusiness management series

This book, is one of a series of texts prepared by the Network and Centre and has the intention of providing those charged with making marketing decisions in the food and agricultural sectors of the developing world, in general, and the tropical regions, in particular with a foundation for better understanding customer motivations and market forces. There are four textbooks within the series. These are:

These texts are primarily designed as an aid for those teaching marketing as it applies to food and agribusiness. The material is therefore relevant to students of agricultural marketing, agricultural economics, agribusiness, management and business studies They are suitable for undergraduate and postgraduate degree courses, as well as vocational and in-service short courses.

Features of the textbook

The learning process is assisted within the text through the provision of a number of learning aids. Each chapter has:

Chapter objectives-an outline of its objectives in terms of what the reader can expect to learn from reading the particular chapter.
Chapter summary-a summary which encapsulates the main points of the chapter. The summary should prove useful to students wishing to quickly revise the topics within the chapter.
Key terms-the most important terms are listed at the end of each chapter and are intended to act as an aide-memoire.
Review questions-each chapter concludes with a series of questions which readers can use to test their knowledge of the material contained with in the chapter.
References-other works upon which the author has drawn in writing this textbook are fully referenced as an aid to students seeding to extend their knowledge of a given topic.
Glossary-at the end of the textbook their is a ready reference to the most important terms and concepts. The glossary should prove especially useful to those readers who are new to the subject of marketing since it gives a brief explanation of these terms.

Additional material

The text is complemented by an additional set of learning and teaching aids. These include a tutor's manual and a set of overhead transparency masters.


The author wishes to acknowledge the contribution of Ms. Sophie Tsoka who was responsible for the design and production of the visual material both in this textbook and the accompanying overhead transparency masters. Thanks are also due to Mr. Edward Seidler and Mr. Andrew Shepherd of FAO for their critical review of earlier drafts of the text. Lastly, the author takes this opportunity to express his gratitude to Kathryn Greenhalgh, Margaret Bowler and Diane Wallace for their painstaking work in proofreading the draft manuscript.

Rome, © FAO 1997

Hyperlinks to non-FAO Internet sites do not imply any official endorsement of or responsibility for the opinions, ideas, data or products presented at these locations, or guarantee the validity of the information provided. The sole purpose of links to non-FAO sites is to indicate further information available on related topics.



Chapter 1
Agricultural And Food Marketing

Agricultural And Food Marketing
Chapter Objectives
Structure Of The Chapter
The importance of agricultural and food marketing to developing countries
The marketing concept and marketing systems
Marketing sub-systems
Marketing functions
Links between agriculture and the food industry
Agricultural and food marketing enterprises
Marketing boards in developing countries
Co-operatives in the agriculture and food sectors
Control and management of secondary co-operatives
The weaknesses of co-operatives
Selling arrangements between co-operatives and their members
Key Terms
Review Questions
Chapter References

Chapter 2
Market Liberalisation

Chapter objectives
Structure of the chapter
Economic structural adjustment programmes
Macro-economic stabilisation
The role of the state in liberalised markets
Strategies for reforming agricultural marketing parastatals
Obstacles to be overcome in commercialisation and Privatisation of agricultural marketing parastatals
Dealing with accumulated deficits
Encouraging private sector involvement in agricultural marketing
Impediments to private sector participation in agricultural markets
The impact of the macro-economic environment on private traders
Government action to improve private sector performance
Key terms
Review questions
Chapter references

Chapter 3
Marketing Strategy, Planning And Control

Chapter objectives
Structure of the chapter
Strategy, policy and planning
Strategic business units
The need for marketing planning
The process of marketing planning
Contents of the marketing plan
Monitoring, evaluating and controlling the marketing planning
Marketing controls
Marketing plan control
Efficiency control
Key Terms
Review Questions
Chapter references

Chapter 4
New Product Development

Chapter Objectives
Structure Of The Chapter
The impetus to innovation
The new product development process
The adoption process
The effect of products characteristics on the rate of adoption
Key Terms
Review Questions

Chapter 5
Buyer Behaviour

Buyer behaviour
Chapter objectives
Structure of the chapter
The influences on buyer behaviour
Exogenous influences on buyer behaviour
Endogenous influences on buyer behaviour
The consumer buying decision process
Buyer behaviour and market segmentation
Lifestyle segmentation
Organisational markets
Industrial markets
Industrial buyer characteristics
Key terms
Review questions
Chapter references

Chapter 6
Commodity Marketing

Chapter objectives
Structure of the chapter
Stages in a commodity marketing system
Grain marketing
Challenges for grain marketing systems
Livestock and meat marketing
Poultry and eggs marketing
The marketing of fresh milk
Key terms
Review questions
Chapter references

Chapter 7
Product Management

Product management
Chapter objectives
Structure of the chapter
The product
The product mix
Product line extensions
Product line deletions
Branding products
The advantages and disadvantages of branding
Branding decisions
Brand loyalty models
Homogenous first-order markov models
Higher-order markov models
The functions of packaging
Packaging technology
Recent developments in packaging
Chapter summary
Key terms
Review questions
Chapter references

Chapter 8
Pricing Decisions

Pricing decisions
Chapter objectives
Structure of the chapter
Pricing decisions
Pricing objectives
The laws of supply and demand
Sunflower oil
Elasticity of demand
Cross-price elasticity of demand
Practical problems of price theory
Cost - revenue - supply relationships
The meaning of price to consumers
Price as an indicator of quality
Pricing strategies
Cost-plus methods of price determination
Breakeven analysis
Market-oriented pricing
Psychological pricing
Geographical pricing
Administered pricing
Chapter summary
Key terms
Review questions

Chapter 9
Channel Management And Physical Distribution

Channel management and physical distribution
Chapter objectives
Structure of the chapter
Channel decisions in relation to marketing strategy
The value of middlemen
Key decisions in channel management
Types of distribution system
Marketing to middlemen
Power and conflict in distribution channels
Physical distribution
Customer service levels
Developing a customer service policy
The total distribution concept
Warehouse management
Inventory management
Calculating the economic order quantity
Transport management
Technological advances in physical distribution
Vehicle scheduling and routing
Fixed and variable routing systems
Vehicle scheduling tools
Vehicle scheduling models
Computer-based vehicle scheduling
Chapter summary
Key terms
Review questions

Chapter 10 Marketing Communications

Chapter objectives
Structure of the chapter
The nature of marketing communications
Setting marketing communication objectives
Factors influencing the communications mix
The marketing communications mix
Sales promotion
Public relations
Personal selling
Training the sales force
Change agents
Selecting the media
Establishing the promotional budget
Monitoring the effectiveness of marketing communications
Key terms
Review questions

Chapter 11
Marketing Research

Chapter objectives
Structure of the chapter
Marketing research
The market research brief
The purpose of the research
The research proposal
Step 1, review the research problem
Step 2, hypotheses generation
Step 3, select the type(s) of study
Exploratory research
Descriptive research
Causal research
Step 4, select the data gathering method
Problems with secondary sources
Primary research
Physiological measurement
Step 5, development of an analysis plan
Step 6, data collection
Step 7, performance of the analysis
Step 8, reaching conclusions and recommendations
Key terms
Review questions
Chapter references

Chapter 12
Marketing Costs And Margins

Marketing costs and margins
Objectives of the chapter
Structure of the chapter
Assessing the performance of a marketing system
Marketing efficiency and effectiveness
Operational efficiency
Pricing efficiency
Identifying marketing costs and margins
The reference products concept
Handling costs
Packaging costs
Transport costs
Storage costs
Processing costs
Capital costs
Key terms
Review questions

Glossary of marketing terms