Chapter 1 - Introduction
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A definition of seed marketing
The marketing mix
A definition of seed marketing
Seed marketing should aim to satisfy the farmer's demand fore reliable supply of a range of improved seed varieties of assured quality at an acceptable price.
However, the difficulties of organizing effective seed delivery systems, especially to small-scale farmers, have often been underestimated in comparison with the attention given to other seed industry activities. Historically, more attention and resources have been devoted to the physical aspects of seed production and storage than to the difficult organizational issues involved in managing sales and distribution.
Marketing is one of the most important, yet misunderstood, business activities and frequently means different things to different people. To the retailer in the agricultural sector, for example, it is selling seed along with other inputs to the farmer. To the farmer it is simply selling what he produces on his farm. However, whatever the circumstances, a well-defined sequence of events has to take place to promote the product and to put it in the right place, at the right time and at the right price for a sale to be made. Too many people think of marketing solely in terms of the advertising and selling of goods, whereas in reality marketing starts long before the goods exist and continues long after they are sold. Therefore, for the marketing process to be successful:
· the farmer consumer's needs must be satisfied;
· the seed company's objectives must be realised.
Marketing is not just advertising, distribution or sales but an integrated management process involving employees at every level of a business.
In larger companies marketing will usually form one of the four major management divisions (see Figure 1) together with Research and Development, Production, and Administration and Finance, although the structure and the degree of specialization will depend on the size of the organization. In smaller organizations one person may perform several functions or there may be just one person responsible for marketing and sales.
Marketing activities are traditionally divided on the basis of operational activities, such as sales and distribution, and marketing service activities which include advertising, promotion and market research. Some of the marketing activities that appear in Figure I are described below:
market research and analysis
involves finding out about the seed market through studying the nature of the product, where and by whom it is needed, at which times of the year and why
entails using marketing information for the purposes of planning and making sound business decisions, such as how many bags of seed will be sold and how much seed should be produced
new product development
requires the identification of possible new products (e.g. by plant breeding) or making improvements to existing products, such as by using seed treatments
involves licensing varieties and sourcing seeds from own and third-party suppliers
Figure 1 Typical company organizational chart
concentrates on developing and implementing marketing policy for a seed product or range of products
advertising, promotion and public relations
aims to create product awareness, influence farmers' buying decisions, (PR) and build up a positive perception of the company
sales order administration and
involves receiving and processing orders, allocating stock and dispatching orders, and maintaining stock records
stock control and quality assurance
involves managing the inventory for each class of seed, crop and variety, to ensure maintenance of germination and vigour
distribution and transport
entails moving the seeds from the point of production to the point of sale
sales and invoicing
the process of making the actual sale and receiving payment for it, i.e. the end result of the marketing activity
involves collating and interpreting sales information and other information as a basis for monitoring operations and planning future activities
involves after-sales service, dealing with complaints and maintaining customer loyalty
The marketing mix
In considering the needs of their customers, companies must think in terms of the product itself, the price of the product and the place where the farmer needs it, while making sure that the existence of the product is known through effective promotion. These various components are described in more detail below
The product is the focus of marketing. Although many aspects of the product are not marketing responsibilities (such as plant breeding, seed production and processing), marketing is concerned with the product's attributes and what these mean to the farmer. Such factors include quality, appearance and performance.
Price creates sales revenue and is therefore important in determining the total value of the sales made. Price is really determined by what farmers perceive as the value of seed of a particular variety. It is important to understand how farmers value seed as well as how much they are prepared to pay in relation to the benefit they expect to earn.
The place factor deals with the various methods of transporting and storing seeds and then making them available to the farmer. Getting the product to the right place at the right time depends on the distribution system. The choice of distribution method will depend on market circumstances and the nature of both the seed and the farmer.
Promotion is the business of communicating with and influencing the customer. Although the cost associated with promotion can be a significant element in the overall cost of a product, successful seed promotion increases sales so that costs are spread over a larger output.
While increased promotional activity may be a response to competitor activity or a new product launch, it is important to maintain a constant flow of messages to the consumer as well as visibility in the market place.
Mix is an appropriate word to describe the marketing process
as it is a blending of ingredients to fulfil a common purpose.
Each ingredient is vitally important and each depends upon the
other for its contribution.
Different markets will require a different balance of ingredients. The mix should comprise:
a time scale
a seed company must have a plan which indicates when it expects to achieve its objectives, both in the short, medium and long term
these will involve the overall development strategy of the company and require considerable judgment and expert) se; such decisions might involve the development of a new seed product range or a new distribution system
tactical or medium-term elements
the business environment requires constant monitoring; a company should have sufficient flexibility in order to react quickly to changing market circumstances, e.g. in response to competitor activity, which may require changes in pricing and promotional strategies or amendments to marketing plans
short-term operational elements
these involve predictable everyday decisions such as contacts with customers, organizing advertising and point of sale material, and planning distribution
Apart from those elements which are under the control of management, there are also a number of environmental factors beyond the control of management. Some of these factors are:
the competitors' strengths and weaknesses
inflation, interest rates, credit availability, commodity prices, taxation
import regulations, seed laws, consumer protection legislation
demographic & geographic
regional differences, both physical and cultural
mechanization, quality requirements, breeding advances, computerization
the appearance of new outlets, cooperative development, direct marketing
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