agri mktng mgtmnt

7/30/2019 agri mktng mgtmnt

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AGRICULTURE MARKET

STRUCTURE

By:-Dr. S. Mahapatra


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Objective of Study:

Concept and components of Market

Classification and growth of market

Market structure ,conduct and performance

Market forces and pricing decisions


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Market is a place where commodities are bought and soldwith the presence of potential buyers and sellers as acommercial activity for any product or place.

It is the area where forces of demand and supply decide theprice.

It is the aggregate demand of potential buyers for aproduct/service for potential exchange.

Components of Agril. Market-

1. Existence of good/commodity for transactions

2. Existence of buyers and sellers.

3. Business relationship between buyers and sellers.

4. Demarcation of area/place


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Dimensions and classification of Markets:-

Place of operation: Village

1. Primary near to agril. Production.

2. Secondary i.e. Wholesale at district headquarters, nearer torailway junctions.

3. Terminal market: for export

4. Seaboard: near to seashore/seaport towns. On the basis of coverage

1. Local/village markets

2. Regional markets for food grains3. National Markets: Buyers /Sellers spread at national level

4. International/Global Market


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Time Span:

1. Short period market for a day or less.

2. Periodic

3. Long period markets

4. Secular Marketing for manufactured items

Volume of transactions; Wholesale and Retail

On the basis of nature of transactions

1. Cash markets

2. Forward markets

Number of commodities1. General markets

2. Specialised markets


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On the basis of degree of competition

1. Perfect

2. Imperfect-monopoly, Monopolistic, oligopoly

On basis of nature of commodities

1. Commodity market

2. Capital market

Producing markets and consuming markets

Extent of public intervention

Regulated and unregulated

Type of population served: Urban and Rural

Market functionaries and marketing margins

1. Farmers market

2. Co-operative market

3. General market


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Growth of markets

1. Functional growth:General,specialised,sample,grade

2. Geographical:Local,regional,national,international

Factors affecting rate of market development

1. Nature of demand

2. Nature of products

3. Transportation and Communication facilities

4. Quantum of supply and demand

5. Public policies

6. Banking facilities7. Peace and security

8. Economic growth


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MARKET STRUCTURE

Shape, size and design is based on

1. functions

2. manner of market operation

3. competition, pricing and conduct of business firms

Characteristics affect traders behavior and performances

and hence an understanding of market structure is essential. Components of market structure include

1. Concentration of market power

2. Degree of product differentiation3. Conditions for entry of firms in the market

4. Flow of market information

5. Degree of integration


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Dynamics of market structure (Conduct & performance)includes

1. Market sharing and price setting policies

2. Policies for rivals

3. Policies for setting quality products

Criteria of market performance

1. Efficiency in resource use2. Existence of monopoly profits

3. Adopting technological innovations for NPD

4. Inequalities due to higher profits to middleman, poorsupport price to farmers & interproduct price parity.


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Market structure to keep pace with changes like-

1. Production pattern

2. Demand pattern

3. Costs and patterns of marketing functions

4. Technological change in Industry


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MARKET FORCES

Demand----Price vs. Quantity demanded

1. Effective demand

2. Derive demand3. Reservation of demand and price

4. Demand function

Factors affecting demand of farm products:

1. Population size and per capita income

2. Changes in tastes as per weather,religion,occupation,socialstatus,urbanisation.

3. Processing technology

4. Income distribution

5. Income elasticity differs between Rural and Urban depends onsubstitute.


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Supply of product

1. Schedule/quantity of a product required at a given time in a givenmarket : higher the price, larger is the sale quantity offered.

2. Short run: Existing production on hand.3. Intermediate run-Time required for production.

4. Long run: Expansion of production facilities.

Factors affecting supply of farm products

1. Farm productivity2. Import from outside

Factors affect domestic production :

Weather, technology, irrigation facilities, cultivable land, cropping area,

input availability, relative inter crop and input-output prices. Domesticsupply augmented by imports or restricted exports depends on :

1. Difference of domestic and international prices allowing shipmentcosts.


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2. Objective of the national policy to protect domestic producers andconsumer interests.

3. Ability of the country to resort to imports.

4. Need to earn foreign exchange by exports depends on time and countrys

situation. Current production, net exim, carryover stocks decide the quantity

available to consumers in a year.

Net availability of cereals, pulses and food grains in a country during the

year is given by =Carryover stocks+current years production +imports-exports-year ending balance.

Quantity demanded and supplied is affected by price and at equilibriumprice both buyers and sellers are satisfied.

Tabular approach ,equilibrium price and quantity of milk.

Price/lit Qty demanded Qty supply

4 10 2

12 6 6

20 2 10


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Marketing Concepts:

Balance of trade : Difference of exports and imports.

Brand and Branding : Name/sign/symbol naming a product.

Cartel: Association of firms regulate output and price by mutualagreement.

Consumer Franchise : Consumer loyalty to a firm for past experienceand promotional efforts.

Consumerism: Social force to protect consumers interest in themarket and redress the existing in the market and redress the existingimbalance in the sale transactions.

Organised consumers pressure on the marketing system protest

against unfair practices and help consumers in1. Consumer education

2. Product rating

3. Maintain liaison between Govt. and producer companies.


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Differentiated Marketing:

Farmers terms of trade

Food retailing

Free market Law of one price (LOOP)

Marketing Mix:

Product

Price

Physical distribution

Promotional Mix


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Marketing Process:

It is the sequence of events and actions co-ordinate the flow of goods andvalue addition in the marketing system.

Producer provides a marketing mix that meets consumer demand of atarget market and brings both together for the exchange of theproduct.

Exchange takes place when market offering is acceptable to theconsumer and both being benefited with a win-win situation.

Marketing Strategy:

It is a specific procedure to achieve goal and is a functional one , plan ofaction to meet the needs of an enterprise working in an environment.

Formulation of marketing strategy involves:1. Decide objectives

2. Alternate market mix options

3. Select the most profitable market mix options

4. Conditions to implement chosen market mix.


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Market Segmentation :

It is a technique to develop separate products/marketing programs toappeal to different consumer classes and method to achieve max.market response and a strategy to divide.

It enables for better attention to selected customers and offer marketmix for each segment (group of buyers having homogeneous demand)

Types of marketing strategies are product differentiation throughbranding.

Market segmentation offers following benefits:

1. Marketers are in a better position to locate and compare marketingopportunities.

2. Marketers can effectively formulate and implement marketingprograms to match the demand of that segment.

3. Marketers can make adjustments in products segments,communications.

k d b h d k


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4. Marketers can avoid competition by assessing strengths and weaknessesof competitors using resources profitably.

5. It leads to effective use of marketing resources as customer focus intarget markets.

Terms of Trade:

It is the relationship of prices of one nation to the other and rate ofexchange of exports with imports.

It is the ratio of index of agricultural to industrial prices with respect to acommon base year.

Trade Mark of a branded product is registered under the trade marksact and hence legally protected.

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