Global Agricultural Marketing Management. (Marketing and Agribusiness texts - 3)

309 Pages·2006·2.06 MB·English

Table of Contents http://www.fao.org/docrep/W5973E/W5973E00.htm
Originated by: Agriculture
Department
Title: Global agricultural marketing management. (Marketing and Agribusiness
Texts - ...
Global Agricultural Marketing Management. (Marketing
and Agribusiness texts - 3)
Table of Contents
S. Carter
FOOD AND AGRICULTURE ORGANIZATION OF THE UNITED NATIONS
Rome, 1997
This publication has previously been issued as
ISBN 92-851-1004-5
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.
M-62
ISBN 92-5-104013-3
All rights 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.
© FAO 1997
This electronic document has been scanned using optical character recognition
(OCR) software and careful manual recorrection. Even if the quality of digitalisation
is high, the FAO declines all responsibility for any discrepancies that may exist
between the present document and its original printed version.
Table of Contents
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Table of Contents http://www.fao.org/docrep/W5973E/W5973E00.htm
Preface
Chapter 1: Introduction To Global Marketing
Chapter Objectives
Structure Of The Chapter
The evolution of global marketing
The international economic system
Impetus to global marketing involvement
Planning to meet the opportunities and challenges of global marketing
Framework for international analysis
Product life/market life cycle
Chapter Summary
Key Terms
Review Questions
Review Question Answers
References
Chapter 2: The Economic Environment
Chapter Objectives
Structure Of The Chapter
Overview
The global economy
Chapter Summary
Key Terms
Review Questions
Review Question Answers
References
Appendix 2A: European Union
Consumers
The changing structure of the retail trade
Changes to the wholesale trade
Packing requirements for self-service
Market overview
Barriers to trade in the EU
Appendix 2B: Southern African Development Community
Historical development
Appendix 2C: The Preferential Trade Area Of Eastern And Southern Africa
Institutions of the PTA
Chapter 3: The Cultural Environment
Chapter Objectives
Structure Of The Chapter
What is culture
The elements of culture
Chapter Summary
Key Terms
Review Questions
Review Question Answers
References
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Chapter 4: The Legal, Political/Trade Environment
Chapter Objectives
Structure Of The Chapter
Laws, rules, and standards
Issues
The political environment
The legal environment
Terms of access
Winds of change
Chapter Summary
Key Terms
Review Questions
Review Questions Answers
References
Chapter 5: Identifying Market Opportunities Through Marketing Information
Systems And Research
Chapter Objectives
Structure Of The Chapter
Elements of the information system
Sources of global information
Chapter Summary
Key Terms
Review Question
Review Question Answers
References
Chapter 6: A Competitive Analysis And Strategy
Chapter Objectives
Structure Of The Chapter
Competition
Industry analysis
Competitive strategy
Sourcing
Chapter Summary
Key Terms
Review Questions
Review Question Answers
References
Bibliography
Chapter 7: Market Entry Strategies
Chapter Objectives
Structure Of The Chapter
Entry strategies
Special features of commodity trade
Chapter Summary
Key Terms
Review Questions
Review Question Answers
References
Bibliography
Chapter 8: Product Decisions
Chapter Objectives
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Structure Of The Chapter
Basic concepts
Product design
Production decisions
Branding and trademarks
Chapter Summary
Key Terms
Review Questions
Review Question Answers
References
Bibliography
Chapter 9: Pricing And Financing
Chapter Objectives
Structure Of The Chapter
The international financial system
Pricing products
Global pricing
Financing of exports
Malawi - Export Credit Guarantee System
Pre- and Post-Shipment Support Facility
Currency transactions
Option
Concluding comments
Chapter Summary
Key Terms
Review Questions
Review Question Answers
References
Bibliography
Chapter 10: Distribution Decisions
Chapter Objectives
The Structure Of The Chapter
Channels
Channel structure
Cotton marketing
Physical distribution
East Africa horticulture marketing
Chapter Summary
Key Terms
Review Questions
Review Question Answers
References
Bibliography
Chapter 11: Promotion Decisions
Chapter Objectives
Structure Of The Chapter
The nature of global promotion
Global promotion
Campaign design
Chapter Summary
Key Terms
Review Questions
Review Question Answers
Carmel of Israel
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References
Bibliography
Chapter 12: Global Marketing, Logistics - Access And Documentation
Chapter Objectives
Structure Of The Chapter
Complexity
Terms of access
International trade
Special trade terms in export sales
Export documentation
Commercial documents
Official documents
Insurance documents
Transport documents
Financial and financing documents
Export financing
Collection arrangements
Letters of credit
Conflict of law
Chapter Summary
Key Terms
Review Questions
Review Question Answers
References
Bibliography
Chapter 13: Organising, Planning And Controlling Global Marketing Operations
Objectives Of The Chapter
Structure Of The Chapter
Agricultural systems: organisation, coordination and performance
overview
Global marketing planning
Global marketing control
Formal control methods
Informal control method
Variables influencing control
Chapter Summary
Key Terms
Review Questions
Review Question Answers
Fruit and vegetables marketing - the future
Key statistical data on horticultural marketing
References
Bibliography
Appendix 13A: Export control - The Malawi case
Glossary of marketing terms
Technical note: A short introduction to exchange traded options*
Futures and hedging trading in cotton *
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Preface http://www.fao.org/docrep/W5973E/w5973e01.htm#preface
Originated by: Agriculture
Department
Title: Global agricultural marketing management. (Marketing and Agribusiness
Texts - ...

Preface
This book, Global agricultural marketing management, was prepared by the project
Network and Centre for Agricultural Marketing Training in Eastern and Southern
Africa. The project, funded by the Government of Japan and executed by the Food
and Agriculture Organization of the United Nations, was based in Zimbabwe and ran
for five years from May 1990. Its overall objective was to strengthen agricultural
marketing training in eastern and southern Africa.
Approach and objectives
This book, is one of a series of texts prepared by the Network and Centre. It is
written in a style intended to provide both the theory concepts and practice of global
agricultural marketing management, with emphasis on the latter. In particular, it
provides:
• the theoretical framework for global agricultural marketing
management including definitions of marketing, enumerated analysis,
marketing planning, the marketing mix and marketing evaluation and
control.
• numerous case studies and examples drawn from Eastern and
Southern Africa (reflecting the project bias), but not exclusively so.
• details of the many practical procedures and transactions included in
global marketing.
The text is primarily designed as a teaching aid for marketing or agribusiness
lecturers or trainers and is suitable for post graduate students studying agricultural
marketing, agricultural economics, agribusiness, management or business studies;
undergraduates studying for the same and students studying for professional
qualifications like the Chartered Institute of Marketing diploma. It can also be used
as material for short courses, as a refresher or basic text for post graduates, for in
service training of managers and as a self learning aid.
The learning process
The learning process is assisted within the text through the provision of a number of
learning aids. These are:
• Chapter objectives; Each chapter has specific objectives which
prepare the learner for the chapter material and outline the learning
outcomes.
• Figures and tables; Each chapter is illustrated with relevant figures and
tables which illustrate, encapsulate or summarize the text.
• Examples; Each chapter contains examples which serve to illustrate
the text and reinforce understanding of the principles.
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• Exercises; Each chapter contains both worked and unworked
exercises intended to ensure the learner's understanding of both the
concepts and the use of practical techniques involved in global
marketing.
• Key terms; Key terms are included at the end of each chapter and are
intended to act as an aide-memoire.
• Index; A subject index is included at the end of the text to assist with
quick reference.
Additional texts
The text is complemented by an additional set of learning and teaching aids as
follows:
• Global Agricultural Marketing Management - Tutors Manual
This text contains all the exercises referred to in the text together with
their solutions.
• Transparency Masters
The Transparency Masters contain a series of overhead transparency
masters which include all the subject matter, examples, and their
solution in summarised or full format. These can be photocopied and
used as additional student notes.
Authors and acknowledgements
Steve Carter was FAO project director, previous to which he taught marketing at
universities in the United Kingdom, India and Africa and consulted in many
developing countries around the world.
The author, in particular, acknowledges the contribution of those who were directly
involved in the production of the texts either in providing subject matter, print
production, comments or suggestions. He is indebted to the following colleagues
and organisations:
Tapera Baidon, Zimbabwe
Orlean Chimbewa, Zimbabwe
Ellen Simbi, Zimbabwe
Edward Seidler, FAO, Rome
World Bank, Washington, DC, USA
Denise C.B. Cheng, United Kingdom
International Trade Centre UNCTAD/GATT, Geneva, Switzerland
S. Carter

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Chapter 1: Introduction To Global Marketing http://www.fao.org/docrep/W5973E/w5973e02.htm#TopOfPage
Originated by: Agriculture
Department
Title: Global agricultural marketing management. (Marketing and Agribusiness
Texts - ...

Chapter 1: Introduction To Global Marketing
Chapter Objectives
Structure Of The Chapter
The evolution of global marketing
The international economic system
Impetus to global marketing involvement
Planning to meet the opportunities and challenges of global marketing
Framework for international analysis
Product life/market life cycle
Chapter Summary
Key Terms
Review Questions
Review Question Answers
References
A look at the appropriate figures, (for example The World Development Report by
the World Bank) will indicate that the world is becoming increasingly interdependent
for its economic progress. In 1954, in the USA, for instance, imports were only one
percent of GNP, but in 1984 they had risen to 10%. In food crops, while developing
countries trade in coffee, cocoa, cotton and sugar actually declined in value during
the 1980s, developing countries as a group experienced annual export growth rates
of 4 to 11% in categories like processed fruit and vegetables, fresh processed fish
products, feed stuffs and oil seeds. High value food product exports in 1990 totalled
approximately $144 billion, the same as crude petroleum, representing 5% of world
commodity trade. In 1990, more than twenty Less Developed Countries (LDCs) had
exports of high value foods exceeding $500 million including countries like Brazil,
China, Thailand, India and Senegal.
Terms such as "global village" and "world economy" have become very fashionable.
Marketing goods and services on a global scale can happen in an "engineered" way,
but often it is as a result of good and meticulous planning. For example, in order to
stave off potential famine, the United Nation's World Food Programme (WFP) may
purchase maize from Zimbabwe and distribute it in Tanzania, Malawi and Kenya.
This "engineered" international marketing transaction may benefit Zimbabwe, without
Zimbabwe having to prospect markets. Most international transactions are not like
this. Most are clearly planned, involving meticulous attention to global social and
economic differences and/or similarities in product, price, promotion, distribution and
socio/economic/legal requirements.
Chapter Objectives
The objectives of this chapter are:
• To provide an understanding of the factors which have led to the
growth of internationalism and globalisation
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• To produce a description of the major concepts and themes on which
the subject of global marketing is based
• To describe what is involved in planning for global marketing.
Structure Of The Chapter
The chapter starts by looking at the evolution of a firm's orientation from primarily a
domestic producer to a global player. It then goes on to describe the major factors
that have led to global marketing, including both economic and social. Finally the
chapter examines the planning mechanism necessary to take account of important
differences and/or similarities when marketing goods and services internationally.
The evolution of global marketing
Whether an organisation markets its goods and services domestically or
internationally, the definition of marketing still applies. However, the scope of
marketing is broadened when the organisation decides to sell across international
boundaries, this being primarily due to the numerous other dimensions which the
organisation has to account for. For example, the organisation's language of
business may be "English", but it may have to do business in the "French language".
This not only requires a translation facility, but the French cultural conditions have to
be accounted for as well. Doing business "the French way" may be different from
doing it "the English way". This is particularly true when doing business with the
Japanese.
Let us, firstly define "Marketing" and then see how, by doing marketing across
multinational boundaries, differences, where existing, have to be accounted for.
S. Carter defines marketing as:
"The process of building lasting relationships through planning,
executing and controlling the conception, pricing, promotion and
distribution of ideas, goods and services to create mutual exchange that
satisfy individual and organisational needs and objectives".
The long held tenants of marketing are "customer value", "competitive advantage"
and "focus". This means that organisations have to study the market, develop
products or services that satisfy customer needs and wants, develop the "correct"
marketing mix and satisfy its own objectives as well as giving customer satisfaction
on a continuing basis. However, it became clear in the 1980s that this definition of
marketing was too narrow. Preoccupation with the tactical workings of the marketing
mix led to neglect of long term product development, so "Strategic Marketing" was
born. The focus was shifted from knowing everything about the customer, to
knowing the customer in a context which includes the competition, government
policy and regulations, and the broader economic, social and political macro forces
that shape the evolution of markets. In global marketing terms this means forging
alliances (relationships) or developing networks, working closely with home country
government officials and industry competitors to gain access to a target market. Also
the marketing objective has changed from one of satisfying organisational objectives
to one of "stakeholder" benefits - including employees, society, government and so
on. Profit is still essential but not an end in itself.
Strategic marketing according to Wensley (1982) has been defined as:
"Initiating, negotiating and managing acceptable exchange relationships
with key interest groups or constituencies, in the pursuit of sustainable
competitive advantage within specific markets, on the basis of long run
consumer, channel and other stakeholder franchise".
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Whether one takes the definition of "marketing" or "strategic marketing", "marketing"
must still be regarded as both a philosophy and a set of functional activities. As a
philosophy embracing customer value (or satisfaction), planning and organising
activities to meet individual and organisational objectives, marketing must be
internalised by all members of an organisation, because without satisfied customers
the organisation will eventually die. As a set of operational activities, marketing
embraces selling, advertising, transporting, market research and product
development activities to name but a few. It is important to note that marketing is not
just a philosophy or one or some of the operational activities. It is both. In planning
for marketing, the organisation has to basically decide what it is going to sell, to
which target market and with what marketing mix (product, place, promotion, price
and people). Although these tenents of marketing planning must apply anywhere,
when marketing across national boundaries, the difference between domestic and
international marketing lies almost entirely in the differences in national
environments within which the global programme is conducted and the differences in
the organisation and programmes of a firm operating simultaneously in different
national markets.
It is recognised that in the "postmodern" era of marketing, even the assumptions and
long standing tenents of marketing like the concepts of "consumer needs",
"consumer sovereignty", "target markets" and "product/market processes" are being
challenged. The emphasis is towards the emergence of the "customising consumer",
that is, the customer who takes elements of the market offerings and moulds a
customised consumption experience out of these. Even further, post modernisim,
posts that the consumer who is the consumed, the ultimate marketable image, is
also becoming liberated from the sole role of a consumer and is becoming a
producer. This reveals itself in the desire for the consumer to become part of the
marketing process and to experience immersion into "thematic settings" rather than
merely to encounter products. So in consuming food products for example, it
becomes not just a case of satisfying hunger needs, but also can be rendered as an
image - producing act. In the post modern market place the product does not project
images, it fills images. This is true in some foodstuffs. The consumption of "designer
water" or "slimming foods" is a statement of a self image, not just a product
consuming act.
Acceptance of postmodern marketing affects discussions of products, pricing,
advertising, distribution and planning. However, given the fact that this textbook is
primarily written with developing economies in mind, where the environmental
conditions, consumer sophistication and systems are not such that allow a quantum
leap to postmodernism, it is intended to mention the concept in passing. Further
discussion on the topic is available in the accompanying list of readings.
When organisations develop into global marketing organisations, they usually evolve
into this from a relatively small export base. Some firms never get any further than
the exporting stage. Marketing overseas can, therefore, be anywhere on a
continuum of "foreign" to "global". It is well to note at this stage that the words
"international", "multinational" or "global" are now rather outdated descriptions. In
fact "global" has replaced the other terms to all intents and purposes. "Foreign"
marketing means marketing in an environment different from the home base, it's
basic form being "exporting". Over time, this may evolve into an operating market
rather than a foreign market. One such example is the Preferential Trade Area (PTA)
in Eastern and Southern Africa where involved countries can trade inter-regionally
under certain common modalities. Another example is the Cold Storage Company of
Zimbabwe.
Case 1.1 Cold Storage Company Of Zimbabwe
The Cold Storage Company (CSC) of Zimbabwe, evolved in 1995, out of the Cold Storage
Commission. The latter, for many years, had been the parastatal (or nationalised company)
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