FOR CLASSROOM DISCUSSIONS ONLY 0

MODULE 1

AGRICULTURAL MARKETING

Prepared by :

REYNANTE P BLAS

Faculty, CMBT

AGRICULTURAL MARKETING |
 1

FOREWORD

This module on Agricultural Marketing was made for pandemic virtual class only
since face to face modality of learning is apparently not permitted by the government for the
time being, This module 1 focused on four learning unit. For each unit, an online activity will
be accomplished by the students.

This module will focused on the Introduction to Agricultural Marketing, with

application of the marketing mix in dealing with production and distribution of input and
output of agricultural commodities. A discussion/presentation of cases focusing on the
current trends in agricultural marketing at the end of the term is a requisite for the course.

AGRICULTURAL MARKETING |
 2

TABLE OF CONTENT

Page

Foreword 2

Unit I Agricultural Marketing 4

Functionaries in Agricultural Marketing 5

Agricultural Marketing Explained 6

Functions of Agricultural Marketing 7

Importance of Agricultural Marketing 8

Unit II The Marketing Concept 11

Essential Steps for a Successful Strategic Marketing Process 13

The Role of Marketing 18

Marketing Mix 21

Marketing Strategies for Agriculture Products 22

Steps in Developing An Efficient Marketing Plan 27

UNIT III - Target Market 30

Agricultural Products 31
Legal and Economic Definition of Agricultural Products 33
UNIT IV - Promotion of Agricultural Products 36
Promotion Item and Giveaways 38

UNIT V - CURRENT PHILIPPINE AGRIBUSINESS INDUSTRY 40

References 48

AGRICULTURAL MARKETING |
 3

UNIT I - AGRICULTURAL MARKETING

At the end of this unit, you are expected to:

1. Define agricultural marketing;

2. Familiarized with the functions and importance of agricultural marketing;
3. Solved agricultural marketing problems of developing countries.

Without a doubt, the Philippine is an agro-industrial sector and has been one of the
most important components of the economy. We have seen the ultimate importance of the
agriculture industry during the recent lockdown in the Philippines (March-June 2020) as this
industry remain standing and economically running where others like supermalls,
manufacturing were temporarily shutdown by the state. The increasing trend of agricultural
production has brought new challenges in terms of finding market for the surplus. There is
also a need to respond to the challenges and opportunities, that the global markets offer in
the liberalized trade. To benefit the farming community from the new global market access
opportunities, the internal agricultural marketing system in the country needs to be
integrated and strengthened. Agriculture and agricultural marketing need to be re-oriented
to respond to the market needs and consumer preferences.

Agricultural marketing consist of two major concepts viz., “agriculture” and “marketing”.
The first concept agriculture aims at producing the agro food products with the use of natural
factors for the welfare of human. It is fully depends on natural processing. The second concept
marketing refers to the activities that are done by the business organizations to promote their
products and services to their targeted customers. In marketing the targeted customers can
be attracted and maintained by creating strong customer values for them in the organization.
It is possible through, effective market survey, market trending, better customer service and
satisfaction, customer focus and continuous follow up. The concept agricultural marketing
includes many activities starts from production process till its retailing. The activities
involved are production planning, cropping and harvesting, warehousing, grading,
transportation and final distribution. There are varieties of agro products which are
produced with dual purpose of domestic consumption as well as exporting. In the chain of
agricultural marketing number connecting links such as farmers, suppliers, functionaries,
importers, exporters, external beneficiaries and customers are involved.

AGRICULTURAL MARKETING |
 4

DEFINITION OF AGRICULTURAL MARKETING

According to the National Commission on Agriculture (XII Report, 1976),

agricultural marketing is a process which starts with a decision to produce a saleable farm
commodity, and it involves all the aspects of market structure or system, both functional and
institutional assembling, grading, storage, transportation and distribution.

FUNCTIONARIES IN AGRICULTURAL MARKETING

Functionaries’ involvement in agricultural marketing has categorized under three

market stages. They are functionaries in:

• Primary market

• Secondary market

• Terminal or Export market

Primary market functionaries: The producer/farmer/cultivator, pre-harvest

contractor, itinerary merchants, transport agents. Secondary market functionaries: Financial
agents and processing agents are involved in secondary market in addition to primary market
functionaries. Terminal or Export market functionaries: in addition to primary and secondary
market functionaries’ commercial analyst and shipping agents are also involved in this
market stage and, based on technical and economic considerations, and includes pre- and
post-harvest operations,

Marketing.

Marketing means working with markets, which in turn means attempting to actualize
potential exchanges for the satisfying human needs and wants. Thus we return to our
definition of marketing as human activity directed at satisfying needs and wants through
exchange processes.

Farm’s marketing.

Activities related to the marketing and production of agricultural products produced

by an organization or individual farmer. Such activities in the process of farm’s marketing
include packaging, selection of brands name, promotional strategies, price policies,
marketing channels and other policies.

AGRICULTURAL MARKETING |
 5

Agricultural Marketing Explained

Agricultural marketing generally means the marketing of agricultural products to the

first handler. In macro (social) perspective, is the performance of all business activities
involved in the forward flow of food and fiber from farm producers to consumers. It includes
all the activities associated with agricultural production and with food, feed, and fiber
assembly, processing, and distribution to final consumers, including analyses of consumer’s
needs, motivations, and purchasing and consumption behavior.

Agricultural marketing circle.

It consists of First circle. Refers to the final consumer or targeted customer.

Second circle. Factors that can be controlled known as marketing mix (product, price,
place, and promotion).

Third circle. Environmental factors that cannot be controlled (political and legal,
economic, law and regulation, social & culture, technologies, & demographic).

Agribusiness marketing has come to mean the marketing operations from the first
handler to the final consumer-beginning with suppliers to farmers and covering producing,
processing, and marketing to the final consumer.

Agro marketing is a complex system that requires regulation and management. An

agricultural enterprise is not self-supporting, so there is a constant exchange of resources
and information between it and the surrounding marketing environment. The very fact of its
existence and further survival depend on the influence of the environment. To continue its

AGRICULTURAL MARKETING |
 6

operation, the agricultural enterprise is forced, on the one hand, to adapt to changes in the
external marketing environment, and on the other hand to influence it by virtue of its
capabilities by developing various agricultural marketing campaigns. The agro marketing
system includes a set of the most significant market relations and information flows that
connect the agricultural enterprise with the markets for its products.

FUNCTIONS OF AGRICULTURAL MARKETING

The major marketing functions involved in agricultural marketing are:

• Concentration

• Grading

• Processing

• Warehousing

• Packaging

• Distribution

Concentration: The foremost function to be performed in agricultural marketing is to

collects the agro produce ready to sale in a central place for economic buying purpose.

Grading of Agro Produce:

Grading is the process of segregating the huge amount produce into different
categories on the basis of variety, quality, size, etc. This can help to establish standards for
those produce.

Processing: It is the stage where the farm products are transformed into consumable
products. For example: paddy into rice processing.

Warehousing: Warehousing is storing the products from production till its final
consumption. This helps to preserve the products from spoil, contamination, etc.

Packaging: Packaging of products is another essential function for easy handling,

preventing from deterioration, attracts customers, etc.

Distribution: The last function performed in all marketing is distribution of products

from the place of warehouse to retail outlet for final consumption.

AGRICULTURAL MARKETING |
 7

IMPORTANCE OF AGRICULTURAL MARKETING

• Break the vicious circle of poverty

• Optimum utilization of agricultural resources

• Enhance the standard of living

• Basis of employment opportunity

• Basis of industrial development

• Creation of utilization

• Basis of foreign trade

• Source of national revenue

• Create the environment for investment

PROBLEMS IN AGRICULTURAL MARKETING IN DEVELOPING COUNTRIES

Product Quality: Many of the farmers are not aware of the need for quality seeds and
fertilizers. The poor quality seeds and fertilizers used in land will result in poor product
quality.

Market Information: The literacy rate of farmers in developing countries are

comparably low than the developed countries. The farmers of developing countries may not
have the updated knowledge of the market trend and activities. Hence they may unable to
achieve the real price of their product.

Product Quantity: In some places improper measuring of products are still in

practice. This will result in loss for the farmers at the time of buying or selling of agro produce.

Functionaries Participation: The functionaries in the marketing process hold a

major share of profit in the form of commission.

Lack of Transportation Facility: Many of the rural areas don’t have proper road
facility. This creates barrier in transporting the agro produce to the market place. Inadequate
Storage Facility: The inadequacy of storage facility may leads to unwanted wastage of
products.

AGRICULTURAL MARKETING |
 8

Activity 1-1

Name: ______________________________________ Course/Year/Section ________________

Direction: Answer the following questions on the space provided for. Use separate sheets if
so needed.

1. Briefly define agricultural marketing. Enumerate (at least 20) common agricultural
commodities you and your family consume?
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
2. What are common agricultural inputs farmers used for their production?
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
3. What are the functions of agricultural marketing? Cite real life example for each
functions.
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________

AGRICULTURAL MARKETING |
 9

Activity 1-2
Name: ______________________________________ Course/Year/Section ________________
Case study 1.1:

In a move to halt runaway prices of basic commodities and also curb double digit
inflation in Ethiopia, the Horn of Africa country‟s government moved to set a price ceiling for
18 types of basic commodities in the first week of January, 2011. The Ministry of Trade and
Industry (MoT) of Ethiopia has categorized 20 domestic items that will be covered in the
controlling mechanism. From these are: edible oil, bread, pasta and macaroni, meat, sugar,
tea leaf, bananas, oranges, and wheat flour are some of the main processed and unprocessed
agricultural commodities. From imported items: edible oil, pasta and macaroni, powder milk,
rice and sugar have been included in the imported items that will be controlled. MoT also said
the price of the items, described above, cannot be adjusted without prior knowledge of the
Trade Bureau of the Regions and Ministry of Trade. Any business person shall display the
price of their goods and services by posting such a list in a conspicuous place in his business
premises or affecting price tags on the goods in a manner that includes custom duties, taxes
and other lawful fees.

(Source: http://www.capitalethiopia.com)
Task 1.1: Based on the above case study, discuss the following:
1. What is the justification for such price control?
2. What would be its effect on producers, traders, and consumers?
3. What would be its overall implication in improving/distorting the market?
4. Would such government intervention sustainable?
5. What alternative solution do you suggest to achieve the same objective?

AGRICULTURAL MARKETING |
 10

UNIT II - THE MARKETING CONCEPT

At the end of this unit, you are expected to:

1. Learned the five marketing concept, strategies and marketing mix
2. Come up with your own marketing plan

What philosophy should guide a company marketing and selling efforts? What
relative weights should be given to the interests of the organization, the customers, and
society? These interest often clash, however, an organization’s marketing and selling
activities should be carried out under a well-thought-out philosophy of efficiency,
effectiveness, and socially responsibility.

Five orientations (philosophical concepts to the marketplace have guided and

continue to guide organizational activities:

1. The Production Concept

2. The Product Concept
3. The Selling Concept
4. The Marketing Concept
5. The Societal Marketing Concept

The Five Concepts Described

The Production Concept. This concept is the oldest of the concepts in business. It
holds that consumers will prefer products that are widely available and
inexpensive. Managers focusing on this concept concentrate on achieving high production
efficiency, low costs, and mass distribution. They assume that consumers are primarily
interested in product availability and low prices. This orientation makes sense in developing
countries, where consumers are more interested in obtaining the product than in its features.
The Product Concept. This orientation holds that consumers will favor those products
that offer the most quality, performance, or innovative features. Managers focusing on this
concept concentrate on making superior products and improving them over time. They
assume that buyers admire well-made products and can appraise quality and
performance. However, these managers are sometimes caught up in a love affair with their

AGRICULTURAL MARKETING |
 11

product and do not realize what the market needs. Management might commit the “better-
mousetrap” fallacy, believing that a better mousetrap will lead people to beat a path to its
door.

The Selling Concept. This is another common business orientation. It holds that
consumers and businesses, if left alone, will ordinarily not buy enough of the selling
company’s products. The organization must, therefore, undertake an aggressive selling and
promotion effort. This concept assumes that consumers typically sho9w buyi8ng inertia or
resistance and must be coaxed into buying. It also assumes that the company has a whole
battery of effective selling and promotional tools to stimulate more buying. Most firms
practice the selling concept when they have overcapacity. Their aim is to sell what they make
rather than make what the market wants.

The Marketing Concept. This is a business philosophy that challenges the above three
business orientations. Its central tenets crystallized in the 1950s. It holds that the key to
achieving its organizational goals (goals of the selling company) consists of the company
being more effective than competitors in creating, delivering, and communicating customer
value to its selected target customers. The marketing concept rests on four pillars: target
market, customer needs, integrated marketing and profitability.

Distinctions between the Sales Concept and the Marketing Concept:

1. The Sales Concept focuses on the needs of the seller. The Marketing Concept focuses
on the needs of the buyer.

2. The Sales Concept is preoccupied with the seller’s need to convert his/her product into
cash. The Marketing Concept is preoccupied with the idea of satisfying the needs of the
customer by means of the product as a solution to the customer’s problem (needs).

The Marketing Concept represents the major change in today’s company orientation
that provides the foundation to achieve competitive advantage. This philosophy is the
foundation of consultative selling.

AGRICULTURAL MARKETING |
 12

The Marketing Concept has evolved into a fifth and more refined company
orientation: The Societal Marketing Concept. This concept is more theoretical and will
undoubtedly influence future forms of marketing and selling approaches.

The Societal Marketing Concept. This concept holds that the organization’s task is to
determine the needs, wants, and interests of target markets and to deliver the desired
satisfactions more effectively and efficiently than competitors (this is the original Marketing
Concept). Additionally, it holds that this all must be done in a way that preserves or enhances
the consumer’s and the society’s well-being.

This orientation arose as some questioned whether the Marketing Concept is an

appropriate philosophy in an age of environmental deterioration, resource shortages,
explosive population growth, world hunger and poverty, and neglected social services.
Are companies that do an excellent job of satisfying consumer wants necessarily acting in the
best long-run interests of consumers and society?

The marketing concept possibly sidesteps the potential conflicts among consumer
wants, consumer interests, and long-run societal welfare. Just consider:
The fast-food hamburger industry offers tasty but unhealthy food. The hamburgers have a high
fat content, and the restaurants promote fries and pies, two products high in starch and fat. The
products are wrapped in convenient packaging, which leads to much waste. In satisfying
consumer wants, these restaurants may be hurting consumer health and causing environmental
problems.

5 Essential Steps for a Successful Strategic Marketing Process

The strategic marketing process is a deliberate series of steps to help you identify and reach
your goals. Even more, you’ll discover what your customers want and develop products that
meet those needs. Here are the steps to a successful strategic marketing process.

1. Mission
2. Situation Analysis
3. Marketing Strategy/Planning
4. Marketing Mix

AGRICULTURAL MARKETING |
 13

5. Implementation and Control

Strategic marketing planning involves setting goals and objectives, analyzing

internal and external business factors, product planning, implementation, and tracking your
progress. Consider the example of Apple, winner of the CMO Survey Award for Marketing
Excellence for the past seven years. Here’s an example of the strategic marketing plan for
one of the most successful companies in the world.

AGRICULTURAL MARKETING |
 14

Mission: Apple is dedicated to making innovative, high-quality products.

Situation Analysis: Apple’s competitive advantage is driven by its commitment to

understanding customer needs, focusing on the products that are core to its mission, and
fostering a collaborative work culture.

AGRICULTURAL MARKETING |
 15

Marketing Strategy: Apple usually is first to the marketplace with new products and the
company relies on brand loyalty from existing customers as a strategy when launching new
products and services.

Marketing Mix: While Apple offers a range of products, it values premium pricing and relies
on strict guidelines for distribution.

Implementation and Control: Each Apple product complements the others and work within
the same ecosystem, so customers tend to stay with the brand, creating loyal consumers.

The strategic marketing process puts all the pieces together so that everything you do
contributes to the success of your business. Rather than executing haphazard activities and
ideas, developing a solid plan that weaves goals and tactics into a seamless experience is
essential. You can follow these steps to create products and services that will delight your
customers and beat out your competitors.

Step One: Mission

First, identify and understand the company’s mission. Maybe it’s written down and
promoted throughout the organization. If not, talk to stakeholders to find out why your
company exists. A mission statement explains why a company is in business and how it can
benefit consumers. Sometimes, the mission statement is aspirational, motivating staff and
inspiring customers. Or it is simply a straightforward statement about who you are. Either
way, you can’t plan a marketing strategy without knowing clearly what business you are in
and why.

Here are some example mission statements:

IKEA: At IKEA, our vision is to create a better everyday life for many people. Our business
idea supports this vision by offering a wide range of well-designed, functional home
furnishing products at prices so low that as many people as possible will be able to afford
them.

Universal Health Services: To provide superior quality healthcare services that:

AGRICULTURAL MARKETING |
 16

PATIENTS recommend to family and friends, PHYSICIANS prefer for their patients,
PURCHASERS select for their clients, EMPLOYEES are proud of, and INVESTORS seek for
long-term returns.

Unlike the other steps in the planning process, senior leaders or the board of directors
typically develop the mission statement and corporate objectives. Your role is to identify
those objectives in the planning process to ensure that your efforts stay aligned with
corporate leadership.

The mission statement is a core message that guides and influences your marketing
strategy. Questions to ask when evaluating the mission:

 Why is your company in business?

 What is the purpose of your business?
 What is the strategic influence for your business?
 What is the desired public perception for your business?
 How does your mission statement clarify your strategy?
 How does your mission statement unify your team?

Step Two: Situation Analysis

The second step of the strategic marketing process is to evaluate internal and external factors
that affect your business and market. Your analysis will illuminate your strengths and the
challenges you face — either with internal resources or with external competition in the
marketplace. Situation analysis provides a clear, objective view of the health of your business,
your current and prospective customers, industry trends, and your company’s position in the
marketplace.

There are several methods to conduct this analysis. A typical analysis is called a SWOT
analysis: strengths, weaknesses, opportunities, and threats.

Strengths and weaknesses are internal factors, under your company’s control. What do you
do well? What needs to be better? Opportunities and threats are external factors, such as

AGRICULTURAL MARKETING |
 17

interest rates or a new competitor in the market. Here are some questions that can help you
identify internal and external factors:

 Strengths: What do you do well? What are the factors that you control? What is your
competitive advantage? How are your products and services superior to others in the
marketplace?
 Weakness: Where are you underperforming? What is limiting your ability to
succeed? Where do limited resources affect your success?
 Opportunities: What are untapped markets? Where is the potential for new
business? Can you take advantage of any market trends?
 Threats: What are the obstacles? Which external factors (political, technological, and
economic) can cause a problem?

The Role of Marketing

Marketing, in agriculture, includes all the various activities involved in the

transformation of commodities sold by farmers into food and fiber products purchased by
consumers. The most obvious aspect of this transformation is a change in physical
appearance or form. Form changing activities for agricultural commodities range from
washing and grading apples to processing wheat into Wheaties. Another important
marketing function is transportation. Agricultural commodities must somehow get from the
farms where they are grown to the retail outlets where they are bought, in some cases moving
across a country or half-way around the world. Time is another important aspect of
marketing. Many agricultural commodities must be harvested at a specific time, but can be
stored for later use and in some cases be consumed year-round. Finally, in a specialized
economy, most consumers are not producers. Marketing involves the transfer of ownership
or possession from those individuals who produce, ultimately, to those individuals who
consume the food or utilize the fiber.

Market transformations change the value of commodities by changing their form,

place, time, and ownership as they move through the marketing system. Each of these
functions creates value but also adds an associated cost. Profits result whenever the value
added by marketing functions such as processing, transportation, storage, or brokerage, is
greater than the costs of performing those functions. These basic principles of marketing may

AGRICULTURAL MARKETING |
 18

seem simplistic; however, they are the fundamental concepts upon which vertical expansion
of farming into marketing must be built.

Marketing, to most farmers, means commodity marketing. They produce

commodities such as corn, wheat, hogs, or cattle. One farmer's No. 2 grade yellow corn is
pretty much like any other farmer's No. 2 yellow corn. One cattle feeder's 1100 lb. USDA
choice steers are a lot like steers of a similar weight and grade from any other feed lot. Thus,
the commodities one farmer has to offer for sale are freely interchangeable with commodities
offered for sale by many other farmers, oftentimes including farmers on another continent.
Commodity markets tend to be highly competitive because there are many buyers and sellers
of the same basic commodity. Price differences among different market locations rarely
exceed transportation costs and price changes over time tend to reflect seasonal or cyclical
cost differences.

Commodity marketing decisions are primarily limited to decisions of timing. Farmers

can forward price their commodities through private contracts or futures markets,
attempting to get a price higher than market price at time of delivery. Or they can store
commodities for later sale, hoping that market prices will rise more than their costs of
storage. In either case, farmers are matching wits with speculators who make their living
buying, pricing, storing, or selling commodities. Most conventional farmers are not
particularly good speculators. They make a living by keeping their costs competitive and,
thus, being able to stay in business at competitive market prices.

Product marketing is different from commodity marketing. Commodities are alike,

but products are different. In marketing jargon, products have distinct quality characteristics
and, thus, distinct market values. These differences may be tangible in nature (as in nutrient
values of foods) or intangible (as in consumer acceptance created by brand advertising).
Differentiation creates a more or less unique market for a product, taking it out of direct
competition with other products. The greater the differentiation, the greater the potential for
profits. Products that have few good substitutes may command a substantial price premium
over less acceptable alternatives. However, consumers will not pay much more for a product
that has many good substitutes than they will pay for the substitutes.

AGRICULTURAL MARKETING |
 19

Products may be differentiated by anything that affects value. Processing, for

example, changes the form of raw commodities. Some processing activities, cattle slaughter
for example, result in a different form of generic commodity, such as choice beef. In other
cases, however, processors are able to transform commodities into distinct products such
wines from grapes. A supermarket may stock wines from a number of different wineries
because the wines are perceived to be different by a sufficient number of wine drinkers to
create profitable markets. Processing is only one means of changing the form of a commodity.
Fruits sorted for uniformity of size and color, for example, may sell for a premium over the
same fruit sold unsorted.

Products may also be differentiated with respect to time. In mid-winter, local

greenhouse tomatoes in the Midwest may command a substantial premium over tomatoes
from California or Mexico. However, tomatoes from those same greenhouses may have no
advantage over local vine-ripe tomatoes in mid-summer. Winter price premiums reflect the
lack of good substitutes at that particular time. Vine-ripe tomatoes out-of-season are a
differentiated product, but in-season tomatoes are a commodity. An ability to provide
products on time, continuously over time, may also differentiate one farmer's products from
the others.

Location is another factor which differentiates the value of products. Farmers near
population centers have a distinct advantage in most direct marketing strategies. Pick-your-
own fruit, vegetable, or berry farms, for example, must be located within reasonable driving
distance of a significant population center. Farmer's markets are also logical market outlets
for producers of fresh produce from a fairly limited geographic area. Product handling and
transportation technologies, however, have reduced the significance of location, either as an
advantage or as an obstacle in marketing.

Market advantages associated with individual ownership or possession are perhaps

less obvious and less well understood than those associated with form, time, and place.
However, values associated with individuality may be far more important than any other in
developing sustainable agricultural systems. Different individuals, or groups of individuals,
value the same products differently. In other words, the same form or physical quality of
product may be valued differently by two different groups of people at any given time and
place. Thus, individual farmers can command higher market prices simply by offering their

AGRICULTURAL MARKETING |
 20

products to the individuals or groups who value them most. Products that are carefully
tailored or targeted to meet the specific needs of narrowly segmented markets may command
a significant price premium over mass-produced commodities that meet the same generic
need. Matching products to the tastes and preferences of specific consumer groups is the
essence of successful niche marketing.

MARKETING MIX

Management of the 4-P’s of marketing (marketing mix) is the mandate of a marketing

manager in firm. A marketing manager therefore analyzes the market, plans for the future,
develops marketing strategies, and meets market needs and desires. The marketing plan
identifies all controllable elements of the exchange relationship between an organization and
its customers. The 4-Ps are considered controllable since they represent the key inputs into
a marketing manager’s plan. Such inputs may entail budgetary allocation, human and physical
resources. The 4-Ps and their management strategies are explained below.

1. Product: -Is a tangible object or an intangible service that is mass produced or

manufactured on a large scale with a specific volume of units. Intangible products are
service based like the tourism industry and the hotel industry or codes-based
products like cell phone load and credits. Typical examples of a mass produced
tangible object are the motor car and the disposable razor. The product aspect
includes individual goods, product lines or service features and benefits that meet
consumer wants and needs as identified through market research.

2. Place: Place represents the location where a product can be purchased. It is often
referred to as the distribution channel. It can include any physical store as well as
virtual stores on the Internet. Place is not exactly a physical store where it is available.
Place is nothing but how the product takes place or creates image in the mind of
customers. It depends upon the perception of customers. Place aspect of product mix
deals with channels of distribution, middlemen, warehousing, transportation and
shipping as identified in research in meeting consumer expectations.

3. Price: The price is the amount a customer pays for the product. It is determined by a
number of factors including market share, competition, material costs, product
identity and the customer's perceived value of the product. Setting a price that serves

AGRICULTURAL MARKETING |
 21

the customer well and maximizes justifiable profits to the company is important.
Issues relevant include price of the product, level pricing, introductory pricing,
discounts, allowances. Again, this is established in relation to consumer willingness
to pay as identified via market research.

4. Promotion: represents all the communications that a marketer may use in the
marketplace. Promotion has four distinct elements: advertising, public relations,
personal selling and sales promotion.

If the Product, Price and Place are in sync with what consumers want/need, Promotion
reminds them the needs-satisfying Product/Service is available.

Marketing Strategies for Agriculture Products

1. Gather & analyze reliable market data

The first step to implementing an effective marketing campaign is to know who you’re
going after. It’s more than just “we’re going after Corn/Soy growers.” Answer the questions
your audience is asking, understand the problems they face, and determine the specific
products that solve those problems.

The quickest and easiest way to find this out is by analyzing market data. Here are
some data points that’ll help you understand farmers better:

 Personal & demographic information

 Crop type & rotation pattern

 Relationships with other growers

 Acreage

 Distinction between acres owned vs. operated vs. owned and operated

 Grain bin count & capacity

 Geospatial imagery of the operation

AGRICULTURAL MARKETING |
 22

If you’re gathering data from surveys, not only will you be able to obtain this level of
detail, but there are severe weaknesses in surveying as a source of objective data. Here are
some ways you can ensure that you’re gathering data from a reliable source:

Accuracy. Does the data accurately depict who the farmer is, how large their
operation is, what they’re farming, and the events impacting them and their bottom
line?

Coverage. How much of the market does the data cover? Is it enough to provide
helpful insights on the market as a whole? Can you use it to expand beyond who you
currently are marketing to?

Detail. How granular does the data go? Can you access details about individual
growers, farm operations, and field? Make sure you have enough details both on
farmers and on the market overall to make critical marketing decisions, develop
impactful segments, and craft messages that are highly specific and contextual to the
farmer’s current needs.

Recency. How frequently does your source update the data? How frequently are they
able to update it? Data that hasn’t been reliably updated since 2008 isn’t going to get
you very far. Make sure you have a source that updates annually or more.

Once you’ve acquired detailed marketing data, you can take the next steps to
implementing your marketing strategies for agriculture products.

2. Market to specific segments of farmers

After you’ve gathered the data, it’s time to put it to use by using it to create highly
specific messages to farmers. That’s where segmentation of your market by the
demographics we listed above is going to help.

Here’s an example. There are nearly 950,000 Corn/Soy growers in the Midwest,
which make up the largest segment of growers in the U.S.

Active Corn/Soy Growers in the Midwest by State

State Growers

Illinois 120,390

AGRICULTURAL MARKETING |
 23

Indiana 82,819

Michigan 107,015

Ohio 79,726

Wisconsin 77,922

Iowa 113,209

Kansas 73,628

Minnesota 93,359

Missouri 62,455

Nebraska 68,003

North Dakota 28,828

South Dakota 40,583

But you can segment the market even further than that. You don’t just want to target areas
with large numbers of growers but large numbers of growers with large farms. Using the data
at your disposal, you can segment and select the operations with the largest number of
operations farming 500+ acres of Corn/Soy:

Top Active Midwest 500+ Acre Corn/Soy Growers by County

County 500+ 1000+

Cass, ND 634 405

McLean, IL 518 220

Champaign, IL 495 204

Brown, SD 484 284

Livingston, IL 437 169

AGRICULTURAL MARKETING |
 24

Renville, MN 436 241

Minnehaha, SD 397 144

LaSalle, IL 390 162

Iroquois, IL 389 171

Richland, ND 387 247

Lancaster, NE 377 130

Kossuth, IA 364 144

Plymouth, IA 348 129

Grand Forks, ND 347 187

Spink, SD 347 241

Sangamon, IL 343 163

Redwood, MN 341 112

Stutsman, ND 329 203

Platte, NE 326 122

Sioux, IA 325 97

You can continue drilling down into these segments which, while small, ensure that
you can target the farmers who are most likely to do business with you.

Once you take the time to develop your segments, you can then focus your messaging
and product offer on those specific growers. If you have a product that works for smaller
farms and one for larger farms, market differently to those two segments. But even if you’re
marketing the same product to multiple segments, the use case and specifics in the message
are going to be different.

AGRICULTURAL MARKETING |
 25

The goal is to communicate the right message at the right time to the right grower.
Segmentation combined with custom messaging helps you do that, and you’ll see increased
conversion rates and ROI as a result.

3. Leverage data-targeted, omni channel marketing

Some ag companies choose the channel first—be it an ag publisher, radio station or

program, or even direct mail—and then determine who the audience will be. This approach
to marketing can be effective to a degree, especially in terms of brand awareness and
visibility.

But if you’ve taken the time to develop segmented audiences of farmers and messages
for each of them, then you need to market in such a way that you’re reaching them directly.
The primary advantage of data-targeted, omni channel marketing is that you specific
growers, not channels.

That means instead of focusing on specific publications or websites, you can focus on
specific groups of growers, and target them with a consistent message across a variety of
channels:

Programmatic ads. Programmatic is the automated auctioning of digital ad

space across hundreds of sites. So instead of displaying your ad to a variety of growers
on one site, you’re displaying it to a single grower (or group of growers) on a variety
of sites.

Facebook Advertising. Upload your data to Facebook to target Facebook ads directly
at farmers. You can also leverage Facebook’s targeting features to segment that
audience even further if you desire.

Email. Place a message directly in your farmers’ inbox. Email is still a high-ROI way
to communicate with farmers.

Direct mail. While direct mail is growing less common in other industries, a lot of
farmers respond to receiving marketing messages in the mail. Go ahead and use this
channel as one of your many marketing channels for added visibility and impact.

AGRICULTURAL MARKETING |
 26

The key to leveraging multiple channels is to have a consistent message across all of
them. That way, the farmer sees one of your programmatic ads, and then later recognizes the
same messaging in an email or direct mail piece. Build a level of familiarity and trust with
them through consistency and a powerful message that entices them to find out more.

The agricultural sector is one of the most important parts of any economy. An
efficient, well-maintained agriculture sector leads to overall economic benefits. In the last
decade, digital technology has risen to be one of the most crucial marketing platforms. With
the potential clients surfing the internet, it is paramount to advertise and navigate through
various social media platforms, to get them to notice your services. With the modern
agricultural revolution and the improvement and transformation in technology, agriculture
marketing has reached a much higher level.

Steps in Developing An Efficient Marketing Plan

Agriculture marketing companies are hired to form an efficient and profitable

marketing plan through digital marketing, to get maximum sales and traffic. The steps to
develop an effective marketing plan are a complex and intricate process and need
professional help. These are some of the crucial steps in developing a functional and
profitable marketing plan.

➢ Targeting Potential Customers- Products need to be identified with their

targeted customers. Companies need to check which product is bringing in what type of
customers more. The customers can be categorized by age, sex, or other preferences.
Identifying the potential customers, assists in making a more focused digital marketing plan.

➢ Create a Unique Sales Proposition- the Agricultural market is crowded with cut-
throat competitors. You need something different, something unique, to divert the customer’s
attention from your competitors to your business proposal. Formulating a unique strategy
gets you apart from your competitors and puts a bright light on you, grabbing customer’s
instant attention.

➢ Developing the Right Core Team- An agricultural marketing company needs

to recognize a perfectly balanced core team and formulate them to their fullest potential to
get the best results. An agriculture business needs help in various segments like Horticulture,

AGRICULTURAL MARKETING |
 27

Soil Conservation, Fisheries, Forest Department, Dairy Production and much more. They need
to have a well-balanced team of experienced professionals to deal with each of these sections.

➢ Digital Advertising- There are many methods of advertising available in the world
of digital marketing. You can choose the advertisement technique that works best for you and
your business. Like implementing Pay Per Click ads helps in promoting your website and its
content on various other search engines, social media, mobile apps, and more.

➢ Evaluate your marketing techniques- After implementing a particular

technique, businesses are advised to evaluate and consolidate the relevant data. It informs
and updates the businesses on whether their marketing techniques are working and if the
targeted customers are being directed to your business website.

AGRICULTURAL MARKETING |
 28

Activity 2-1

Name: ______________________________________ Course/Year/Section ________________

I. Multiple Choice

1. Business must satisfy needs and wants of their customer to compete.

a. Segmentation
b. Marketing concept
c. Market segments
d. Distribution
2. Person who buys the product.
a. Customer
b. Consumer
c. Target Marketing
d. Mass Marketing
3. Similar group of consumers responding to the same marketing mix.
a. Marketing Concept
b. Distribution
c. Segmentation
d. Market Segments
4. Determines prices for products in order to maximize profit.
a. Pricing
b. Promotion
c. Product/Service Management
d. Financing
5. Developing, improving and maintaining a product mix.
a. Pricing
b. Promotion
c. Product/Service Management
d. Financing

II. Supposed you are a Technical Support Salesman for Combine Harvester and other farm
machineries and equipment, the task at hand is for you to create a market research and
formulate a marketing plan for Nueva Ecija market. What will be your initial marketing
strategies to consider?

_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________
_________________________________________________________________________________________________________

________________________________________________________________________________________________________

AGRICULTURAL MARKETING |
 29

UNIT III - Target Market

At the end of the unit, you are expected to:

1. Analyzed market segmentation in agricultural market

2. Classified agricultural products accordingly

Market Segment Analysis:

A journey like this begins by understanding farmers. A successful farmer has deep
knowledge and broad local connections. The more connections a farmer has, the more
information and opportunity they will likely have access to.

Three interrelated stakeholders constitute the main mechanism for effecting

and forecasting market need: The agricultural industry is a multisided market of
stakeholders which can be broken down simply into four interrelated customer segments: a
circle consisting of farmers, vendors, government agencies, and consumers; which support
vast arrays of diversified agricultural production niches, vendor services and products,
varying levels of regulation and government oversight, population consumption levels; all of
which have varying scales of operation, scope, and cooperation (local, regional, national, and
international).

AGRICULTURAL MARKETING |
 30

Farmers: Mix and Scale Operations

Each farm has a mix of operations which serves market forces it caters to: The
agricultural industry is full of a diverse array of agricultural operations niches—types of
produce they grow and livestock they rear. Each farm has its own unique mix of operations,
with its own subset of vendors, levels of government support, and consumer segments it
supports. This is indicated below in the customer segments row.

The business decision to invest in a mix of market niches is made by the volition
of the farm owners. Farm owners take on the business risk of production and executing
farm operations to ensure production goals are met for a perceived vendor or consumer
segment, with the intent of serving the communities.

Each farm has a scale of operations it geographically caters to: The scale of
operations further distinguishes customer segments not only in terms of farm operations but
what vendor products, services, equipment, financial support, and government regulations
they will need or encounter. This is indicated in the above table 1: Industry Stakeholders, in
the Scale of Operations column. The table segments five characters of agricultural operations
scale. It starts with consumers such as hobbyist gardeners; expanding outward toward
locally supported small farm operations, mid-level regional operations, large interstate
producers, and finally multinational operations. In all there are five farm operation scales
based mainly on the vastness of the geographic markets they cater to.

Definition of an Agricultural Product?

Agricultural products are derived from cultivated plants or animals to sustain or

enhance human life. Food is the most widely produced agricultural product, and, the global

AGRICULTURAL MARKETING |
 31

per-person food supply as measured in calories per person has risen more than 20 percent
in the past 50 years.

But people also use a vast array of agricultural products every day for other reasons,
ranging from the clothes we wear to the paper we write on. We decorate with flowers often
produced by agriculture and run our cars in part on ethanol produced by agriculture. We also
use agricultural products to make plastics. As technology advances at breakneck speed, new
uses for agricultural products will continue to expand.

4 Categories of Agricultural Products

Agricultural products fall into one of four groups: foods, fuels, fibers, and raw
materials:

1. Food: Grains and cereal crops are grown on more than half the world's farmed
acreage, according to the U.S. Department of Agriculture (USDA). But food agriculture
crops encompass more than just cereals like wheat and corn. Meats and dairy
products like milk also are agricultural food products, as are honey and farmed fish.

2. Fuels: Ethanol, produced from corn, sugarcane, or sorghum, is the agricultural fuel
product in the widest use. However, agricultural byproducts like straw sugarcane also
are burned to produce power.

3. Fibers: Fiber crops include cotton (one of the top 10 crops produced in the U.S. every
year), wool, and silk. Agricultural producers also use hemp to make rope and flax for
linen. It's even possible to use bamboo fiber to make cloth.

4. Raw Materials: These are agricultural products used to make other agricultural
products. For example, livestock feed, considered an agricultural product, is used to
provide nourishment to the animals that produce dairy products.

Organic Agricultural Products

The Department of Agriculture certifies only agricultural products that fall into a
specific, narrow category. The basic guideline for what constitutes an agricultural product is
as follows:

AGRICULTURAL MARKETING |
 32

Any agricultural commodity or product, whether raw or processed, including any

commodity or product derived from livestock, that is marketed for human or livestock
consumption.

Examples of agricultural items include such things as textiles, flowers, food, seed,
plants, and feed.

Nonfood Agricultural Products

The fact that the government certifies and oversees only organic agricultural
products that are marketed for consumption creates some problems in the organic product
marketplace. For example, organic body care products are not always made with 100% of
agricultural products.

Body care makers using only agricultural ingredients may be certified as organic. The
authority does not cover products that are made with "nonagricultural substances." Minerals,
bacterial cultures, gums, citric acid, pectin, and other items are considered nonagricultural
and are widely used in agricultural products that we don't eat.

Legal and Economic Definition of Agricultural Products

From the standpoint of taxes, one needs to know what qualifies as an agricultural
product to determine what can properly be deducted as an expense and what constitutes
revenue.

According to the U.S. Department of Revenue, agricultural production is a series of

activities (otherwise known as the production process) that result in a product that
ultimately will be sold at retail. The agricultural production process begins when you
purchase or breed a qualifying animal or prepare the soil for planting crops. The process ends
when you place the livestock or crops (packaged or unpackaged) into finished good
inventory, or your grain is sellable or at the stage that it can be commingled.

Agricultural production includes these activities:

 Agriculture: cultivating soil; planting; raising, and harvesting crops; rearing, feeding,
and managing animals

 Aquaculture: raising private aquatic animals (fish)

 Floriculture: growing flowering plants

AGRICULTURAL MARKETING |
 33

 Horticulture: growing fruits, vegetables, and plants

 Maple syrup harvesting

 Silviculture: growing and caring for fresh trees

What Agricultural Production Does and Does Not Include

Businesses involved in agricultural production include:

 Breeding operations

 Farms, including crops and certain animals

 Greenhouses and nurseries that grow their products to be sold at retail

 Ranches

 Tree and sod farms (if products are sold at retail and not installed by the grower)

Agricultural production does not include:

 Storing or preserving raw materials before the start of the production process

 Storing, preserving, handling, or moving finished goods

 Storing or processing agricultural products at co-ops, grain elevators, dairies, or meat

packers

 Raising animals for your use

AGRICULTURAL MARKETING |
 34

Activity 3-1

Name: ______________________________________ Course/Year/Section ________________

Review questions:

1. What are the categories of agricultural products? Give example for each.
2. What are the activities of agricultural production? Cite a real life scenario for which you
are familiar with.
3. What are the four interrelated customer segments in agriculture? Expound your answer
by citing example?
4. How does agriculture industry in both local and international market affected by recent
pandemic?

AGRICULTURAL MARKETING |
 35

UNIT IV - Promotion of Agricultural Products

At the end of this unit, you are expected to:

5. Learned various promotional strategies used in marketing agricultural

products;
6. Create your own advertising and promotional strategies.

7 Ways to Advertise Agricultural Products

With so many different advertising options out there for agricultural buyers and
suppliers, we thought we’d take a look at them all, group them up and tell you the pros and
cons of each one.

Whether you’re looking to launch a brand new product to the market, or are just
looking for a new way to advertise an already successful one, this list should give you a good
place to start on where to advertise.

Print media

Pros: Magazines and newspapers provide a very large, often traditional, audience to
get your products in front of, with a proven track record. Adverts can give you a huge amount
of exposure, and are brilliant for new product launches where there is a concern about brand
recognition or for mass marketing.

Cons: This isn’t the cheapest option and you will need to think about how you can
make your advertising stand out from the crowd so people will pay attention.

Classifieds:

Pros: The classifieds section of agricultural magazines such as Farmers Weekly

provide a very specific audience – an audience looking to purchase. This is perfect if you’re
trying to sell a product that is well-established, and the need for said product is well known
amongst your target audience.

Cons: If you are trying to sell a product that isn’t particularly recognizable, or isn’t
very glamorous, your advert may be a little overshadowed by some of the more appealing
bits of farm machinery on sale.

AGRICULTURAL MARKETING |
 36

Face to face

Pros: You can get your product right in front of the customer – if your product is
something that needs to be demonstrated to be understood, this might be the best course of
action. This relies on your ability to sell your product and you know immediately if your
tactics have worked.

Cons: If you, or your employees are not particularly strong sellers, then you may
struggle to get the best out of this. Face-to-face events also need investment over above
purchasing stand space and manning it. For example, you must make up banners, flyers and
other sales collateral to make an impact.

However, in today’s pandemic, face to face advertising is somehow a problem due to

the current situation. Only those products that requires actual demonstration like operating
a farm equipment may somehow use face to face demonstration as a form of promotion.

Internet

Pros: The audience of your internet-based advertising can be as broad or specific as

you would like. You can hit every farmer in the UK or just those in your local area. Spend can
also be varied depending on your budget, so no amount of money can be ‘too little’ in regards
to internet advertising. It also gives you measurable and quantifiable statistics from which
you can learn about the most effective techniques.

Cons: If your audience is a more traditional one, you may struggle to find the correct
audience through traditional online channels. Other online methods (such as E-newsletters)
however, appear to be very effective in attracting the more traditional audience.

Radio

Pros: Radio is once again a very broad-hitting advertising channel and as result is
rarely used in UK agriculture. Depending on how you spend your money, you could be hitting
tens of thousands of people. But if you run a farm shop or petting farm, radio might be the
right fit if lots of people in the local area listen to a regional radio programme.

Cons: Radio, unfortunately, lacks a particularly sophisticated ‘tracking’ system. You

may find great success from radio advertising, but getting any detail about exactly what is
working is simply not possible.

AGRICULTURAL MARKETING |
 37

Promotional item giveaways

Pros: Promotional items give a business potentially huge amounts of brand

awareness. Unlike many of the other channels on this list, promotional items may continue
to have an effect long after you have stopped producing them. Things like t-shirts, bags, pens
and rucksacks may enter daily use amongst your target audience.

Cons: Promotional items also involve losing a degree of control – if someone commits
a crime whilst wearing a t-shirt branded with your logo, your brand may be damaged by
association, despite no wrong-doing on your part.

Social media

Pros: Social media provides a brilliant way to influence an audience outside of

‘traditional’ advertising revenues. Social media is increasingly becoming integrated into
people’s daily lives and they look at it multiple times a day. When done correctly, social media
can bring your marketing and sales messages to an audience through a persuasive channel.

Cons: While social media can be extremely effective, it also requires a lot of input – in
order to get the most out of it you are required to be active members of your social channels,
as well as continuously generating new content. Social media accounts that only publish
adverts are extremely off-putting. Getting it right is time-consuming.

AGRICULTURAL MARKETING |
 38

Activity 4-1

Name: ______________________________________ Course/Year/Section ________________

Review questions:

1. Choose 5 agricultural company and cite their respective promotional or advertising

strategy used to market their respective product

2. Online marketing is prevalent nowadays, do you think it is also applicable to

agriculture industry? In what way do farmers and consumers obtain marketing
information with regards to buying inputs for their production?

AGRICULTURAL MARKETING |
 39

UNIT V - CURRENT PHILIPPINE AGRIBUSINESS INDUSTRY

At the end of the unit, you are expected to:

1. Familiarized with Philippine Agribusiness Industry players

2. Gain insights on various agricultural products offered in the market and

THE BIG DOGS OF PHILIPPINE AGRIBUSINESS

This discussion will break large-scale Philippine agribusiness players into the
following categories:

 Large predominantly Filipino-owned food growers and packagers.

 Large predominantly foreign-owned food growers and packagers.

 Large, integrated cooperatives,

 Large food packagers, restaurants and supermarkets.

 Large landowners.

 Large tycoons who COULD get into foods if they wanted to, but currently don’t plow
in that field.

A listing of food companies with a place on the Philippine Stock Exchange is also
provided, along with a recap that designates the handful of prominent people who keep their
companies rich and farmers poor.

There is no master-list of food companies or land-holders in the Philippines. Indeed,

some information is hard to get at. For example, private companies such as Dole Philippines,
a wholly owned subsidiary of Dole Foods in the United States, reports no financial
information. So consider this blog a starting point, perhaps, or simply a discussion paper. We
can draw lessons from it, for sure. And we will.

AGRICULTURAL MARKETING |
 40

Large Filipino-owned food growers and packagers

These companies are huge players the Philippine food production and packaging
business:

Young sugar cane

 Lucio Tan Companies. Lucio Tan is a Chinese entrepreneur who made it big time in
the Philippines. He directs a lot of businesses and many of them grow or get stuff from
the ground, from the farms. Here are his food-related companies: (1) Foremost Farms
Inc (hogs), (2) Lotte Philippines (confectionaries), (3) Asia Brewery, Inc. (beer),
(4) Tanduay Distillers, Inc. (alcoholic beverages), and (5) Fortune Tobacco
Corporation (cigarettes).

 San Miguel Companies. San Miguel, under the direction of Eduardo M. Cojuanco and
Ramon S. Ang, is undergoing a dramatic transformation from essentially a beer and
foods company to a conglomerate in infrastructure development, power, foods and
beer. Food subsidiaries and partnerships are major brands and operate primarily in
the Philippines: Pure Foods Products, Monterey Meats, and Magnolia
Chicken. Hormel is a “partner” . . . all with products sourced from Philippine growers
and farmers. Beer is made of grains, so San Miguel sources theirs from somewhere.
Where is a bit of a mystery. But there may be a reason the company’s infrastructure
development includes ports and graineries near ports. San Miguel owned a large
chunk of Del Monte from 2008 to 2010, then sold it to finance diversification. One
element of the diversification is into palm oils, where partner Kuok is looking for a
large growing field.

AGRICULTURAL MARKETING |
 41

 NutriAsia Companies. The quiet tycoon who owns most of NutriAsia is Joselito
Campos. It is perhaps simplest to divide his huge holdings into two parts: (1) sauces
(Datu Puti, Papa and many more), and (2) Del Monte Philippines. The Del Monte stake
was raised when NutriAsia bought out San Miguel’s portion of Del Monte a few years
ago; Del Monte employs about 4,000 workers. About 70% of the Del Monte’s assets
are in the Philippines. Net income in 2012 was US $460 million. About 21% of Del
Monte’s stock is traded on the Pacific Stock Exchange.

 Gokongwei Holdings. See food packaging companies, below (Universal Robina and
Robinson’s Supermarkets).

One good point in favor of large agribusiness is the efficiency of wealth-building. This
2012 article itemizes some San Miguel Pure Foods initiatives to pare costs. This is an example
of the drive for wealth that the Philippines needs.

Who is growing all the foods? We don’t have names for the growers. Growing is done
primarily under contract, privately, and there are thousands of suppliers. Here is the San
Miguel’s Magnolia Chicken contract growing application. And the Monterey Meats hog contract
growing application. Presumably something similar exists for grains and other crops,
however, those examples have avoided your trepid inquirer.

Large foreign-owned food growers and packagers

We have three of note:

 Dole Philippines. US based Dole Food Company “Dole sources bananas, fresh
pineapples, asparagus, mangoes, papaya and other fruits and vegetables from the
Philippines . . . ” and other Asian countries. The Dole farming subsidiary in Davao is
named “Stanfilco”. Dole has stood for years as a poster-child for bad corporate
behavior among leftists and human rights critics. The parent company’s sales were US
$7 billion in 2011; net income was only US $ 42 million, off of a loss in 2010. The
company has received a purchase offer from David H. Murdoch, who already owns
substantial shares. Financial information about the Philippine operation is unknown
at this point. It appears that the company employs from 15,000 to 20,000 permanent
and temporary workers.

AGRICULTURAL MARKETING |
 42

 Nestle Philippines, Inc. Wholly owned subsidiary of Nestle S.A. Brands include
Nescafe, Nido, Milo, Nestea, Maggi, Bear Brand, Nestle and Purina. Manufacturing
facilities in Cabuyao (Laguna), Cagayan de Oro, Lipa (Batangas), Pulilan (Bulacan) and
Tanauan (Batangas). Markets throughout Asia.

 First Pacific Company. The ownership of First Pacific is well known in the
Philippines. The Manuel V. Pangilinan Companies are everywhere (telephone
companies [Pacific Long Distance Telephone Company- PLDT, Sun, Smart],
educational institutions, real estate and infrastructure development and mining).
Hong Kong based First Pacific holds his investments in PLDT, Philex mining, Metro
Pacific (infrastructure projects), and Indofoods. Indofoods is the farming company
growing predominantly in Indonesia. It is likely to become a main player in the
Philippines growing and exporting palm products. Therefore, it is akin to Dole, an
outside company that will probably thrive on the rich Philippine soil. Sales of First
Pacific in 2012 were just shy of US $6 billion. Net income was US $830 million.

Large, integrated cooperatives

One approach to building strength in Philippine agribusiness would be to get

cooperatives under private, profit-making management. One cooperative comes close to this
model:

Contract growing

 AsiaPro Cooperative is the largest Philippine cooperative with membership of about

34,000 workers. The focus is on raising member efficiencies and profits through skill-

AGRICULTURAL MARKETING |
 43

enhancement and support. Operational structure is molded from “the best practices”
of both corporate and cooperative models.

 The Philippine Sugar Millers Association, Inc. “PSMA is a non-profit association of sugar
millers which promotes “the development of the sugar industry through increased
efficiency, productivity, and sustainability in a socially-responsible environment.
Current membership consists of 16 mills which produce 78% of the total Philippine
sugar production.”

Food packagers, restaurants and supermarkets

These are companies that deal foods to consumers. They have tremendous clout in
the Philippine marketplace because they buy in huge quantities. They have choices: buy
Filipino products or buy U.S., Asian or other imported products.

The two Gokongwei family holdings could be joined, I suppose, with Gokongwei
placed in the major Philippine player listing above.

 Agrinurture Incorporated Food packaging with an activist agenda, in that

Agrinurture helps farmers succeed by providing loans, seeds, fertilizers and
pesticides as a part of the contract purchase agreement.

 Universal Robina Corporation Food packaging. Part of the huge investment portfolio
of John Gokongwei, Jr, which includes real estate, cellular and airlines (Cebu Pacific).

 Jollibee Foods Corporation. Fast-food restaurant chain, is a Filipino multinational

chain of fast food restaurants owned by Jollibee Foods Corporation (JFC). As of April
2018, JFC had a total of about 1,200 Jollibee outlets world wide sales 71 billion pesos;
net income 3.7 billion pesos.

 Robinsons Supermarkets Part of the Gokongwei family holdings. 157 outlets as of

2017.

 SM Supermarkets Part of U.S. based Supervalue, Inc. SM Markets, the country’s

biggest food retail chain, now has 265 branches nationwide (2019) as it continues to
expand its coverage of the Philippines from its Aparri store up north to its General
Santos branch down south.

Here’s a description of why Agrinurture’s approach is constructive:

AGRICULTURAL MARKETING |
 44

“With improved rural infrastructures, these distribution companies [like Agrinuture]

are willing to take the risks inherent to farming, thus helping to improve the incomes of
farmers and farm workers. The same guarantee is also being given by large
corporations like San Miguel Corporation and Nestle in the purchase of such farm
products as corn, cassava, and coffee.”

Large landowners

This is the big mystery that emerges from this analysis. The huge agribusiness firms
do very little of the primary growing. They rely upon product supplied by independent
growers, or growers under contract. Who the landowners are remains largely unknown,
other than that one peculiar and controversial case:

 Hacienda Luisita. 6,435-hectare sugar plantation estate. Controversial for its ties to
the Aquino family and President Cory Aquino’s part in land distribution to workers.
Controversial as well for the 12 deaths that occurred in a confrontation between
protesting workers and security police in 2004.

Large tycoons who COULD get into foods if they wanted to

Here are the richest players in Philippines right now who have no food or farming
interests.

 Ayala Corporations: retail, real estate, banking, telecommunications, water

infrastructure, renewable energy, electronics, information technology, process
outsourcing.

 Henry Sy: retailing, real estate, hospitality, banking, mining, education including
healthcare services.

 Enrique Razon: shipping, gaming, publishing.

 David Consunji: RE, mining.

Food Processing firms traded on the Philippine Stock Exchange

 Agrinurture, Inc. ANI Food packaging.

 Alliance Select Foods International, Inc FOOD Processed seafoods (tuna).

 Bogo Medelin Milling Company BMM

AGRICULTURAL MARKETING |
 45

 Central Azecurera de Tarlac, Inc CAT Sugar processor.

 D&L Industries, Inc DNL Products for the food (oils and fats), plastics, and aerosol
industries; packaging.

 Del Monte Pacific Ltd DMPL Pineapple and other fruits.

 Ginebra San Miguel, Inc GSMI Alcoholic beverages; health drinks.

 Jollibee Foods Corporation JFC Fast food restaurant chain.

 LT Group, Inc LTG Lucio Tan Group.

 Liberty Flour Mills, Inc LFM flour and flour products.

 Pancake House, Inc PCKH Restaurants: Pancake House, Dencio’s, Kabisera ni Dencio,
Teriyaki Boy, Sizzlin’ Pepper Steak, Singkit, and Le Coeur de France.

 Pepsi-Cola Products Philippines, Inc PIP Co-owned by Lotte Chilsung of Korea.

Beverages: Pepsi, Mtn Dew, 7-up, Gatorade, Tropicana, Lipton.

 RFM Corporation RFM Food packager; many products.

 Roxas Holdings, Inc ROX Sugar producer.

 Roxas and Company, Inc RCI Real estate (raw land) and “sugar related assets”.

 San Miguel Brewery, Inc SMB San Miguel operates five breweries in the Philippines.

 San Miguel Corporation SMC (five listings) Parent company.

 San Miguel Pure Foods Company, Inc PF and PFP The foods group of San Miguel
merged with Pure Foods acquisition in 2001.

 Swift Foods, Inc SFIP and SFI The chicken company that turned to God.

 Universal Robina Corporation URC

 Victorias Milling Company, Inc VMC Victorias City, Negros Occidental. Sugar.

 Vitarich Corporation VITA Feeds: fish, poultry, hogs, specialty. 2012 sales 3 billion;
profit 114 MM

AGRICULTURAL MARKETING |
 46

Activity 5-1

Name: ______________________________________ Course/Year/Section ________________

Review questions:

1. Who are the biggest industry players in Philippine agribusiness?

2. What are the impact of global pandemic to the agriculture industry in terms of:
a. Production
b. Employment
c. Pricing
d. Distribution
3. After studying Agricultural Marketing, what now is your opinion regarding the
following topic?
a. That agriculture really important;
b. There is a career for me in agriculture business;
c. That you would love to become a farmer businessman;
d. That you improve buying behavior and attitude towards this industry.

Case Analysis:

Each student will present a case analysis/study of current agricultural based industry
whether it is corporate, partnership, single proprietorship or cooperative type with reference
on the following indicators:

a. Pricing
b. Distribution and market share
c. Target customers
d. Employment generated
e. Corporate Responsibility
f. Impact to the Society

AGRICULTURAL MARKETING |
 47

REFERENCES

Kotler, Philip. (2000) Marketing Management. Upper Saddle River, New Jersey:
Prentice Hall.
Problems and Prospects of Agricultural Marketing in India: An Overview
International Journal of Agricultural and Food Science

Agricultural Marketing: A National Level Quarterly Journal on Agricultural Marketing:

https://mohdhafezan.files.wordpress.com/2016/01/chapter-1.pdf

https://jgdb.com/business/marketing/types-of-marketing/what-is-agricultural-
marketing

https://www.smartsheet.com/strategic-marketing-processes-and-planning

https://medium.com/@cvmgdigitalmarketing/how-to-develop-a-successful-
agriculture-marketing-plan-cc6c6746b4bf

https://agrowbase.wordpress.com/target-market/

https://www.thebalancesmb.com/what-is-an-agricultural-product-2538211

AGRICULTURAL MARKETING |