Aquaculture Marketing

1. Aquaculture Marketing

2. Opening Comments • Aquaculture—old in practice, new ag industries • Rapid expansion globally • Development plagued by marketing problems • Main problem: matching production to market needs

3. Opening Comments • Good example: catfish farming • Farmers were well into production before producers and administrators gave serious consideration to market research and data collection • demand was great, so no difficulty selling • market analysis only really began in the 1970’s

4. Opening Comments • This dilemma was also shown by salmon and shrimp industries • failure to understand the market has driven many producers out of business • knowledge is necessary for locating markets for new and established products, for price determinations and for setting quality standards • what has helped is the integration of the quality concept with marketing: HACCP

5. Identifying Markets • Just what is a market? Can be defined in many different ways: • a location: Pike’s Place Mkt., Seattle • a product: jumbo shrimp • a time: September - October catfish market, European Christmas market • a level: retail vs. wholesale

6. Part 1: The Marketing Plan (According to Philip Kotler) • After setting the firm’s purpose and goal, the marketing plan is the starting point for the rest of planning • most marketing plans involve single products or lines of products

7. Part 1: The Marketing Plan • Current situation • Opportunity and issue study • Goals • Marketing strategies • Working plans • Financial studies • Needed controls

8. Current Market Situation • market situation: background and current situation wrt consumer needs, likes/dislikes, buying trends; current size and past growth of the total market, sales in various geographical areas • product situation: recent history of sales, revenues for a current product • competitive situation: size, goals, market share, product quality, marketing strategies present and future of competitors

9. Current Market Situation • Distribution situation: sales made through each type of middleman (brokers, wholesalers, retailer) in the distribution channel (later) • Macroeconomic environment: general economic situation has a bearing on sales (e.g., population figures, economic climate, technology, legal issues, social issues, etc.)

10. Opportunity Analysis (SWOT) • strength and weakness study: main ones of the company and product from factors within the firm (?) • opportunities and threats analysis: main ones facing the product from factors outside the firm, ranked in order of importance (?) • goals: financial and marketing (yearly ROI of 25% vs. 50% increase in sales)

11. Opportunity Analysis • marketing strategy: basic approach to achieve goals • target markets: what does the consumer need? • product positioning: best quality or lowest price? • size of product line: number/types of products sold • price: compared to other similar ones • distribution: how, where and by whom? • sales force: size, type, quality

12. Opportunity Analysis (cont) • marketing strategy (cont.) • level and quality of service • advertising: amount needed, worked? • sales promotion: ditto… • r&d: amount, types, timing, success? • market research: amount/types

13. Opportunity Analysis (cont) • working plan: once plan is approved, working plan activates marketing plan (who does what, etc.) • financial study: forecast of future sales revenue, cost of additional product and personnel • controls: feedback mechanisms to measure progress, often quarterly or monthly reports

14. Part 2: Marketing Channels • Refers to the institutional structure in place for movement and exchange of goods • from producer consumer • helps with record keeping to consider movement a “channel” • really regards a flow of information • demand creates flow • if conditions of sale are agreed upon, flow through or “down” the channel starts

16. How can you avoid all this complexity?

17. Avoiding Market Channel Complexity: direct sales! • small quantity of product • transaction does not necessitate intermediary • farmer develops own capacity to handle shrimp

18. Levels of Market Channel Complexity • farmer ---> consumer • farmer ---> retailer ---> consumer • farmer ---> wholesaler ---> retailer ---> consumer • farmer ---> broker ---> processor ---> wholesaler ---> retailers ---> consumer • retailers: hotels, restaurants, institutions

19. Market Channel and Price • As product moves through the channel, the price at each stage is increased in accordance with value added to the product • farmers not often pleased with discrepancy in price between what they received and what consumers pay • difference is the marketing margin or marketing bill (70-80 cents on the dollar) • margin is largely affected by time of sale and price paid for raw product • other factors: governmental price controls, producer organizations, co-ops, type of product, market concentration

20. Length of Channels • Channels can be simple or long and complex • length/complexity depend upon the volume of product moved, number of functions performed, scale of operation at each stage and the distribution system chosen • organization depends upon the type of markets, organization of producers

21. Increasing Market Share • Commercially-reared product is often in direct competition with wild-sourced • also in competition with imports • factors that affect sales must be isolated for farmers to compete • market share is typically increased by monitoring: product, price, promotion and place

22. Product • The key to expanding sales is a premium product • needs a QA/QC department or program • manager must assure that size, taste, packaging and other characteristics are pleasing to customer prior to putting on the market • off-flavor, color, texture and general appearance are key elements

23. Price • To minimize price, the manager will keep processing costs at a minimum • this insures that product price is competitive • in a purely competitive market, price is determined by interaction between demand and supply (REM?) • price often identified in real world by discovery (REM?) • an error in pricing often has serious consequences

24. Promotion • Involves programs to encourage sale and increasemarket share at any point in the channel by influencing potential purchases • promotion communicates information including product quality, price, and benefits of the product to potential clients • it acts on both the intellectual and emotional state of the buyer • various examples?

25. Place • Distribution of the product to locations used by customers wishing to purchase the product is a market function • sometimes product is transported hundreds of miles from the farm • frozen products are transported the greatest distances • market share is increased by transporting product to places where it has previously been unavailable

26. Homework • Think about the marketing aspects of your hypothetical operation • Where are your markets? Be specific! • What are you going to sell? Why? • How are you going to promote your product? • Outline your marketing channel (simple diagram) • Due in class next week (Tuesday)