- - AGRICULTURE CORE CURRICULUM - - (CLF1000) Advanced Core Cluster: AGRICULTURAL BUSINESS MANAGEMENT (CLF1450) Unit Title: AGRICULTURAL MARKETING ____________________________________________________________________________ (CLF1454) Topic: DEVELOPING A Time Year(s) MARKETING PLAN 3 hours 3 / 4 ____________________________________________________________________________ Topic Objectives: Upon completion of this lesson, the students will be able to: Learning Outcome #: (M-6) - Develop a marketing plan for a commodity. (M-7) - Describe the purpose and function of local markets Special Materials and Equipment: Resources: Lee, J. S (1990). MARKETING PLAN PROJECT. Available from: FFA Supply Service (Contests and Awards Division), P.O. Box 15160, Alexandria, VA 22309-0160. References: Luening, R. A., Klemme, R. M., & Mortenson, W. P. (1991). THE FARM MANAGEMENT HANDBOOK (7th ed.). Danville, IL: Interstate Publishers. Evaluation: Completion of activity assignments, marketing plan, and marketing plan presentation TOPIC PRESENTATION: Marketing and Marketing Planning A. Marketing is the process of moving goods and services from the farm producer to the consumer. 1. Producers market agricultural commodities, the output of the farm, ranch, nursery, or vineyard. 2. Suppliers of materials and services (inputs) to the producers also need to market their products and services. 3. There are many producers of agricultural commodities compared to the number of "input" (supply and service) producers. 4. Agricultural commodities are marketed somewhat differently from supplies and services to the producers. B. Three marketing functions are performed in the marketing of food and fiber: 1. The exchange functions of buying and selling 2. The physical functions of storage, transportation, and processing 3. The facilitating functions of grading, financing, providing market information, and risk bearing C. Marketing of inputs to producers has many of the same characteristics as agricultural commodity marketing. However, there is more emphasis on developing sales prospects. 1. Marketing has been defined as the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives. D. Marketing planning is the process of developing a marketing plan. 1. A marketing plan is a written statement made to guide the marketing process. 2. The marketing plan should contain: a. A market analysis detailing the current situation with respect to the products and service produced by the business. b. A business proposition stating marketing objectives. c. An action plan for reaching the marketing objectives. d. A projected budget showing how the plan will be financed. 3. The marketing planning process requires considerable thought and information. a. A team of individuals often work together. b. Those who have the responsibility for marketing should be involved. c. Plans are usually dynamic, meaning that modifications are made as situations change during implementation. E. Benefits of Marketing Planning 1. If done effectively, it increases the profits of the business. 2. Time and other resources are allocated to the highest priority uses. 3. A long-range plan focuses efforts and resources on long-range goals rather than diverting them to short-range, "fire-fighting" activities. 4. The business is better coordinated in achieving its objectives. . 5. Sudden, new developments (such as competition) can be better dealt with. F. Two Kinds of Marketing Plans 1. A new product plan is prepared before a new product is produced. a. In some cases, the plan is used to determine the feasibility of producing a new product. b. If a company is considering several new products, marketing plans can be used to forecast which of the new products is likely to be the most successful. Such plans may include development of the new product. 2. An annual marketing plan is prepared each year for products or services that are already being marketed. The plan is needed annually to accommodate changes in competition, consumer preference, and product improvements. A few companies prepare plans for several years in advance and revise them each year. __________________________________________________________ ACTIVITY: 1. Give examples of products or services that have been available for years. Have these companies continued to promote their products? __________________________________________________________ G. Characteristics of a Good Marketing Plan 1. The marketing plan should help the business gain a share of the market or increase the present share. 2. The plan should be realistic. 3. The plan should be complete and recognize all the opportunities and threats faced by the business. 4. The plan should provide specific details, such as schedules, procedures, and resource allocations. 5. The plan is more likely to be used if it is written by the users. 6. The plan should be easy to understand, and written in concise terms. 7. The plan should be based on accurate and complete information. 8. The plan should be revised annually and/or as new product modifications necessitate different approaches to marketing. 9. Both management and marketing personnel should be strongly committed to the plan. H. Phases of the Marketing Planning Process A written marketing plan should contain the following five procedures: 1. An analysis of the market: What is the situation? a. The market situation refers to factors in the business environment which impact a marketing plan. b. Market research is the process of obtaining accurate market information about who buys and why they buy. c. Data can be collected directly from potential consumers via mail surveys, telephone surveys, interviews, and observations of potential customers' buying habits. d. Information can also be obtained from market reporting services, research bulletins, and agribusiness publications. e. Sales trends and sales forecasts should be considered. f. The analysis of the situation should include a detailed analysis of the strengths and weakness of the business and an equally detailed analysis of the threats and opportunities existing in the business environment. 2. A business proposition: Where are we going? a. The business proposition specifies the goal of the marketing plan. b. The key assumptions of the plan should be explicitly listed. c. The target market or markets should be identified. d. The objectives of the plan and general strategy for achieving them should be explicity stated. 3. A plan of action: What should be done? a. Describe how the proposed objectives of the marketing plan will be reached. b. Specify how much product will be sold and identify the buyers and means of sale. c. Specify any promotional activities such as advertising. 4. A projected budget: What is the financial situation? a. Every marketing action costs something. A plan cannot be implemented without resources, usually both money and effort. b. Costs of advertising, research, and sales staff training and expenses should be carefully budgeted. 5. An evaluation: How well did we do? a. This is an important step. Problems or success in executing one plan can inform the development of future plans. __________________________________________________________ ACTIVITY: 1. Divide the class into teams of three to five students. Provide students with the rules to the FFA Marketing Plan Project and the example plan from Lee. Have the teams develop a 5 - 10 page marketing plan for an agricultural commodity or service. 2. Interview or invite as a speaker a professional market analyst or market researcher in order to learn more about marketing and marketing planning. __________________________________________________________ 12/11/91 EEZ/ez #%&C