Marketing factor of agro-industrial projects
The primary elements in marketing analysis of an agro-industrial project are (a) consumer analysis, (b) analysis competitive environment, and (c) marketing plan. Consumer analysis identifies needs of a product created by a complex interaction of physiological, sociological and psychological motives. It is necessary to divide consumers into groups or market segments. Geographic location often reveals ethnic or regional taste differences. Age and sex of consumers are two other common segmenting variables. Another variable is income level. Yet another market differentiation is between domestic and import consumers. Market segmentation identifies potential consumers and limits the agro-industrial project's options. Thus, it is necessary to select a segment based on competitive environment and the strengths and weaknesses of the company.
Understanding the buying process is needed in designing the marketing plan. Consumers make purchasing decisions in various ways. Low-price items are often purchased on impulse. Purchase of expensive items is frequently planned. Purchasing frequency affects several marketing issues.
Market research identifies common needs, market segments and buying processes to facilitate sound marketing decisions. It involves four steps: data specification, source identification, data collection and data analysis. The private or public marketer must define his or her market information need. After identifying the necessary information, a marketer should locate the information's primary and secondary sources. Data can be collected formally or informally. Formal data collection techniques consist of an explicit research design, statistical sampling and standardised information collection procedures, such as telephone, mail or direct interviews surveys. Data analysis requires interpretation of the information to fit specific informational needs.
Market analysis examines the structure of the market, the basis of the competition, and the institutional constraints affecting the competitive environment. Market structure has been a traditional focal point for the economists studying industrial organisations and competitive environments. Structural examination of a market can begin only by identification of the competitors. Products should be identified with their broad industrial classification.
Competition occurs simultaneously along several parameters. In a perfectly competitive society, price is the prime method of competing. Product quality is the second parameter of the competition. Service is the third parameter of competition. When a new product enters the market place, there are few competitors. As the product matures and differences among brands decrease, the basis of competition shifts more to price.
A capital-intensive processing enterprise with significant economies of scale has a lower cost structure for an on-going producer with a large share of the market than for a new, low volume company. A new company in the market would have difficulty competing with the price of developed company's product.
A marketing plan aims at positioning a firm's product most advantageously in relation to its consumers and competition. Most products have several design options. The product should be designed by the project's marketing and production personnel because marketing identifies the needs for production's designs.
A firm should choose its pricing strategy according to its competitive environment and market segment. The most common pricing strategies are, cost-plus pricing (adding a margin to its costs for non-manufacturing costs and profit), penetration pricing (setting of prices at levels lower than the competition's to enter an existing market), predatory pricing (under-pricing existing competitors to erode their market position severely), skimming (setting high prices to attract the price-insensitive segment of the market), price leadership (prevailing price determined by one firm and followed by others), and administered prices (in the regulated industries and industries with cartels).
The primary tasks in formulating the promotional strategy are deciding whom to reach, what to say, and how to say it. It is directed toward the end user or toward wholesale and retail distributors. Some promotion is intended simply to stimulate primary demand for the category of products. Promotion messages can be communicated to the audiences by direct or indirect methods. Direct methods are face to face encounters. Indirect methods include television, radio, film etc.
Distribution is important in marketing mix because it links the processor to the market place. A processor has to decide between using the distribution services of the existing institutions and undertaking distribution itself.
Marketing mix of a product should be designed to be internally consistent and mutually reinforcing. It must also relate to the company's entire line so that sales will not be diverted from another of the company's product. Integration of the marketing components into an internally consistent whole that is compatible with the company's product line and the other managerial works constitutes the marketing plan.
Demand forecasts are needed to estimate the economic implications of the marketing plan and are used to protect profitability, financial and raw material needs, and plant capacity. Forecasting involves collecting and analysing past data to understand future market behaviour and to reduce the uncertainty of decision making. Forecasts should be made in physical and monetary values, and unit measure should be standardised to facilitate comparisons. Data are most useful when they can be disaggregated to correspond to product categories and market segment characteristics. To ensure reliable projections accuracy of data should be verified. In reviewing demand forecasting it should be carefully seen that the data are sound and forecasting methods appropriate.
Bangladesh has a very good prospect for becoming a leading agro-industrial power if her agricultural base and statistical data can be strengthened, and she can develop an adequate number of marketing experts. Around 22 years back the GOB conducted a project Trade and Industrial Policy (Reform) financed by the World Bank. Only an insignificant part of the said study was actually implemented. The study included strengthening of the statistical base in Bangladesh. Under another World Bank financed project, Matching Grant Facility (MGF), an export financing project assistance was given to promote export/exporters. It may be worthwhile to draw up a plan to attract investors in agro-industries, particularly in the northern part of Bangladesh because such industries are labour intensive, and help indirectly both small and big farmers. Land is available at much lower prices in north Bengal.
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