Description
Ch – 09 Tools for Marketing Decisions in Agribusiness
Importance of Marketing Tools •
These tools are highly sophisticated and involve complex mathematical models and extensive marketing information systems. These tools use an information-driven approaches to market planning. Four broad sets of tools: –
The Marketing Audit
–
Competitor Analysis
. .
Sales Forecasting Customer Analysis
Importance: 1. To assist the agri-marketers in the market planning process 2. To play an important role in conducting SWOT Analysis 3. To evaluate phase of the market planning process
The Marketing Audit • It is an objective examination of a company’s entire marketing Program • It examines the firm’s marketing objectives and its plan for accomplishing these objectives in light of its resources, market conditions and its distinctive strengths and weaknesses. • Marketing Audit Procedure (As shown in Figure)
Gap Analysis Desired Performance Performance Current Trend
Time
Performance Gap
Sales Forecasting Sales forecasting involves estimating sales in dollars and physical units as accurately as possible for a specific period of time Importance of Sales Forecasting: • • • • •
Raw materials purchases are based on expected sales Potential function of hiring and firing in greatly influenced Cash needs are based on sales forecasts Capital Investments in new facilities are determined The allocation of resources to research and development is heavily based on the expected sales • Great majority of management decisions and entire planning • process rests squarely on forecasted sale
Types of Sales Forecasting 1 General Economic Forecasts: It covers all broad factors ( such as Government farm programs, inflation, the money supply, international affairs, exchange rates, interest rates, population demographics) that affect the total economy
2 Market Forecasts: •
• •
Forecasts for specific industries or types of products, are based on general economic forecasts and a great deal of information about specific industry involved In food business, demographic data is studied to forecast demand for specific products Demographic factors such as family size, age, income level and education tell market researchers about what kind and how much of specific types of food products will be purchased in a region
Types of Sales Forecasting 3 Specific Product Forecasts: The actual sales forecast for a specific product within the firm is driven in part by the general economic forecast and the market forecast
A) Trend Forecast Method that involves projecting sales objectively based on past trends and then adjusting these projections subjectively to take into account the expected economic, market and competitive pressures
B) Build-up Forecast It is constructed by asking sales people to develop detailed sales forecasts by customer surveys and test panels for each of their major accounts
C) Delphi Approach A panel of experts is asked to develop a forecast for the area of interest, these estimates are pooled, reviewed and differences across the experts studied. Test market provides useful way to collect data on sales
Competitor Analysis One effective method for analyzing competition in completing a formal strength and weakness analysis for each competitor
Step by Step Competitor Analysis: 1. This tool simply involves listing the key strengths and weaknesses of a competitor in the same way firm strengths and weaknesses were analyzed earlier 2. The marketer then focuses on the opportunities or threats each competitor presents 3. The final step in using this information is to develop a marketing strategy that capitalizes on the competitor’s weaknesses and takes advantage of any opportunity that competitor vulnerabilities present
Analyzing Customer Needs A variety of tools are available to understand the needs of customers and their prospects
Tools: 1. 2. 3. 4. 5. a)
Personal Interviews Telephonic Interviews Written Surveys Focus Group Techniques Internal Data Analysis Transaction Data Analysis It is sorting of customers by their sales volumes to help a firm understand the composition of its portfolio of customers b) Market Mapping To analyze the sales volume in a small agribusiness to be concentrated in limited geographical areas
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