1. Dr P S Sahota Ministry of Agriculture Kenya
MARKET – DEVELOPMENT:
A SYSTEMIC APPROACH
Dr P S Sahota
Ministry of Agriculture
Kenya

2. Agenda
Session 1: SETTING THE CONTEXT AND MARKET DEVELOPMENT– A SYSTEMIC VIEW
8.30 to 10.30am
Session 2: MORE ON MARKET DEVELOPMENT
11.00 TO 1.00
Session 3 – REAL SITUATION ON THE GROUND AND KNOWLEDGE MANAGEMENT
2.00 to 4.00 pm

3. SESSION 3 – REAL SITUATION ON THE GROUND AND KNOWLEDGE MANAGEMENT
Agenda
Session 1: SETTING THE CONTEXT AND MARKET DEVELOP0MENT – A SYSTEMIC VIEW
8.30 to 10.30am
Session 2: MARKET EXPANSION AND DEVELOPMENT
11.00 TO 1.00
SESSION 3 – REAL SITUATION ON THE GROUND AND KNOWLEDGE MANAGEMENT
2.00 to 4.00 pm

4. Laying the premise:– The major challenges facing policymakers are:
1. How to design agricultural marketing systems to better serve as a catalyst for farm productivity growth, particularly for smallholders;
2. How to cost-effectively deal with price instability for both consumers and producers in the newly liberalized marketing system in a manner that limits governments’ exposure to political risks;
3. How to develop the commitment to a consistent and stable policy environment to support long run private investment and insulate the new systems from disruptive policy lurches in response to short-term political crises;
4. How to design a process of collaboration between policymakers, donors, researchers, and the private sector to maximize the probability of achieving improved agricultural policy and performance.
One of the most important but least understood lessons of the temporary state-led agricultural “success stories” during the 1980s is the importance of developing sustainable agricultural strategies that can live within their means, i.e., containing their costs within the state’s fiscal resources.

5. a stakeholder approach
Opening thought 1:
a stakeholder approach
“We are both strong believers in the need for substantial aid flows to the world’s poorest countries. We believe equally strongly in the public sector’s role in providing essential services and infrastructure…but we believe that private investment must be the main source of income growth & job creation in poor countries, as it is in industrialized nations…(we need to) identify specific measures that work to unblock the private sector’s potential…when the business potential of the developing world is unleashed, the benefits will be more than economic.”
Paul Martin (PM of Canada) & Ernesto Zedillo (former President of Mexico)
Co-chairs of the UN Commission on the Private Sector & Development which produced the recent report Unleashing Entrepreneurship: Making Business Work for the Poor

6. Opening thought 2: market access!
“I am enormously distressed that 200 million Africans remain hungry and malnourished…we Africans are the ones who must act to meet our food and nutrition needs in a sustainable way… The only way to stimulate and sustain measures to ensure food security, is to make access to markets possible. Agricultural production is only for three purposes: subsistence, commercial or as a hobby. Food production for subsistence only is not sustainable because you cannot feed the stomach only when you have no clothes, no shelter, no income to send your children to school and pay for medical bills…Engaging in Agriculture as a hobby is only sustainable for the rich and idle. Therefore, you cannot talk of sustainable food security without speaking of commercial agriculture, which means market access.”
Uganda President Yoweri Museveni (2003)

7. Sustainable development (Kudumisha)
Sustainable development is generally defined as development that meets the needs of the present without compromising the ability of future generations to meet their own needs.
This is the political definition and the report identifies social and ecological problems as the primary areas of concern, and sees the way society is deploying industry and technology, and distributing their benefits, as both driving and defining these problems.
Our Common Future (the Brundtland report)

8. Evolution of the sustainability agenda
Social
Environment
Economic
Sustain- ability 1 2 3
Millennium Development Goals
Puzzles Problems Messes
(wicked problems,
a system of problems)
Sustainability is concerned with unpredictable futures and this future perspective to sustainability opens up a Pandora's box of uncertainty.
Formulation
Solution
Agreed Agreed Arguable
Agreed Arguable Arguable
Levels of integration
Uncertainty
Structured/semi-structured/unstructured

9. Uncertainty – decision making contexts and problem solving
Rate of change
Low high A
Low uncertainty
(needed information is known and available) B
Moderate uncertainty
(constant need for new information) C
(information overload) D
High uncertainty
(not known what information is required)
(A system of problems,
wicked problems)
Low
Complexity
(number and
diversity of
the elements)
High
puzzle
problem
mess
(Based on Duncan, 1972; Hatch, 1977; Mintzberg, 1990).

10. Uncertainty in decision making in the export sector – EUREPGAP
Uncertainty in decision making in the export sector – EUREPGAP. BUT THERE IS PARADOX HERE!!
Are crop protection products stored in a fire-resistant, well-ventilated, well-lit, and secure location?
Is all crop protection product storage shelving made of non-absorbent materials?
Is the EUREPGAP registered product traceable back to and trackable from the registered farm where it has been grown?
Are keys and access to the crop protection product store limited to workers with formal training in the handlng of these products?
Have soil maps been prepared for the farm?
Has the farmer completed a risk assessment for food safety, operator health, and the environment?
Is a documented waste management plan in place?
Protective clothing is available for all farm workers?
Protective clothing is cleaned after every use?
Is surplus application mix disposed of according to national law?
Is the source of water used for final product washing potable or declared suitable by the competent authorities, through a competent laboratory?
Has an internal, annual self-inspection been documented and recorded?
Are first aid boxes present in the vicinity of all workers?
Is application equipment calibrated and verified on an annual basis?
Are safety and emergency procedures visible within 10 metres of the crop protection product store?
Does the farmer participate in substrate recycling programmes for substrates where available?
Are empty containers rinsed with an integrated pressure-rinsing device?
Does disposal of empty crop protection containers occur in a manner that avoids exposure to humans?
Has a hygiene risk analysis been performed for the entire farm?
Is organic fertilizer stored in an appropriate manner, which reduces the risk of environmental contamination?
Have systematic methods of prediction been used to calculate the water requirement of the crop?
Are breakage-safe lamps in place above the sorting, weighing, and storage areas?
Has an annual risk assessment for irrigation water pollution been completed by a laboratory?
Do farm workers have access to toilets and hand washing facilities nearby?
Have all the crop protection product applications been recorded with product name, crop name, date, and reason for application?
Is the farmer able to provide current evidence of annual residue testing, traceable to the farm?
Is a documented action plan in place if maximum residue levels (MRLs) are exceeded?
Source: EUREPGAP Checklist Version 2.0 Jan-04

11. Competitiveness – the dualistic nature of Kenya’s agriculture sector
Competitiveness is the degree to which a country can, under free and fair market conditions, produce goods and services that meet the test of international markets while simultaneously expanding the real incomes of its citizens (Castells, 1996)”.
It is the requirement for staying in business on a sustained basis (World Bank, 2000).
The fact that Kenya imports substantial quantities of some fresh horticultural produce from its regional neighbours while exporting very little to them suggests that Kenya is less competitive in these products than are her neighbours.
The fact that the country is nevertheless very competitive in international produce markets highlights the dualistic nature of Kenya’s horticultural sector.

12. Competitiveness – the dualistic nature of Kenya’s agriculture sector
The export sector, comprised of a relatively limited number of organized smallholder farmers along with medium- and commercial scale farmers, all of whom receive some level of production and marketing support from private export companies, competes effectively in the highly competitive and quality conscious markets of Europe.
Meanwhile, the domestic sector is comprised of the vast majority of (largely unorganized) smallholder farmers, who receive little if any production or marketing support.
The sector pays very little attention to productivity or quality, and struggles to compete with imported produce primarily from Tanzania.
WHAT CAN WE LEARN FROM THIS DUALITY??
4 things – (i) farming treated as a business, (ii) productivity, (iii) efficiency and (iv) market access

13. Understanding the linkages and relationships
NEED TO TREAT FARMING AS A BUSINESS Farmers face three main sets of challenges as they operate their farm businesses BUT WHAT APPROACH YOU USE MAKES ALL THE DIFFERENCE!!
SYTEMS APPROACH
Understanding the linkages and relationships
A LINEAR APPROACH
(cause – effect approach)
Productivity
Linear
Depends on ecological viability too!!
Efficiency
Linear
Linear
Market Access
CANNOT LOOK AT THESE IN ISOLATION!!!

14. CHALLENGE #1: Farmers are typically operating their farms at very low levels of economic productivity.
Productivity
Farmers are often growing the wrong mix of crops on their farms, or only growing subsistence crops.
Farmers are unaware of proper growing techniques.
Farmers are unable to purchase the required inputs to grow high quantities of top-quality produce.
RESULT:
Disappointing harvests of the wrong crops.
Efficiency
Market Access

15. CHALLENGE #2: The current system of produce distribution and sale is inefficient.
Productivity
Small-farm produce often changes hands 3 or 4 times on the way to the consumer.
Transportation is slow, costly, and wasteful. Communication is person-to-person.
Logistical processes are a major hurdle.
RESULT:
Potential profits drained from all participants, particularly the farmer herself.
Efficiency
Market Access

16. CHALLENGE #3: Farmers are unable to access the right markets at the right time.
Productivity
Farmers operate in information-poor environments regarding prices and market outlets.
Farmers are unable to aggregate their produce at levels required to access the larger markets.
Opportunities to exploit are created for brokers, resellers, and other intermediaries.
RESULT:
Limited choice of market outlets and disappointing net prices.
Efficiency
Market Access

17. But market access comes from market
development!! These are the processes
Stakeholder
driven
THERE ARE ALL UNDERPINNED BY INFRASTRUCTURE
DEVELOP0MENT – BOTH TECHNOLOGICAL AND PHYSICAL
REMEMBER: SYSTEMIC THINKING, NOT LINEAR RELATIONSHIPS; PROCESSES
ARE NOT MUTUALLY EXCLUSIVE; EACH PROCESS IS ALSO AN OUTPUT AND THE
OUTPUT COULD BR ANY OF THE PROCESSES

18. Understanding the linkages and relationships
Market development - a linear and a systemic view
A LINEAR APPROACH
(cause – effect approach)
SYTEMS APPROACH
Understanding the linkages and relationships
Market Research
Market Opportunities
Linear
Linear
Linear
Specific project ownership
Market
development
and access
Marketing strategies
Linear
Linear
Market monitoring
It is a continuous process and leads to market retention!!

19. What is Systems Thinking?
Can help resolve complex situations involving people and things
It helps identify points and processes of intervention. These are often not where they might at first appear
Recognises that people have different ‘perceptions’ - viewpoints and that these affect the ‘system of interest’.
Involves looking at the whole and the relationships and interconnections of parts of a whole rather than the parts alone.
Soft systems: involve human behaviour they are dynamic, complex and unpredictable
Hard systems: are invariably man-made, clearly bounded and relatively predictable

20. Information selection
The systems thinking cycle
Establish the ‘system of interest’ or problem context through the articulation of an issue by the populations concerned - stakeholders
Issue specification
Issue representation
Information selection
Scenario generation
Map this system and identify the range of information, and techniques (disciplinary specialisms) required, to move towards problem diagnosis
Learning from the future
Identify the range of management options (points of leverage) that emerge from the diagnosis
(after Lemon and Longhurst, 1996)

21. Marketing research!!
For the sake of providing some structure to the presentation let
us assume the output is market opportunities
Stakeholder
driven

22. Marketing research – a systemic view!
Market Opportunities

23. AN INDEPENDENT MARKETING CENTRE Why?
The most frequently articulated limitations expressed by government
policymakers are that
the research process is not based on government priority areas but rather follows the interests of researchers;
the research findings can be overly academic, geared for publication in scholarly journals rather than containing practical and concrete options for consideration by government; and
The research process may not be unbiased. Mistrust of the research process might create special problems if it is supported by donors perceived as having an established position or stake in the policy reform process.
the payoffs to policy research have been limited in cases where top policymakers believe they already “know the answers” and have charted a policy course that takes no heed of empirical research findings from the field.

24. AN INDEPENDENT MARKETING CENTRE Why?
un- stated government objectives that are not revealed or taken into account in the research process - creates frictions between the research process and policymakers.
paradox of a high demand for applied policy analysis by senior policymakers coexisting with minimal usage of the analysis produced by government ministries
The research process can be marginalized when its institutional home is placed in low-level units within government ministries or in academic organizations far removed from the circles where policy making really occurs.
Research projects can be designed to jointly develop analytical capacity within key ministries while carrying out research activities through on-the-job training.

25. KAMIC Program Committee
SET UP AN INDEPENDENT KENYAN
AGRO MARKET INFORMATION CENTRE (KAMIC)
KAMIC Program Committee
consisting of  a number independent experts and public officers.
KAMIC Office
Research:
“Information gathering”
Special topics (global trends, consumer behavior, value added processes)
Translating existing
research to policy
Recommendations
Data bases
Packaging and dissemination
“translating research into action”
Advise to farmers and others
Website
Workshops about topical issues in consultation with the MoA.
(involve national academics and can also involve EU and Kenyan students.  
Monitoring and evaluation: based on panels of experts (both from academia and business people in the different countries that import Kenyan products).   
Annual monitors and trends (existing resources)
Short-term monitors (how markets are developing)
Competition benchmarking

26. Collaborative research and ownership
The demand for, and credibility of, food policy analysis to guide market
development is enhanced by a
collaborative research process
driven by local researchers and government analysts who take “ownership” of the research agenda and findings

27. Collaborative research and ownership
Aspects likely to increase government ownership are
a process whereby the research agenda is determined by government, e.g., through a technical committee comprised of officials from various government agencies having a stake in the research findings;
involvement of key policymakers who are able to invest themselves in the research process as liaisons or counterparts:
first, to ensure meaningful Government engagement, and
second, to help steer the findings around potential political difficulties;
(c) the appearance of the research process being receptive to short-term
needs of government, e.g., the preparation of short position papers or fact
sheets as the need arises; and
(d) measures to ensure credibility by those involved in the research process.

28. Also think about:
How stakeholders can be brought into the design, implementation analysis and use of research
Issues of research ethics and integrity
Issues concerning methodological flexibility
How the utility of research (as product and or process) can be sustained without continuous expert involvement
Issues of control / ownership of the research,
Issues of the transfer and dissemination of research
Issues related to understanding the audience for the research and their receptivity (as willingness and ability to respond) to it.

29. Therefore we need to conduct research from an integrative and systemic perspective that:
Does not make premature (disciplinary driven) assessments about what constitutes a problem or issue or the scale(s) at which it occurs
Manages the range of contributory disciplines and integrative skills to evaluate what is an appropriate methodology for any problem context
Accepts, and works with, different perspectives and cultural contexts (receptivity, sense of audience and meaningful stakeholder engagement)
Produces useful output for the problem owners

30. Agenda
Session 1: SETTING THE CONTEXT AND MARKET DEVELOPMENT– A SYSTEMIC VIEW
8.30 to 10.30am
Session 2: MORE ON MARKET DEVELOPMENT
11.00 TO 1.00
SESSION 3 – REAL SITUATION ON THE GROUND AND KNOWLEDGE MANAGEMENT
2.00 to 4.00 pm

31. Specific project ownership
Stakeholder
driven

32. Specific project ownership
Marketing strategies

33. What role can the Ministry play with private sector in its development
Identify the kinds of government actions shown to impede private sector investment in the past.
Develop a better understand how to stimulate investment in the food system by the private sector.
Identify the kinds of incentives do the private sector positively respond to
Develop a more consistent and stable policy environment to encourage private sector investment?
Approach the concept of market reform as a continuous process
Design innovative new forms of collaboration between policymakers, donors, researchers, and the private sector.

34. Marketing strategies
Stakeholder
driven

35. Marketing strategies
Market
monitoring

36. MARKET EXPANSION STRATEGIES
Market Penetration Strategies
- Growth by increasing sales of current products to current market segments without
changing the product.
- Existing products in Existing markets.
- Export of cash crops (Coffee, Tea etc).
Product Development Strategies
- Growth by offering modified or new products to current market segments.
New product in Existing Markets.
Market Development Strategies.
- Growth by identifying and developing new market segments for current products.
New markets for Existing Products.
Diversification Strategies.
- Growth through starting up or acquiring businesses outside current market segments.
- New Markets New products

37. MARKET STRATEGY CONCEPTS
Market Segmentation
Dividing up of a market into distinct groups of buyers with distinct needs ,
characteristics or behavior who might need separate products or marketing mixes.
Market Segment
Group of consumers responding in a similar way to a given set of marketing efforts.
Target Marketing
Process of evaluating each market segment’s attractiveness and selecting one or more segments to into.
Market Positioning
Arranging of the product to occupy a clear, distinctive and desirable place relative to competing products in the minds of target consumers.

38. Some barriers to market development
Market reform has NOT been CONTEXT SPECIFIC
fiscal crisis and pressure from international lenders have been the principal driving forces behind food market reform.
Result
policy reversals, state interventions, and inconsistent policy directives have characterized the reform process.
this underscores the fact that many government decision makers have not accepted the premise of the reforms and still mistrust the workings of markets.
Lack of personal experience
this might be understandable given that until recently almost no one has experienced a market-oriented food system in his/her lifetime.
Lack of understanding market dynamics
Lack of commitment
- the reform process, having been initiated under external pressure, is being managed by policymakers with varying levels of commitment to, and understanding of, the process
This environment has clearly dampened the private sector’s response to market reform
Dependency syndrome
a culture of dependency has developed due to poor thought out strategies of govts and NGOs

39. Some barriers to market development
Government interventions
In Mozambique at the national level, policymakers have largely understood this fact, and have not generally imposed restrictions on trade, nor has the government played any direct role in imports of maize since the ending of maize food aid shipments in – result: good market development despite poor infrastructure development.
Contradicting policies
While stabilizing food prices for consumers is a policy objective of fundamental importance, a key challenge is how to meet these objectives in a manner compatible with other important food policy objectives – in other words a systemic approach!
Lack of clarity over role of private sector
Food policy environment is characterized by a lack of clarity over the role of the private sector and its incentives to invest in the marketing system, despite being liberalized in other important respects.

40. Some barriers to market development
Undue focus on self-sufficiency
policy emphasis on “food self-sufficiency” rather than encouraging regional trade and comparative advantage – and making the infrastructural and developmental investments necessary to take advantage of this approach.
Outdated legal and regulatory frameworks
the legal and regulatory frameworks of the controlled systems are still largely intact, thus providing scope for the re-imposition of price controls and trade restrictions.
Link between policy makers and their core skills
Policy is determined more by personal perceptions and training rather than on sound reasoning.
Cultural barriers
Talk more on this when looking at wholesale markets
Lack of entrepreneurial spirit
Worsened by dependency syndrome – no understanding of risk and business principles

41. Interventions Improve information flows and improve decision making
markets function more efficiently with information.
This might be addressed through a public information system that would allow traders to make decisions with reasonable knowledge.
Establish an accurate monitoring system
Continued monitoring of the agricultural policy environment and on-going local research capacity to identify emerging or re-emerging bottlenecks in the system
A collaborative process of policy analysis
design a collaborative process of policy analysis and interaction between policymakers, researchers, donors, and the private sector to maximize the chances of improved agricultural policy formation
Public investment
Encourage public investments and policy change that reduce the costs of distribution – internally, between countries in the region, and with the wider world market

42. Interventions Establish local analytical units
Local analytical units are often seen as bringing more local knowledge to the analysis, being less ideologically driven, and having greater sensitivity to domestic policy concerns than analysis conceived and driven by donor interests using expatriate analysts.
Improve research
a relatively neglected aspect of research on food market reform has been its effects on the distribution of prices faced by consumers.
Improve and maintain infrastructures
a considerable part of the food price instability is due to the high cost of transportation, which raises the price wedge between import and export prices
Integrate regional markets
Integrate regional markets through encouraging private cross-border trade.

43. Interventions Improve terms and conditions
Improve terms and conditions producers face from the buyers such as contracts that
reduce risk, limited payment periods to cut the financial burden, and so on.
Education and entrepreneurial spirit
Educate small farmers themselves in risk management, product diversification, value
added, and marketing expansion, to take advantage of the important opportunities
provided by the markets – domestic and export.
Embrace change
Address the knowing-doing gap
Establish of sectoral codes of good practice in regard to food safety measures
Improve market outlets – define clearly roles of HCDA, Kari, Kephis
Clarify marketing roles (e.g. also handled by Ministry of Cooperative Development – conflict??
Have ears on the “ground”
Listen to operation staff.

44. Positive government actions to reduce price instability is needed
These investments include:
improving the transport infrastructure;
promotion of regional trade;
market information systems that are expanded to include information on prices across borders, exchange rates, and trade flows;
Improved communication infrastructure;
nurture the development of market-oriented mechanisms (e.g., commodity exchanges) for handling price risk; and
alleviating the constraints on private access to foreign exchange.

45. Make investments with high payoffs
Examples of investments with high payoffs include
the strengthening of regional market information systems, reporting local currency prices, exchange rate information, and the direction of trade flows for a number of market towns across countries;
development of better telecommunications and internet infrastructure between market information reporting services
(3) rehabilitating regional road, rail and port infrastructure; and
(4) providing the means for smallholders to benefit from market-oriented mechanisms of absorbing price risk, such as commodity exchanges.

46. Market Development:- wholesale markets
Wholesale markets are defined as physical places where professional agents congregate to buy and sell physically present products from/to other professionals.
The functions of wholesale markets considered in the economics and management literature include:
physical functions (gathering food products in a single spot helping the distribution of flows from scattered sources, storage, grading, delivery) and
economic functions (favouring stakeholders’ information and competition, banking).
There are two main types of wholesale markets;
In rural areas, assembly wholesale markets collect food products from producers and gather them in bulk.
On the other side of the food supply chain, terminal wholesale markets in urban areas de-bulk large shipments of products to sell to other institutional stakeholders who then retail to or prepare food for the general public.

47. Conclusion of research
Stakeholder
driven
Conclusion of research
(review of selected studies and visits to wholesale markets in Europe Paris, Rotterdam, London, Verona))
Led us to the following conclusions.
The characteristics and dynamism of wholesale markets are highly variable from one city to another.
These variations can be related to several factors :
(i) the structure of final distribution, with variable importance of supermarkets, stores and restaurants, which makes the physical function of wholesale markets varyingly useful.
In England the role of supermarkets in final distribution of fresh foods (e.g. fruit and vegetables) is much higher than in the other countries visited, with corresponding lower role of wholesale markets.

48. Conclusion of research
Stakeholder
driven
Conclusion of research
(review of selected studies and visits to wholesale markets in Europe Paris, Rotterdam, London, Verona))
ii) The ability of market managers to adapt to changes in demand, in particular of offering a diverse range of products and food safety guarantees.
For example, the traditional compartmentalisation of wholesale activities in London on different sites for different products may help explain their dwindling activity, whereas one-stop wholesale markets on the continent supplying their customers with everything they need has prevented these markets from losing too much market share to the cash-and-carry shops.
Furthermore, a proactive regulatory environment, the switch to high quality produce and a strong public relations policy has also sustained sales from the Rungis wholesale market to its Parisian customers who demand high quality and traceability for their regionally specific food.
These factors are themselves strongly influenced by cultural factors.

49. Conclusion of research
Stakeholder
driven
Conclusion of research
(review of selected studies and visits to wholesale markets in Europe Paris, Rotterdam, London, Verona))
There is empirical evidence that wholesale markets are effective physical
institutions particularly when farmers are not very market oriented (another
Paradox!!
Subsequently, their share of fresh food trading diminishes:
when farmers get more market oriented and can contract direct with supermarkets or
through loss of consumers in vertically co-ordinated and integrated marketing systems.

50. Conclusion of research
Stakeholder
driven
Conclusion of research
(review of selected studies and visits to wholesale markets in Europe Paris, Rotterdam, London, Verona))
With economic development accelerating, and food security goals having been overtaken, the market for food shifted from a supply market to a demand market.
The new role of food distribution was to find what the customer wanted.
Food quality issues became more important and some wholesalers had problems adapting to these new market conditions, thus losing significant market share to supermarkets.
In contrast, in Southern Europe where “regional food culture” is still seen as more developed, supermarkets did not manage to gain as much market share on fresh food sales.
Today many farmers, and some governments consider middlemen and food wholesalers as creating unnecessary bottle-necks in the food distribution system.

51. Stakeholder
driven
Market opportunities
Their basic function of providing food to has not disappeared.
small retailers,
catering firms and
institutional customers in the city centres
Indeed, small retailers continue to supply food daily:
to city folks who cannot or do not want to shop in suburban hypermarkets;
to city folks taking lunch in restaurants and canteens, which is also a growing trend in many busy European cities
other secondary wholesalers or wholesaler-retailers delivering to other locations than the city nearby.
HOW??
Engage in value added activities and processes and enter the supermarket value chain. Including non-specific value added (organic farming)
Introduce quality mechanisms
Marketing and merchandising. With their extensive knowledge of their suppliers’ products and their customers’ demands, wholesalers can provide the key link between the two.
Consolidate products – one stop.

52. Specific ownership An example
Stakeholder
driven
Specific ownership
An example
Ten of the German wholesale markets have joined in an Association of Promotion of the Interests of German Wholesale Markets.
However, there is no single management model of wholesale markets in the country:
some are owned by city councils,
some are joint companies between city council and traders,
some are companies belonging to the traders of the market,
others are owned by co-operatives of traders.

53. Specific ownership An example
Stakeholder
driven
Specific ownership
An example
In Spain, the network of 22 wholesale markets sell mainly fresh produce, but some markets in the network also trade fish, flowers and meat.
These markets cover a total of over 700ha of land area, of which 100ha is wholesale trading space.
Around 3,600 companies including 2,600 wholesale firms work in this network and the markets are visited by more than 16 million vehicles per year, which is equivalent to around 44,000 cars per day!!

54. Marketing strategies to:
Stakeholder
driven
Marketing strategies to:
Adapt to new distribution powers by supermarkets.
Supply other stakeholders: restaurants, hotels, hospitals and other catering firms – i.e. institutional customers – as opposed to the final consumer.
Supply the downstream part of the marketing chain with products adapted to the customers’ demand
achieve efficiencies in transport (shorten transit period), introduce chilling facilities, introduce quality controls in de-bulking, inclusive stocking and handling and processing (basic packaging and cutting can be done by some merchants in order to further satisfy specific customer requirements.
For example, peeling, cutting and packaging of selected vegetables, either for the retail market or for caterers). VALUED ADDED INCLUDING NON PHYSICAL VALUE ADDED
offer improved and reliable delivery services. This is a growing service offered by wholesalers to their customers in the city centre or in its periphery.

55. suggested indicators of wholesale market activity
Market monitoring:-
suggested indicators of wholesale market
activity
Stakeholder
driven
Five indicators have been selected to provide a snapshot of activity and performance.
Most of them are quite easy to gather as market authorities generally use them to monitor market activity on an on-going basis.
Market surface
the measure of the land surface gives a clear indication of the scale of activity,
Number of companies and occupancy rate
These indicators look at the attractiveness of the market and its activity.
Daily entries into the market
This indicator is also useful to measure the attractiveness of the geographical position of the market and its business-making conditions.

56. Suggested indicators of wholesale market activity
Stakeholder
driven
Estimated yearly sales in the market
This indicator is most useful to measure the activity on the market in value as well as its development if several such figures are available throughout time.
Ratios per surface unit
All the indicators above can be divided by the market area to give new indicators as a value per hectare of the market land.

57. Market retention :-a continuous process of market development!
Stakeholder
driven

58. An overview of key factors in the development of wholesale markets.
Stakeholder
driven
This overview of four of wholesale markets highlights some important issues with respect to the key barriers to the development of wholesale markets in Europe
First, the structure of final distribution, with variable importance of supermarkets, stores and restaurants, is a key-factor in the development of wholesale markets.
Second, the capacity of wholesalers and wholesale market authorities to react quickly to changes in the demand of customers is essential to ensure continuous development of the wholesale institution.
Third, proactive regulations favouring the small independent wholesale and retail businesses in and around city centres can greatly help new markets develop.
Finally, where private and public stakeholders are prejudiced against wholesaling, there are sure to be some drawbacks.

59. SESSION 3 – REAL SITUATION ON THE GROUND AND KNOWLEDGE MANAGEMENT
Agenda
Session 1: SETTING THE CONTEXT AND MARKET DEVELOPMENT – A SYSTEMIC VIEW
8.30 to 10.30am
Session 2: MORE ON MARKET DEVELOPMENT
11.00 TO 1.00
SESSION 3 – REAL SITUATION ON THE GROUND AND KNOWLEDGE MANAGEMENT
2.00 TO 4.00 PM

60. Rice case study

61. Rice case study

62. Aims and learning outcomes
The aim of these sessions is to introduce knowledge management as a dynamic and fundamental component of organisational success (AND MARKETING!!!)
To appreciate the value of intellectual capital in organisations
To differentiate between data, information and knowledge
To recognise the value of systemic thinking as central to knowledge management
To be aware of core concepts in knowledge management and organisational learning:
tacit and explicit knowledge
single and double loop learning
communities of interest and practice
To understand some of the core models and practical tools of
knowledge management

63. The components of Intellectual Capital
Corporate intellectual properties will be more valuable than their physical assets in the 21st Century (Joel Barker, Futurist, Infinity Limited)
Intellectual
Capital
Customer capital
Customer’s perception of value from doing business.
The depth (penetration), width (coverage), attachment (loyalty) and profitability of customers
Human capital
The knowledge that each individual has, and generates.
The capability of individuals to provide solutions to customers.
Organisational / Structural capital
Knowledge that has been captured within the structure, processes and culture of an organisation.
The capabilities of the organisation to meet market needs.
Intellectual capital = Human capital + organisational capital + customer capital
Enterprise = Tangible Assets + Intellectual Capital
(Adapted from Saint-Onge, 1996; Petrash, 1996)

64. Areas of knowledge
The acquisition of skill or know-how implies the physical ability to produce some action. This is captured in routines, techniques and tools e.g. operating machinery, invoicing procedures
The acquisition of know-why implies an ability to articulate a conceptual understanding of an experience - paradigms, perspectives, assumptions etc. It is the big picture of things.
Know-what refers to the activities that are required to complete a task
e.g. the information necessary to make a decision or the things that need to be in place before making something.

65. Know-who is the “I know a man who can” factor
Know-who is the “I know a man who can” factor. It is knowledge about relationships, contacts, competencies, networks etc. that are necessary to undertake a task.
Know-where is the ability to navigate through – select the right information. Scanning and networking
Know-when is the sense of timing. When is the best moment to instigate, change or end something.
Collison and Parcell (2001)

66. Types of Knowledge - tacit and explicit
Tacit and explicit knowledge are complementary in the creation of knowledge
Explicit Knowledge
Can be expressed in formal and systematic language - it is articulated knowledge
Can be shared, communicated and diffused in the form of data, formulae, procedures, manuals, specifications etc.
Can be processed stored and shared relatively easily

67. Tacit Knowledge
Is the implicit knowledge used by organisational members to perform their work and to make sense of their worlds - it is unarticulated knowledge.
Is hard to verbalise because it is expressed through action – based skills and cannot be reduced to rules and recipes or easily captured, stored and distributed.
Is embedded in individual experience and involves intangible factors such as personal belief, perspective and values.

68. Information and data
Data arrives in our lives and on our desks as dispersed elements (Saint-Onge, 1996)
It is messy, unstructured and unique
Information is data that has been compiled into meaningful patterns.
New information influences the expectations of the recipient e.g.
it will affect the potential for passing an exam
it will affect the potential for extending a product’s market
Data and information are not knowledge

69. From data to wisdom Explicit Data Dispersed elements Information
Tacit
Source of
interpretation
(After Saint-Orange, 1996)
Data
Dispersed
elements
Depth of
meaning
Information
Patterned data
Wisdom
Explicitly knowing how to generate, access
and integrate knowledge
Knowledge
Validated platform
for action

70. Knowledge management
is a way of increasing intellectual capital and achieving
competitive advantage through:
better product performance - using knowledge of what has happened to make product and service improvements
faster reaction to changing markets - better understanding of customer perceptions alongside improved internal communication
reduction in wasted effort and resources - resulting from improved internal communication and understanding

71. Organisational learning
Increases an organisation’s capacity to take effective action (Kim, 1993).
It is the acquisition, creation and transfer of knowledge and the modification of behaviour to reflect new knowledge and insights (Macdonald, 1999).
It requires:
A respect for wisdom:
As an attitude - both questioning and appreciative - towards the values, knowledge, information and skills that are held within the organisation. For example recent downsizing has often stripped out corporate memory rather than removed excess ‘fat.
(Eden and Ackerman, 2001 p74)

72. Organisational learning also requires:
An appreciation of systemic properties:
The understanding that organisations are complex and operate in a complex environment means that we need to look at the relationships within and between systems and their environment.
Complex and complicated as dynamic and detailed complexity. The former is grounded in uncertainty, the latter assumes some predictability and the ability to ‘deconstruct’ - for example a complicated machine.
Respect for multiple perspectives:
There are inevitably going to be different views and competencies within an organisation. Accepting that these will lead to conflict and increase complexity should not lead to their control or ‘averaging out’. Consensus and creativity do not sit together easily.

73. Organisational learning requirements (contd)
Appreciating the dilemma of alignment versus differentiation: Learning to align thinking and action or learning to learn. This also involves the need to incorporate variation in perspective and outlook alongside open communication, the facility to question and the trust required for this to occur.
Identification and questioning of key assumptions:
The communication of the core assumptions of an organisation is important as is the need to continually question them and to learn from that process. This also requires trust and openness.
A willingness to experiment with ideas, thinking and action:
The process of learning from action through reflection combined with appropriate opportunities for adaptive behaviour. Trust is again a key factor.
(Eden and Ackerman, 2001)

74. Types of learning
Single-Loop learning (maintenance learning) adapting behaviour to the existing norms of an organisation
Double-Loop learning (innovative learning) - Paradigms shifts, changing perspectives, challenging deeply held assumptions etc.

75. Single and double-loop learning
Step 1
Step 2
Step 3
Single-loop learning - detect and correct error according to a given set of operating norms
Step 2a
Step 1
Step 2
Step 3
Double-loop learning - ‘reframing’ a problem by questioning the relevance of the given operating norms
(Morgan, 1997)
Step 1: sensing, scanning and monitoring the environment
Step 2: compare step 1 against operating norms
Step 2a: consider the appropriateness of those operating norms
Step 3: initiate appropriate action

76. Levels of knowledge
Individual - is the fundamental unit for knowledge creation, storage and use
Group - informal and formal networks are usually an intangible but important knowledge asset. Shared experiences often represent a cumulative body of knowledge.
Organisational - embodies the cumulative body of knowledge
Knowledge links - facilitate the exchange of knowledge between organisations (e.g. suppliers and customers).

77. Disablers of knowledge management
Thinking of knowledge management as an IT problem - people are not computers and organisations are not machines
Information overload - flooding the organisation with information it cannot digest
Ignoring tacit knowledge - because it is harder to manage / codify
Not treating knowledge management as fundamental to the organisation - leaving the process to staff initiative
Failure to think of the organisation in systemic terms / as a whole - accepting variation and uncertainty rather than trying to control it, over confidence in the value of rules, procedures, benchmarks etc.

78. Enablers of knowledge management
The appropriate use of Information Technology
A culture with knowledge acquisition, assimilation and dissemination at its core
A systemic view of the organisation - thinking of it as a whole rather than disparate parts
Trust and empowerment
Communities of practice
Formal and informal networks - for scanning etc.

79. THANK YOU