1. Vivien L. delos Santos DA RFO No. 02 Tuguegarao City March 11, 2013
Marketing our Produce
(Group Marketing, Group buying & saving)
Vivien L. delos Santos
DA RFO No. 02
Tuguegarao City
March 11, 2013

2. OBJECTIVES By the end of this session, participants shall have:
Discussed concept of group marketing and its advantages and disadvantage to the members;
Identified the different marketing channels and the cost of selling produce to these markets;
Discussed the importance and advantages of group buying of inputs;
Explain the concept of group buying and credit and its advantages and disadvantages.
This session has a significant role to develop a farm business plan. We will be exploring the different parts of the business plan and will also learn how to complete the business plan format.

3. How many of you have marketed their produce last season?
What marketing channel and outlets you used last season?

4. Seller Products Buyer MARKETING CHANNELS PRODUCT PACKAGING HANDLING
TRANSPORT
CONSUMER
MARKETING CHANNELS

5. Distributor Wholesaler/
Farmer
100%
Coop
Municipal Assembler 5%
95% 1%
Marketing Channel
19%
57%
24%
Inter City
Traders &
Millers
Distributor Wholesaler/
Retailer
Consumer
43%
100%
Rice Miller/
Reg’l Assembler
Prov’l Assembler 4%
72%
24%
57%

6. Prov’l / Reg’l Traders/
Region 02: Rice Supply Chain Cost Structure
Traders
(Coop, Mun’l / Prov’l / Reg’l)
Farmers
Distributors
5.80
Farmgate Cost
0.66
Distribution Cost
Handling Cost & Processing = 3.30
Seeds
0.37
Fertilizers
1.26
Insecticide
0.36
Labor
1.63
Irrigation fee
0.23
Threshing & harvesting
1.20
Drying
0.06
Hauling
0.10
Sacks
0.20
Interest
0.39
Municipal Traders
Sacks
0.20
Transport
0.40
Losses
Hauling
Interst
0.10
Total
1.10
Prov’l / Reg’l Traders/
Miller
Milling
1.00
Sacks
0.20
Transport
0.40
Losses
Hauling
Interest
Total
2.20
= 9.76
= 14.00
Consumer

7. Region 02: Rice Supply Chain Cost Structure
Traders
(Coop, Mun’l / Prov’l / Reg’l)
Farmers
End-Users
Farmer
Traders 1 &2 / Miller
Wholesaler/Retailers
Farmgate Price
8.00
Price Paid by Wholesalers
14.00
Price Paid by Retailers
18.00
Farmgate Cost
5.80
Handling Cost & Processing
3.30
Handling Cost
0.66
Price Paid to Trader 1
Net Income
3.80
2.70
3.34

8. When marketing produce, it is also important to understand marketing costs. Understanding these costs will assist farmers to select marketing outlets that generate better returns to them.

9. “Marketing Costs”
What kind of produce did you sell?
How did you bring the product to the market?
Did you prepare your produce in a special way?
Did they use packaging?
How the selling was organized at the market?

10. PRODUCE PREPARATION
Different
Stages
in marketing
produce
PACKAGING
HANDLING
TRANSPORT
STORAGE

11. Different stages in marketing produce
GROUP
MARKETING
PRODUCE
PREPARATION
This involves cleaning, sorting, and grading
PACKAGING
The type of packaging used may range from simple jute bags to plastic packaging for the direct transport of product to the consumers.
HANDLING
Products are handled several times on their way to the market. Handling includes loading & unloading, re-packing, weighing, etc.

12. Different stages in marketing produce
GROUP
MARKETING
Transport
Costs are incurred by farmers when they take the produce to the market. These costs maybe payment s to a transporter or may also be include running costs of farmer’s own transport.
Storage
Products that are not sold immediately are usually stored. It is an important cost for many product. The main purpose of storage is to extend the availability of produce over longer period than if it were sold immediately after harvest. The assumption behind storing produce for the market is that the price will rise enough while the product is being stored to cover the cost of storage.

13. In the different stages of marketing the following should be taken into considerations:
GROUP
MARKETING
Losses
Losses include of weight in storage and transit, loss of color, shape, bruise, over ripping, etc. The cost of these is measured by cash paid out. It is measured by loss of income.
Other Marketing
Cost
Other marketing costs include fees, commissions and others.

14. Together Each Achieves More
A Case Study
Together Each Achieves More

15. Discuss the following questions in your group:
What opportunity did Aida and Lorna discover in the city?
Which opportunity did they choose?
What price could Aida get for her corn at the local market?
What price could Aida get for her corn at the market in the city?
What were the conditions for getting the price in the city?
What costs would she have it if she sold her corn in the coty?
What did she have to do to meet the conditions?
What contracts did Aida write out?
How did things work out?
What was the difference in profit that Aida and her partners got by selling in the city?
What decision did the 4 farmers make about collective farming in the future?

16. Workshop
Review/ Implementation of the Marketing Plan:
What market outlets do you plan to sell your produce?
Why did you use that market outlet?
Present you marketing plans.

17. Your marketing Plans should be able to answer the following:
What products are you marketing?
Which market outlet will you use?
When will you go to the market? What day? What time?
What do you need to prepare product for the market?
How will you bring the produce to the market?

18. Your marketing Plans should be able to answer the following:
What arrangements do you need to do at the market before you take your produce to the market for sale?
How will you record your sales, income and other information?
How will you share the transport and marketing costs?
How will you divide the income among the members of team?

19. Was the price fair?
What was the basis for deciding the price?
Who conducted the marketing?
How long did it take to market the produce?
How was the product packaged?
What challenges did you face in marketing the product?
What will you do differently next time you market the product?

20. Group buying and saving

21. Describe your experience in buying inputs and equipment from other farmers, dealers, suppliers, retailers, and manufacturers.

22. Assessing group buying
Advantage
Disadvantage
Increase bargaining power
Possibility of over-centralization
Improves economies of scale
Loss of individual flexibility
Lowers transaction costs
Levies and feed for the group
Better prices
Exploitation of weaker members
Combined small surplus can access transport to the market
Forced to accept prices of the group
The smallest producer can sell at the price at international marketing networks
sharing risks
encourages innovations

23. Managing Breakthroughs
Investment
Ability increases as he overcomes shame
Save 10%
Weeks/Year
1yr Savings ,400
Ability increases as he learns to sell other products
1,000 52
2yr Savings ,000
Ability & resource increase as he learns logistics
5,000 52
3yr Savings 260,000
Ability & resource increase as he manages business
25,000 52
There are two “breakthroughs” in business and two “breakthroughs” in growing a fruitful plant
4yr Savings 1,300,000
There is enough savings to bear fruit and profit

24. Salamat Po