1. Aquaculture Marketing

2. Opening Comments  Aquaculture—old in practice, new ag industries  Rapid expansion globally  Development plagued by marketing problems  Main problem: matching production to market needs

3. Opening Comments  Good example: catfish farming  Farmers were well into production before producers and administrators gave serious consideration to market research and data collection  demand was great, so no difficulty selling  market analysis only really began in the 1970’s

4. Opening Comments  This dilemma was also shown by salmon and shrimp industries  failure to understand the market has driven many producers out of business  knowledge is necessary for locating markets for new and established products, for price determinations and for setting quality standards  what has helped is the integration of the quality concept with marketing: HACCP

5. Identifying Markets  Just what is a market? Can be defined in many different ways:  a location: Pike’s Place Mkt., Seattle  a product: jumbo shrimp  a time: September - October catfish market, European Christmas market  a level: retail vs. wholesale

6. Part 1: The Marketing Plan (According to Philip Kotler)  After setting the firm’s purpose and goal, the marketing plan is the starting point for the rest of planning  most marketing plans involve single products or lines of products

7. Part 1: The Marketing Plan  Current situation  Opportunity and issue study  Goals  Marketing strategies  Working plans  Financial studies  Needed controls

8. Current Market Situation 1)market situation: background and current situation wrt consumer needs, likes/dislikes, buying trends; current size and past growth of the total market, sales in various geographical areas 2)product situation: recent history of sales, revenues for a current product 3)competitive situation: size, goals, market share, product quality, marketing strategies present and future of competitors

9. Current Market Situation  Distribution situation: sales made through each type of middleman (brokers, wholesalers, retailer) in the distribution channel (later)  Macroeconomic environment: general economic situation has a bearing on sales (e.g., population figures, economic climate, technology, legal issues, social issues, etc.)

10. Opportunity Analysis (SWOT) 1)strength and weakness study: main ones of the company and product from factors within the firm (?) 2)opportunities and threats analysis: main ones facing the product from factors outside the firm, ranked in order of importance (?) 3)goals: financial and marketing (yearly ROI of 25% vs. 50% increase in sales)

11. Opportunity Analysis 4)marketing strategy: basic approach to achieve goals target markets: what does the consumer need? product positioning: best quality or lowest price? size of product line: number/types of products sold price: compared to other similar ones distribution: how, where and by whom? sales force: size, type, quality

12. Opportunity Analysis (cont) 4)marketing strategy (cont.) level and quality of service advertising: amount needed, worked? sales promotion: ditto… r&d: amount, types, timing, success? market research: amount/types

13. Opportunity Analysis (cont) 5)working plan: once plan is approved, working plan activates marketing plan (who does what, etc.) 6)financial study: forecast of future sales revenue, cost of additional product and personnel 7)controls: feedback mechanisms to measure progress, often quarterly or monthly reports

14. Part 2: Marketing Channels  Refers to the institutional structure in place for movement and exchange of goods  from producer consumer  helps with record keeping to consider movement a “channel”  really regards a flow of information  demand creates flow  if conditions of sale are agreed upon, flow through or “down” the channel starts

16. How can you avoid all this complexity?

17. Avoiding Market Channel Complexity: direct sales!  small quantity of product  transaction does not necessitate intermediary  farmer develops own capacity to handle shrimp

18. Levels of Market Channel Complexity  farmer ---> consumer  farmer ---> retailer ---> consumer  farmer ---> wholesaler ---> retailer ---> consumer  farmer ---> broker ---> processor ---> wholesaler ---> retailers ---> consumer  retailers: hotels, restaurants, institutions

19. Market Channel and Price  As product moves through the channel, the price at each stage is increased in accordance with value added to the product  farmers not often pleased with discrepancy in price between what they received and what consumers pay  difference is the marketing margin or marketing bill (70-80 cents on the dollar)  margin is largely affected by time of sale and price paid for raw product  other factors: governmental price controls, producer organizations, co-ops, type of product, market concentration

20. Length of Channels  Channels can be simple or long and complex  length/complexity depend upon the volume of product moved, number of functions performed, scale of operation at each stage and the distribution system chosen  organization depends upon the type of markets, organization of producers

21. Increasing Market Share  Commercially-reared product is often in direct competition with wild-sourced  also in competition with imports  factors that affect sales must be isolated for farmers to compete  market share is typically increased by monitoring: product, price, promotion and place

22. Product  The key to expanding sales is a premium product  needs a QA/QC department or program  manager must assure that size, taste, packaging and other characteristics are pleasing to customer prior to putting on the market  off-flavor, color, texture and general appearance are key elements

23. Price  To minimize price, the manager will keep processing costs at a minimum  this insures that product price is competitive  in a purely competitive market, price is determined by interaction between demand and supply (REM?)  price often identified in real world by discovery (REM?)  an error in pricing often has serious consequences

24. Promotion  Involves programs to encourage sale and increase market share at any point in the channel by influencing potential purchases  promotion communicates information including product quality, price, and benefits of the product to potential clients  it acts on both the intellectual and emotional state of the buyer  various examples?

25. Place  Distribution of the product to locations used by customers wishing to purchase the product is a market function  sometimes product is transported hundreds of miles from the farm  frozen products are transported the greatest distances  market share is increased by transporting product to places where it has previously been unavailable

26. Homework  Think about the marketing aspects of your hypothetical operation  Where are your markets? Be specific!  What are you going to sell? Why?  How are you going to promote your product?  Outline your marketing channel (simple diagram)  Due in class next week (Tuesday)