Marketing our Produce

MARKETING OUR PRODUCE

Vivien L. delos Santos

DA RFO No. 02

Tuguegarao City

March 11, 2013

(Group Marketing, Group buying & saving)

OBJECTIVES

By the end of this session, participants shall have:1. Discussed concept of group marketing

and its advantages and disadvantage to the members;

2. Identified the different marketing channels and the cost of selling produce to these markets;

3. Discussed the importance and advantages of group buying of inputs;

4. Explain the concept of group buying and credit and its advantages and disadvantages.

How many of you have marketed their produce last season?

What marketing channel and outlets you used last season?

Seller BuyerProducts

PRODUCTPACKAGIN

GHANDLIN

GTRANSPOR

TCONSUMER

MARKETING CHANNELS

Farmer100%

Coop

Municipal Assembler

5%

95%

1%

19%

57%

24%

Inter CityTraders &

Millers

Distributor Wholesaler/

Retailer

Consumer

43%

100%

Rice Miller/Reg’l

Assembler

Prov’l Assembler

4%

72%

24%

57%

Marketing Channel

Region 02: Rice Supply Chain Cost StructureFarmers

5.80Farmgate Cost

DistributorsTraders(Coop, Mun’l / Prov’l / Reg’l)

Prov’l / Reg’l Traders/Miller

Milling 1.00

Sacks 0.20

Transport 0.40

Losses 0.20

Hauling 0.20

Interest 0.20

Total 2.20

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 0.20

Hauling 0.20

Interst 0.10

Total 1.10

Handling Cost & Processing = 3.30

Consumer

0.66Distribution Cost

= 9.76

= 14.00

Region 02: Rice Supply Chain Cost Structure

Farmers End-UsersTraders(Coop, Mun’l / Prov’l / Reg’l)

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

Farmgate Price 8.00 Price Paid to Trader 1 14.00

Net Income 3.80 Net Income 2.70 Net Income 3.34

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.

“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?

Different Stages

in marketing produce

PRODUCE PREPARATIO

N

PACKAGING

HANDLING

TRANSPORT

STORAGE

Different stages in marketing produceGROUP

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.

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.

GROUP

MARKETING

In the different stages of marketing the following should be taken into considerations:

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.

A Case Study

Together Each Achieves More

Discuss the following questions in your group:1. What opportunity did Aida and Lorna discover in

the city?2. Which opportunity did they choose?3. What price could Aida get for her corn at the local

market?4. What price could Aida get for her corn at the

market in the city?5. What were the conditions for getting the price in

the city?6. What costs would she have it if she sold her corn

in the coty?7. What did she have to do to meet the conditions?8. What contracts did Aida write out?9. How did things work out?10.What was the difference in profit that Aida and

her partners got by selling in the city?11.What decision did the 4 farmers make about

collective farming in the future?

Review/ Implementation of the Marketing Plan:

1. What market outlets do you plan to sell your produce?

2. Why did you use that market outlet?

3. Present you marketing plans.

Workshop

Your marketing Plans should be able to answer the following:

1.What products are you marketing?

2.Which market outlet will you use?

3.When will you go to the market? What day? What time?

4.What do you need to prepare product for the market?

5.How will you bring the produce to the market?

Your marketing Plans should be able to answer the following:

6. What arrangements do you need to do at the market before you take your produce to the market for sale?

7. How will you record your sales, income and other information?

8. How will you share the transport and marketing costs?

9. How will you divide the income among the members of team?

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?

GROUP BUYING AND SAVING

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

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

Investment 2000Save 10%

200 Weeks/Year 52----------

1yr Savings 10,400

1,00052

----------2yr Savings 52,000

5,00052

------------3yr Savings 260,000

25,00052

-------------4yr Savings

1,300,000

Ability increases as he overcomes shameAbility increases as he learns to sell other products

Ability & resource increase as he learns logistics

Ability & resource increase as he manages business

MANAGING BREAKTHROUGHS

There is enough savings to bear fruit and profit

There are two “breakthroughs” in business and two “breakthroughs” in growing a fruitful plant