Marketing instruments for domestic and export mark

Marketing instruments for domestic or export markets: 

Marketing instruments for domestic or export markets Aad van Tilburg Marketing & Consumer Behaviour Group, WU

Problem definition: 

Problem definition Assume that a producer of perishables, e.g. Fruit in the Amazon region (Brazil) Vegetables in Africa, Asia or Central America Nile perch in Lake Victoria (Ugan, Tan, Ken) is free to sell his products everywhere on the globe, which factors (may) affect the decision where to sell?

Answer: 

Answer Demand characteristics Supply characteristics Governance characteristics of the supply chain Performance of markets and market institutions Supplier’s marketing strategy Supplier’s marketing plan

Consumer demand and its environment: 

Consumer demand and its environment Consumer preferences Taste and quality Opportunities & Constraints: Economic: Purchasing power: Cultural: Habits Religious: Prescriptions Political: Import or export ban, strike

Market segments?: 

Market segments? Differences in taste and quality? Differences in purchasing power? Within the country Among countries Differences in response to marketing instruments, e.g. Price elasticities? Advertising elasticities?

Supply characteristics: 

Supply characteristics Availability: Supply elasticities Supply chain performance Market performance Product differentiation To deliver different market segments

Availability : 

Availability Supply elasticities Inelastic or elastic? Supply chain performance Supply chain Structure: length, power Conduct: governance system, marketing actions Performance: quality and value-added (distribution) Market performance Sufficient competition, market transparency, entry barriers?

Product differentiation and market segmentation: 

Product differentiation and market segmentation Agricultural products differ in size, quality, colour, …….. Exploit variation in natural products Study relevant segmentation bases Link differentiated products to market segments Standardization? Grades and standards Optimal system of grades and standards? Sorting in different product classes

Governance characteristics of the supply chain: 

Governance characteristics of the supply chain Market-based transactions Contract-based transactions Ownership of the supply chain Contractual relationship Transactions based on trust or reputation Voluntary joint planning Hybrid form

Markets and market institutions : 

Markets and market institutions Degree of competition (3 * 3 main types) Degree of product homogeneity Market entry or exit barriers Market information transparency or asymmetry Free or regulated (EU, NAFTA) markets Facilitating institutions on: Trade (brokers), finance (credit), market information (commodity exchange) Transaction discipline among contract partners Enforceability of contracts?

Supplier’s marketing strategy: 

Supplier’s marketing strategy Mission: What type of business? Objectives: Satisfy customers, continuity, sales target, market share target, target for profit or ROI Strategy: How to serve our markets in the long run? Tactics How to serve our markets in the short run?

Supplier’s marketing plan : 

Supplier’s marketing plan Product policy Different product qualities for different markets? Price policy Relative scarcity, value added, competition Distribution policy Single or multi-channel approach? Information communication policy “Managing” demand characteristics

Case1 Nile perch from lake Victoria: 

Case1 Nile perch from lake Victoria Markets: Domestic markets in Uganda, Tanzania and Kenya? Upper class or tourist markets in the region? Export markets in Europe? Market segmentation Export market gives the best prices Governance system: Sot market upstream, contracts downstream Value-added distribution depends on …..

Case 2 Fruit from the Amazon region: 

Case 2 Fruit from the Amazon region Markets: Markets in the South of Brazil? Development of export markets Market segmentation Fresh versus processed Entry barriers, e.g. regulations: EurepGap, British Retail Consortium, Sustainable Agriculture Initiative Governance system Markets or contracts

Case 3 Vegetable marketing in Africa, Asia or Central America: 

Case 3 Vegetable marketing in Africa, Asia or Central America Markets Domestic, export Marketing channels Open (or wet) markets versus supermarkets Market segmentation on Quality class (export, domestic) Freshness Residues Governance system: Markets (domestic), contracts (export)

Research questions: 

Research questions How and where in the SC to change commodities into branded products? Knowledge of (export) market demand Cost structures in the SC Value added distribution in the SC How to develop as SC a multi-channel strategy to serve both domestic and export markets?