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Market Planning

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					Market Planning
Marketing Decision
A marketing plan answers the following
  questions
n When to price
n Where to price
n What form, grade, or quality
n What services to use
n How to price
n When to price and deliver
Steps in Market Planning
•   Specify goals
•   Determine production schedule and volume
•   Estimate production costs
•   Project market prices
•   Make the marketing decisions
Specify Goals
n Sell at top price
n Sell in top 1/3 of price range
n Cover total costs plus growth requirements
n Cover cash requirements
Determine Production Schedule and
Volume
n Timing of production available
  n Harvest
  n Weaning
  n Date off pasture
n Beginning Inventory
  + Production
  - Farm Use
  - Projected Ending Inventory
  = Marketable amount
Estimate Production Costs
n Enterprise and whole farm budget
n Determine breakeven price to cover variable
  costs
n Determine breakeven price to cover fixed
  costs
n Determine breakeven price to cover profit and
  growth
Projecting Price
Factors that influence price
n Demand
n Supply
n Demand and Supply Balance
Systematic Price Variations
n Trends
n Cyclical movements (cattle cycle)
n Seasonal price patterns
Market information and Projections
Factors that influence price
n Demand
n Supply
n Demand and Supply Balance
Systematic Price Variations

n Trends
n Cyclical movements (cattle cycle)
n Seasonal price patterns
Trends
Trends
Seasonality
Seasonality
Market information and Projections

n USDA reports (weekly, monthly, annual)
n Extension forecast reports
n Commodity organizations
n Newsletters (Pro Farmer, Doane, Kiplinger,
  others)
n Private marketing firms
When to Price
n Pricing decision can be separated from
  delivery decision.
n Pre-harvest (forward pricing)
n At harvest
n Post-harvest (storage decision)
Where to Price
n Considerations
  n   Transportation costs
       n   Fuel costs
       n   Shrinkage (livestock)
  n   Services provided
       n   Additional marketing services
       n   Hours of operation
  n   Financial condition of market outlet
What Services to Use
n Especially applicable to input purchases
n Hours of operation, variety of products
  available, repair services, etc.
n Credit terms
n Reputation of reliability
n Patronage dividends of cooperatives
What Form, Grade, or Quality
n Input
   n Bulk or bag
   n Delivered or applied

n Products
   n Livestock
      n Cattle – calves, yearlings, fed

      n Hogs – feeders, finished

   n Crops
      n Hay – Horse hay, cattle hay, ground or pelleted

      n Vegetables – fresh, frozen, juice

      n Grains – feed or food quality
How to Price
n Cash sales
n Hedging
  n Futures market
  n Options market
n Forward contracting
  n Cash forward contract
  n Delayed or deferred pricing contract
Marketing Plans
n Project the amount to be marketed
  n   Beginning inventory + production – farm use –
      ending inventory = marketable amount
n Determine possible marketing methods
  n   Cash sales, futures/options, forward contract
n Determine timing of sales
  n   Triggers by month, by price targets, or other
Marketing plan tools
Summary
n Marketing plan will answer when to price;
  where to price; what marketing alternatives to
  use.
n Marketing plan process involves goals,
  production schedule, costs of production,
  price and timing targets, and a decision.

				
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posted:12/17/2013
language:English
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