MARKETING IN AGRICULTURAL BUSINESS: A SHIFT IN PERSPECTIVES AND APPROACHES
FEATURES OF THE INDUSTRY
The agro-industrial complex of many countries consists of two large groups of participants. The first are agribusinesses that produce the final agricultural product, namely grains, vegetables, fruits, meat, milk, etc. The second are market participants who provide the first group with everything necessary for farming, namely seeds and other planting material, fertilizers and other chemicals, feed and medicines, machinery and components, logistics and storage, equipment and technology, etc.
Both the first and the second type of market participants require a clear marketing strategy and a developed marketing mix to achieve commercial success. However, if the marketing strategies of agricultural producers are mostly aimed at large processing enterprises and exports, then the marketing of the second type of market participants, those who supply the first with everything necessary, directly depends on the worldview of the former. In other words, all suppliers in the agricultural market must consider how farmers perceive communication channels, how they receive and analyze information, and on what factors they base their decisions to choose a supplier of seeds, fertilizers, machinery, and everything else.
Until recently, the agricultural sector was considered conservative in terms of marketing, where new technologies and marketing promotion methods significantly differ from other economic sectors. Even now, some authors emphasize that agribusiness marketing should be built around elements such as word of mouth, watching the neighbor, and copying the actions and approaches of major market players.
This is partly true, but in our opinion, reality is inevitably changing. After the transition to state-of-art planting material, machinery, equipment, and technologies, agribusinesses are gradually moving to modern management practices, commercial activities, and marketing. This involves a change in the worldview of the owners and approaches to business processes, ways of obtaining information, and decision-making. EXTERNAL FACTORS
In addition, it is necessary to understand that the agro-sector is a very complex area of activity where a large number of external factors affecting the business must be taken into account when planning a marketing strategy. Here are some of them:
- Seasonality and weather conditions. The cultivation of most agricultural crops depends on natural factors such as climate and weather. This leads to the seasonal nature of the agricultural market, where demand and supply of products can change significantly throughout the year. Unstable weather conditions can affect yield and profitability.
- International influence. Many countries are exporters or importers of agricultural products. Global markets and commodity prices can significantly affect the domestic agricultural market. Furthermore, the protectionist policies of most countries regarding agricultural production also have a significant impact.
- Dependence on government policy. The agricultural sector often depends on government subsidies, financial support, energy tariffs, customs rules, and other state regulations. In countries with unstable legislation, there is a risk of rapid changes in agribusiness conditions, which can have negative consequences.
- Long cultivation periods. Growing most agricultural crops and animals requires significant investments of time and resources. This makes the agricultural sector less flexible compared to other industries.
- Technological innovations. Recently, the role of technological innovations in agriculture has increased. Modern technologies in farming and animal husbandry depend on increasing productivity and efficiency, reducing costs, and improving product quality.
- Competition and cooperation. The agricultural sector can be characterized as a competitive environment among agribusinesses. However, at the same time, real cooperation among farmers is possible, which distinguishes the market from other sectors.
- Demand for organic and natural products. Consumers' understanding of the importance of organic, natural, and environmentally friendly products is growing. For this reason, the demand for corresponding technologies, materials, and products is increasing.
SOME GENERAL STRATEGIES AND APPROACHESS
The mentioned features are just some of the numerous factors that define the agricultural market. The agricultural sector is constantly evolving, and in such conditions, management and marketing need to adapt to changes in the industry and market. Agribusiness uses a variety of marketing tools to attract clients, improve sales, position the brand, and develop the business. Here are some of the most common marketing tools:
- Branding and positioning. Developing a strong brand can help stand out in the market, create a unique image and consumer perception, increase customer trust, and ensure their loyalty.
- Digital advertising. Traditional advertising methods such as TV, radio, and print advertising are not used in B2B activities of agribusinesses, but more and more agro-companies are switching to digital advertising. This includes contextual advertising, banners, social media advertising, etc.
- Social media and messengers. Social media is a powerful tool for agribusiness as it allows connecting with the audience, demonstrating products, sharing useful information, interacting with clients, and increasing brand awareness.
- Content marketing. Creating interesting and useful content, such as articles, videos, and infographics, can attract the target audience's attention and strengthen the company's position as an expert in the field.
- Participation in exhibitions and fairs. Exhibitions and fairs allow agribusinesses to showcase their products personally, find new clients, develop business contacts, and study market trends.
- Direct marketing. Personal meetings, field days, conferences, seminars, etc., are indispensable elements of the marketing complex for agribusinesses, providing undeniable advantages over competitors.
- Cooperation and collaboration. Participation in cooperatives or partnerships with other industry players can help enter new markets and expand the product range.
- After-sales customer support. Providing quality service, consultations, and customer support promotes loyalty and repeat sales.
These are just some of the key marketing tools. The choice of specific tools depends on the company's characteristics, business direction, target audience, market conditions, products, and company strategy.
Overall, marketing in agribusiness is undergoing changes and is characterized by a transition from traditional and conservative approaches to more innovative and modern ones. This is due to the overall development of the industry, changes in the worldview of owners, the spread of modern technologies and business practices, increased competitive pressure, and the development of digital technologies. The agricultural sector is gradually implementing digital marketing, using social media, content marketing, and other innovative tools to attract customers, increase brand awareness, and expand markets, which helps to create competitive advantages and achieve success in agribusiness.
It should be noted that within one article, we cannot show all the pitfalls or demonstrate all the marketing methods and tools specific to the mentioned industry. In other words, these are just a few examples of quite general marketing approaches that can be applied to companies in the agro-sector. From a practical point of view, everything is much more complicated - the choice of a specific marketing strategy and tools depends on the target audience, competitive environment, and unique advantages of the agribusiness, etc. At the same time, it is desirable to understand that agribusiness marketing may encounter a number of specific problems that are unique to each individual case and require an individual approach to their solution.
Achieving the commercial objectives of a company through effective marketing requires a deep understanding of the market situation, consumer needs, the ability to analyze and explore alternatives, and a creative approach to problem-solving. Our company has extensive experience in defining optimal marketing strategies for our clients' businesses, creating a strong brand and market positioning, as well as developing a marketing mix and implementing the chosen strategy. You can familiarize yourself with the services and solutions our company offers on the "Services
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