Food products often involve the general marketing approaches and techniques applied the marketing of other kinds of products and services. Topics such as test marketing, segmentation, consumer research, and market entry strategy, are highly relevant. In addition, food marketing involves other kinds of challenges; such as dealing with products whose quality andavailability varies as a function of current harvest conditions. The value chain is particularly important. Today, processing and new distribution options provide increasing opportunities available to food marketers to provide the consumer with convenience.
Food Marketing Efficiency refers to providing consumers with desired levels of service at the lowest cost possible. This does notnecessarily mean to minimize costs after materials leave the farm. Services added later in the process may be very valuable to the consumer. The objective is to add the needed value steps as efficiently as possible. Wal-Mart is extremely efficient in providing the retail part of the value chain even though that service ultimately costs money.
Marketers often refer to the “Four Ps,” as a way to describeresources available to market a product:
• Product. Firms can invest in the product by using high quality ingredients or doing extensive research and development to improve it. In Western markets with varying tastes and preferences, it has generally been found that products that offer a specific benefit, tend to be better than products that only imitate a competitor’s products.
•Price. Generally there are two ways to make a profit: sell a lot and make a small margin on each unit or make a large margin on each unit for lesser volumes. Some firms compete on price and others on other features like service while charging higher prices.
• Place. Decisions associated with channels of distribution that serve as the means for getting the product to the target customers.Distribution decisions include channel member selection, logistics & market coverage.
• Promotion. Involves the different tools that firms develop to get consumers to buy more of their products, possibly at higher prices. Advertising is what we think of by default, but promotion also includes coupons, store price promotions, in-store demonstrations and premiums.
A central issue in food marketingis the value chain. Process by which different parties in between the farmer and the consumer add value to the product. In an extreme case, the farmer only receives about five cents for every dollar charged for their products in the store. Part of the added cost results from other ingredients, but much of the value is added from processing, manufacturing, distribution and branding. The valuechain provides an opportunity for many firms to add value to a product. However, these added costs usually result from consumer demand where consumers are willing to pay for additional convenience. In recent years, there has been a sharp increase in the demand for prepared foods from supermarkets/restaurants.
It is important to note that the value chain comes about in large part because asequence of contributors allows each to specialize in what it does best or is most qualified to be doing. Farmers tend to be most interested in doing actual farming tasks and may be uncomfortable making deals with processors and manufacturers. Agents may specialize in this task. Large processors can take advantage of economies of scale by servicing many farmers. Large manufacturers can invest inbranding and distributors can combine goods from many different suppliers to distribute and sell efficiently.
Many different forces affect the food market; sociological, government regulations, international trade policies, innovation and technology, weather and other conditions affecting economic cycles and competitive conditions. Food industry faces numerous marketing decisions. Money can be...