Agriculture Marketing and Changes In Its Environment. Seong Jin Park

Transcription

1 Agriculture Marketing and Changes In Its Environment Seong Jin Park

2 Contents Ⅰ Agricultural Marketing Ⅱ Changes in Each Sectors Ⅲ Case Studies IV Implications

3 Ⅰ Agricultural Marketing

4 1. Definition and Concept Marketing = Satisfaction through the creation of exchanges Marketing Sales or Distribution An area of buyer need and interest in which a company can perform profitably A process that must start long before producing agricultural products or processed food Strategic business assistant applied to real world & Systematic management activities Marketing is not just making money by raising sales All activities related to distributing goods or Services to consumers

5 2. Necessity of Marketing Changes in consumer preferences The need for customer-centered marketing and production differentiation To build consumers trust and securing customers and competitive advantage More consider the non-price factors as income increases Intensified Competition with large discount stores and distributors The Drastic growth of large discount stores Increase the bargaining power of distributor Weakening of main production area The development of agricultural production technology Increase of imported agricultural products

6 3. Changes in the Role of Marketing

7 Ⅱ Changes in each sector

8 Changes by Consumer Preferences Consumer Desire Commercialization Producing Area Consumption Trend Commodity Trend Production/Distribution Trend Convenience Semi-processed/Package Consumer-Oriented Items Health/Safety Small Quantity/High Quality Consumer Needs Environment-Friendly High Quality Food Ingredient Imported/New Items Production Eco-Friendly Farming Branding Consumption Pattern Diversified Health Convenience Food Distribution Pre-treatment Channel Specialization New Distribution System : Delivery, Internet Packing Processing Precise Screening Small Packing Semi-Processed

9 1-1. Consumer Lifestyle Changes Increase per capita income and inequality of income Per capita income: $6,513(1990) $27,266(2015) Gini Coefficient: 0.26(1995) 0.34(2015) Polarization of Consumption by Income Inequality Increase Population Aging & Single Households Population Aging: 7.2%(2000) 24.3%(2030) Single Households: 9.0%(1990) 23.9%(2010) 34.3%(2035) Small-Sized and Convenience Health-Oriented Functional Food

10 1-2. Consumer Lifestyle Changes Increase Economic Activity of Woman Woman Participation in Economic Activity: 42.8%(1980) 51.8%(2015) Pursuit Well-Being High Quality and Safety Functional Food (Health-Oriented) Origin Increase Eco-awareness & Health consciousness Eco-Friendly/Organic Safety

11 Changes by Consumer Preferences Consumer Desire Commercialization Producing Area Consumption Trend Commodity Trend Production/Distribution Trend Convenience Semi-processed/Package Consumer-Oriented Items Health/Safety Small Quantity/High Quality Consumer Needs Environment-Friendly High Quality Food Ingredient Imported/New Items Production Eco-Friendly Farming Improving technique Consumption Pattern Diversified Health Convenience Food Distribution Pre-treatment Channel Specialization New Distribution System : Delivery, Internet Packing Processing Precise Screening Small Packing Semi-Processed

12 2-1. Market/Distribution Decreasing Agricultural wholesale market share but Increasing power of large retailers Increase imported agricultural products(fta, DDA) Processed food: 1,469(Thousand tons/1998) 5,406(Thousand tons/2015) Agricultural Products: 6,589(Thousand tons/1998) 8,665(Thousand tons/2015) Increasing consumers' voice Use of the twitter, blogs, cafes, SNS, etc. New distribution channels are emerging. Direct selling(e-commerce, Farmers markets, etc.)

13 2-2. Market/Distribution Increased power of Online Market Billion Won Food/Beverage ,642 3,611 4,844 Agricultural/Marine ,171 1,443 Total 3,347 10,676 25,203 45,302 53,934 Increase Eco-friendly organic produce stores and local food stores Expand the sales of eco-friendly products and differentiated section in large distributors opened Yongjin cooperative local food direct selling(2012), Currently established 148 and billon won

14 Changes by Consumer Preferences Consumer Desire Commercialization Producing Area Consumption Trend Commodity Trend Production/Distribution Trend Convenience Semi-processed/Package Consumer-Oriented Items Health/Safety Small Quantity/High Quality Consumer Needs Environment-Friendly High Quality Food Ingredient Imported/New Items Production Eco-Friendly Farming Branding Consumption Pattern Diversified Health Convenience Food Distribution Pre-treatment Channel Specialization New Distribution System : Delivery, Internet Packing Processing Precise Screening Small Packing Semi-Processed

15 3-1. Producing Areas Progress of Organizing, scale-up and specialization Status of Organizations in Producing Areas Unit: Number, million won, % Category Total Integrated Individual Total Integrated Individual Total Integrated Individual cooperative Organization corporation Subtotal cooperative 909, , ,130 1,051, , ,785 1,188, , ,857 Total sales corporation 440, , , , , , , , ,224 Subtotal 1,349, , ,769 1,499, , ,504 1,643,521 1,220, ,082 Source: Korea Agro-Fisheries & Food Trade Corp., results of 2014 comprehensive evaluation of distribution in producing areas

16 3-2. Producing Areas Diversification of distribution entity in producing areas Cooperative Business Alliance Agricultural Company B U S I N E S S R A N G E M E T R O C I T Y R U R A L Cooperative Corporation Cooperative Corporation Reginal Agricultural Cooperative (RAC) Cooperative Sorting & Shipping Organization Corporation (Farming Association, Agricultural Company) Product Coopera tive Agricult ural Corpora tion (AC) Farmers Organization Other Corporation (Public Corporation etc.) Corporation (City/County Distributor) RAC, AC, Others Large Product Cooperative Product Cooperative Large Agricultural Corporation Agricultural Corporation Small Agricultural Corporation Source: Regional Agriculture Network, commissioned research on establishing the 2013 comprehensive distribution plan in producing areas

17 3-3. Producing Areas Progress of agricultural branding Use of Local brand(geographical indication), Allied branding, Single brand Cause competition among regions Present Situation of Agricultural and Livestock Product Brands (2014) Unit: Number of brands Category Registered Unregistered Allied single Subtotal Allied single Subtotal Total Total 612 1,380 1, ,174 3,299 5,291 Source: Ministry of Agriculture, Food and Rural Affairs (

18 III Case Studies

19 1. Anseongmachum Cooperative Union Select big 5 brands(rice, Beef, Ginseng, Pear, Grape) & Focus on publicity and marketing Agricultural cooperative association carries out the brand management Marketing to Large retailers Leading local agriculture by building a regional brand system, Contributing to creating income and enhancing the value of regional agriculture Decrease of agriculture is much lower and Average sales are much higher than the national average

20 1. Anseongmachum Cooperative Union City Hall Brand Management Support, Promotion, Coordination Cooperatives Producing Extension Organizing Farmers Business Alliance Build Communication/ Business System Cooperative Federation Planning Business Coordinating b/t Cooperatives Farmers Producing & Supplying High-Quality Products

21 2. Boseong Green Tea Visit more than 5 million people every year & Popular as movies, drama, and advertising location Create an income of billion won for each year Various derivatives such as green tea pig, beef, and seawater, etc.

22 3. Creating New Market Art of Kimchi Mama(Parkkwanghee) Sell Kimchi only to consumers who recognize the taste, price, and my method Kimchi that only consumers can eat according to standards set by producers

23 4. Commercialization Differentiation of Packaging Value Added Peach Fresh Convenience at a meal Frozen Strawberry Iced soft persimmon Hangwa made from apple

24 IV Implications

25 1. Implication Agricultural marketing is in step 3 but evolving into step 4 in Korea Classification Roll of Marketing Step 1 Pre-Market Self-Sufficiency Step 2 Step 3 Step 4 Step 5 Undifferentiated Products Decentralized Market Undifferentiated Products centralized Market differentiated Products centralized Market differentiated Products Decentralized Market Source: Blattberg, Robert C.(1996), Marketing Information Revolution Confirmation of Buyers and Sellers Effectiveness of Distribution Pricing by the Market Effectiveness of Distribution Target marketing based on consumer needs Brand Advertisement Changes from one-sided to bilateral communication Management information flow b/t producer and consumer

26 2. Implication Development of high quality, safety and health products Development of New products and foods, New varieties, Seed Improve farming technique Strengthen brand marketing & Increased Competition Regional Brands and co-brands, Communicate with tourism industry Between Brand, Entities(Organization), Region Sales, Creating new markets Deepening emotional marketing Packaging, Design, Different in shape, etc.

27 Thank you.