Overview

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What is agricultural marketing?

1. Concept of agricultural marketing and what it involves

Agricultural marketing refers to the actions that producers of agricultural products take to make retailers and consumers aware of and able to access products from the agricultural sector.

  • Retailers and consumers represent the demand side of marketing.
  • Agricultural producers and their products represent the supply side of marketing.

Differences between marketing and selling

Marketing Selling 
Profit orientated  Product orientated 
Long terms plans are made  Short-term objective is to sell the product 
Emphasis on consumer needs and satisfaction  Needs and satisfaction of the consumer are neglected 
Different departments work together   Sales department does not work with other departments
Technological innovation is important Costs are reduced to achieve maximum sales and profit


Main functions of agricultural marketing
Agricultural marketing involves identifying people’s needs and desires and determining how these can be satisfied. Farmers make a profit in return.

Agricultural marketing performs four functions.

Transport in agricultural marketing

  • Transport bridges the gap between producer, manufacturer and consumer. Choice of transport is determined by the distance involved, the cost, the nature of the product and the speed of delivery required. Challenges include the expense and the difficulty of transporting perishable products.

Storage in agricultural marketing

  • Storage is important in the agricultural sector. The storage function is performed by co-operative societies, warehouse owners, cold storage owners, manufacturers, wholesalers and retailers. They perform the following functions:
  • ensure that the products remain fresh
  • maintain the quality of agricultural products
  • bridge the time between production and purchasing
  • ensure a continuous supply of the agricultural product
  • ensure that prices stay constant
  • prevent an oversupply or shortage of goods.

Packaging in agricultural marketing

  • Packaging should protect, contain, deliver and display the product in a way that appeals to the consumer.

Steps of packaging a product

  • Design different forms
  • Choose the design
  • Choose materials and colour schemes
  • Placement of labels and trademarks.

Forms of packaging

  • Primary packaging: is for direct sale to the consumer, for example tomatoes packed in small pockets for sale.
  • Secondary packaging: involves the packaging of sales units, for example pockets of tomatoes packed in cardboard boxes for transportation and handling.
  • Tertiary packaging: involves the grouping of secondary packed units to further facilitate handling and transportation, for example boxes of tomatoes packed in a wooden pallet.

Guidelines for packaging

  • It should improve shelf life.
  • The materials used should be environmentally friendly and either biodegradable or recyclable, but also strong and easy to handle.
  • The container should be suitable for the product.
  • The product should fit well in the container.
  • It should have its own identity and strong sales appeal.
  • The package should be appropriately designed for the target market.
  • There should be a variety to suit both bulk packages and small packages.

Advantages of packaging

  • It improves shelf life.
  • It gives the product appeal.
  • It advertises the trademark.

Processing in agricultural marketing

  • Processing involves changing an agricultural product from its original form or condition into a consumable commodity. This is done to increase its utility value, keeping quality and shelf life. Processing is also called value adding.
  • Forms of processing
  • Indigenous processing: changes the original product into a consumable product using indigenous knowledge and traditional practices (e.g. drying up of meat to make ikhuthu and the preparation of traditional beer and silage).
  • Agro-processing: is the conversion of a raw product to make it more consumable and increase its value. It takes place in the agro-industries and involves milling, blending, cutting, fermenting and moulding.

Advantages and disadvantages of processing

Advantages Disadvantages
Improves the quality of a product (value adding)  Difficult to access capital for new industries 
Increases the shelf life  New products compete with established products in the market
Increases the appeal of the product  Business owners might lack experience and expertise 
Solves the oversupply problem and reduces wastage  
Enhances food security (ensures a continuous supply of food for homesteads)  
Creates job opportunities for low-income groups  


2. Price determination and supply/demand
Price determination is the process involved in finding the price consumers are willing to pay for a particular product at a particular time. This involves supply of and demand for the product.

Supply

  • Supply is the quantity of goods on the market offered / sold at a particular price at a particular time. It can also be defined as quantities of goods or services that producers plan to sell at each price level during a particular period. Supply is determined by producers, although consumer demand can influence how much or what producers supply.

Supply curve
Supply can be indicated by a hypothetical supply graph. It shows that when the price of goods increases, the quantity of goods supplied increases too, since increased prices (up to a level determined by consumers) means increased income for producers, which drives them to supply more product.
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Demand

  • Demand is the quantity of goods bought at a particular price at a particular moment. Demand implies that the consumer intends to buy and has the necessary purchasing power. (Purchasing power should be equal to or greater than the price of a product.) Demand is therefore influenced by the price of the product and it is determined by consumers.

Demand curve
Demand can be indicated by a hypothetical supply graph. It shows that when the price of goods increases, the quantity of goods bought will decrease. Demand will increase if the price is low. In other words, the lower the price the higher the demand of a product.
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Factors influencing supply and demand of a product
Production factors have an impact on supply. On the other hand, consumers have an impact on demand.

The law of supply and demand
The law of supply and demand states that there is a higher demand for agricultural products when more customers buy a particular product. When there is a high demand, the price of the product will increase. On the other hand, the price will decrease when there is a low demand. This will result in many people buying the product which can lead to a product shortage. The price of the product will then increase. There is a stage in the market when supply and demand are equal and there is neither an oversupply nor a shortage. This is called market equilibrium. The price that consumers pay is determined by the market equilibrium.

Factors that influence supply
Producers determine supply of a product to the market. However, there are production factors that influence their decision and ability to supply a product to the market.

  • The price of alternative products
  • Seasonal production
  • Weather conditions
  • The profit margin of the product
  • Specialised scientific knowledge
  • The ability to increase supply
  • Expected future prices
  • The state of technology

Factors that influence demand
Demand plays an important role in determining how much of the product will be bought by the consumers. There are several factors that influence consumers and thus product demand.

  • The price of the product
  • Usefulness of the product
  • Quality of the product
  • The price of competitive goods
  • Number of consumers
  • The preferences of consumers
  • The buying (purchasing) power of consumers
  • Tradition and religions
  • The size of the household

Price elasticity and price inelasticity of supply/demand
Price elasticity of supply (Pes) measures the relationship between change in quantity
supplied and a change in price. If supply is elastic, producers can increase output without a rise in cost or a time delay. If supply is inelastic, producers find it difficult to change production in a given time period.

What factors affect the elasticity of supply?

  • Spare production capacity
  • Stocks of finished products and components
  • The ease and cost of factor substitution
  • Time period and production speed

Price elasticity of demand
(Ped) measures the responsiveness of demand after a change in price. When demand is elastic, a fall in price leads to an increase in demand and results in a rise in income. When demand is inelastic, a rise in price does not lead to a big decrease in demand and results in an increase in income.

What factors affect the elasticity of demand?

  • The number of close substitutes
  • The cost of switching between products
  • The degree of necessity or whether the good is a luxury
  • The proportion of a consumer’s income allocated to spending on the product
  • The time period following a price change
  • Whether the product is subject to habitual consumption
  • Peak and off-peak demand

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3. Market equilibrium
Market equilibrium is when supply and demand are equal. The price of goods at this point is called the equilibrium price. Market equilibrium can be shown on a market equilibrium graph.

  • P1 represents a low price It affects supply (shown by E) and demand (shown by F). This occurs as a low price will encourage customers to buy more of a product which will increase the demand for that product. On the other hand, a low price will encourage producers to offer fewer products to the market as they will not make much profit. So high demand and low supply coincide at the line labelled D. This means that there will be high demand for the product and a low supply at D. This will result in a shortage of the product.
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  • P3 represents a high price It will cause the demand to decrease and the supply to increase. The demand will decrease because high prices will discourage consumers from buying the agricultural product. The supply will increase because farmers will offer more products to the market in order to increase their profit.
    Low demand and high supply coincide at the line labelled B. This means that there will be low demand for the product and a high supply at B. This will results in an oversupply of the product.
  • P2 represents the equilibrium price It is a healthy situation in which demand is equal to supply. It is a state where the price is balanced between the high price and the low price. In other words, the products supplied are able to meet the demand in the market.

4. The development of a market
Marketing involves the planning, implementation and control of business activities to bring together buyers and sellers for the exchange of goods and services. It helps to fix prices, satisfy the target market and promote products.

  • Consumers must be in the market to buy products.
  • Producers and suppliers must ensure that products are in the market for consumers to buy.

Fixing prices
In a free market system (as we mainly have in South Africa) the interaction between supply and demand influences consumer prices. The South African government cannot fix prices but there ways that it can help to control them.

Set floor prices for basic foodstuffs
This keeps the prices of basic foodstuffs as low as possible.

Set the ceiling prices for foodstuffs
This sets the maximum price for certain products.

Combat inflation
When there is inflation, money loses buying power. This leads to an increase in prices. The average person will not be able to afford basic foodstuffs. So the government should try to control inflation.

Types of buyers (target markets)
Before starting a farming business, the farmer should identify and research a target market to find out its needs and wants, and how much it would be willing to pay to satisfy these. This will enable the farmer to produce appropriate products.

Methods used to promote products

  • Advertising
  • Personal selling
  • Sales promotion
  • Publicity

Market research information should be included in the farmer’s business plan.

5. Approaches to marketing

Niche marketing

  • This is a form of marketing in which the product is sold to a small segment of the market. There are three rules for niche marketing:
  • meet the unique needs of the segment of the market
  • focus on the interest and motivations for the segment when you develop promotional materials
  • test the market by starting small, but with focus.

Mass marketing

  • In this form of marketing the farming business ignores market segment differences and addresses the whole market. It is also called undifferentiated marketing.
  • Strategies are used to reach as many consumers as possible.

Multi-segment marketing

  • This type of marketing involves marketing to two or more segments of the market.
  • A unique marketing strategy is then developed to suit those segments.

Sustainable agricultural marketing
This involves the application of an environmental educative approach to marketing. It takes social, ethical and environmental issues into account. This form of marketing ensures that with all the intensive production and marketing taking place, that the environment retains the potential to support future generations.

Green markets

  • A green market distributes used, refurbished, reconditioned, repaired and recycled products that are in working condition through brokers and resellers.

Eco-labelling

  • Eco-labelling is a method of labelling that communicates information, educates and increases consumer awareness on the impact of a product on the environment. It encourages consumers to buy products with a low environmental impact.

Agricultural marketing systems

1. The main types of marketing in agriculture
Farmers choose marketing methods based on the type of product that they need to sell.

Free-marketing
In South Africa the deregulation of the marketing systems led to the establishment of the free-market system. This form of marketing allows farmers or producers to market their products in any way.

Advantages and disadvantages of free-marketing

Advantages Disadvantages
Sales are usually for cash which is more convenient Farmers may not have all the necessary skills 
Producers receive their money immediately  It is riskier because if natural disaster affects production, the farmer bears all the risk alone
It is cheaper because there are no middlemen such as agents or intermediaries  Prices will fluctuate because of the force of supply 
Farmers can control how much profit they can make by analysing the demand A small-scale farmer will have less bargaining power
Farmers are motivated to work harder  Production and marketing costs are high
Farmers are encouraged to produce quality products because of competition Small-scale farmers struggle to keep up production and focus on marketing 
The producer can show initiative and drive Some farmers may form cartels to protect themselves from competition and consumers could be exploited
More farmers will be encouraged to enter as entrepreneurs as this form of marketing is cheaper Marketing is now more commercialised and specialised so experts are needed to perform this role

The main channels/options of free-marketing
Different channels have to be used to market agricultural products so that producers can maximise their profits.

Farm gate market: the farmer erects a structure near the farm (a farm stall) and sells the products directly to the consumers. This is also called bakkie trade.

  • Advantages of the farm gate market
  • The farmer will get cash immediately.
  • There is less expense in terms of labour and transport.
  • The middlemen, intermediaries and agents are eliminated.
  • The producers fix the price.
  • There is less competition as the farmers only sell their products in their own locality.
  • Disadvantages of the farm gate market
  • There might be few buyers.
  • Marketing is restricted.
  • Products may spoil if they take a long time to sell.

Fresh produce markets (FPM): built and controlled by the local authorities or municipalities. By-laws of municipalities affect the fresh produce market. Agents sell products on behalf of the producers and are paid a commission on their sales.
Examples of FPMs in South Africa are the Durban FPM and the Johannesburg FPM.

  • Disadvantages of FPMs
  • Any financial difficulties of the municipal councils would have a negative effect on the functioning of the markets.
  • Municipalities may use the by-laws to maximise profits and therefore prevent free and fair competition.
  • The infrastructure and market share of FPMs has declined.
  • Transformation has been slow to accommodate black producers and buyers.
  • The wholesalers are not part of the marketing channel.
  • Agricultural Produce Agents Council (APAC) only represents interests of agents.
  • Recommendations for improvements to FPMs
  • The Interim Ministerial Committee made these recommendations in 2009.
  • FPMs are now owned by the municipalities and rented out to the agents (separate ownership and management). A moratorium was placed on any planned privatisation by local authorities.
  • The FPMs are now nationalised and so they are called National Fresh Produce Markets (NFPMs).
  • The Agricultural Produce Agents Act was amended which had several implications. The sectoral quota for markets and agents, as well as a transformational score card system was introduced. The Fresh Produce Market Development Agency (FPMDA) was established to address the commission system by agents. Commissions for producers have to be negotiated and paid within five days. Producers and buyers must be treated fairly. Individual agents can register with Agricultural Produce Agents Council (APAC). Agents must record their business transactions.
  • Municipal by-laws were standardised.
  • The FPMDA improves the infrastructure of the FPMs and negotiates with the
    Treasury to fund these improvements.

Stock sales: involve the selling of shares on the agricultural markets on the Johannesburg Stock Exchange (JSE).

Advantages and disadvantages of stock sales

Advantages Disadvantages 
It improves profit margins; there are greater returns if one picks the right company Not everyone has access to the JSE 
It attracts international investors  There are high risks  
Price changes are limited by price hedging  The general economy of the country determines success on the stock exchange 
It is easy to get ownership of stock Costs are higher due to brokerage fees 
Stock can easily be converted into cash It is expensive 
It reduces tax to be paid on capital gains  

Direct marketing: takes place when the farmer or producer markets products directly to the consumer using online marketing, social networks, text messaging or e-mail. Another form of direct marketing is telesales in which agents make calls to potential customers. Pre-harvesting and post-harvesting contracts can also be used as a form of direct marketing.

Advantages and disadvantages of direct marketing

Advantages  Disadvantages 
Many customers can be attracted very quickly  Customers do not know what they are buying 
Agents are motivated to get as many customers as possible because they are paid on commission Many customers cancel the transactions upon delivery if the product is not what they wanted 
It is cheaper to market products because it saves time, money and labour  Products may reach the expiry date before delivery especially when transported by ship 
Results are obtained quickly  
It is environmentally friendly because less paper is used   

Internet marketing: uses of e-commerce to advertise and conduct a transaction.

  • Advantages of internet marketing
  • You can reach wide audiences with a small budget.
  • It is convenient and can be done from home.
  • Results are obtained quickly.
  • You can research the target market by recording each time a consumer goes to the website. The results are also easy to access.
  • Marketers are able to meet consumer demands.
  • It saves time, money and labour.
  • Disadvantages of internet marketing
  • There are many dishonest schemes.
  • Customers do not know what they are buying.
  • Pyramid schemes are common.

2. Co-operative marketing
An agricultural co-operative is an organisation where farmers pool their resources to conduct their different business activities for the benefit of its members.
Agricultural co-operative principles

Democratic member control

  • The highest authority of a co-operative is in the hands of members during a general meeting. They have the democratic right to vote for their directors.
  • In business operations of a co-operative, the size of members bonuses depends on their capital contributions.

Open and voluntary membership

  • Anyone who fulfils the membership requirements is entitled to join the co-operative. No discrimination is allowed.

Autonomy and independence

  • A co-operative is an independent and autonomous body controlled by its own members and no outside influence or decision should affect the running of the co-operative. Decisions are binding on all members. Each member has one vote.

Distribution based on the value of a business

  • The co-operative distributes profits to each member based on the value that they add to the business.

Economic participation/financing of co-operatives

  • Members of a co-operative finance it through entrance and membership fees, membership shares and member loans. Profits are divided amongst members based on their number of shares.

Concern for the community

  • Co-operative society members belong to a certain community and therefore their success should benefit that particular community.

Co-operation among members

  • Co-operative society members are committed to working together, pooling their resources and using their strengths to ensure the success of their co-operative.

The advantages of agri-co-operatives
The main strategy of agricultural co-operatives is pooling, which provides co-operatives with the following benefits:

  • Members share skills, experience and knowledge, which results in improved products and services.
  • Bargaining power – which reduces input costs (e.g. seeds and fertilisers) and costs of production. Bargaining power also results in:
  • reduced marketing and distribution costs
  • improved access to finance.
  • Collective financing of undertakings, which reduces infrastructure costs.
  • Collective representation to local, provincial and national government structures, which enables co-operatives to influence agricultural policy.

The types of agricultural co-operatives
The agricultural co-operative are organised according to different levels and, within these levels, according to the functions that they perform.

Primary co-operatives

  • Formed by individuals.
    Their purpose is to provide employment and services for their members and to promote community development.

Secondary co-operatives

  • Formed by two or more primary co-operatives. The aim of this co-operative is to service its members. It is usually organised at the district level.

Tertiary agricultural co-operatives

  • Formed by two secondary co-operatives. The purpose is to present and advocate the interests of members to government, the private sector and other stakeholders. This co-operative is organised mostly at the provincial level.

3. Controlled marketing
In controlled marketing, the marketing of products is regulated by control boards. These were mainly set up during apartheid. Many people believed that the control board measures prevented black farmers from entering agricultural businesses. So it was not surprising that the marketing systems were deregulated in 1994 when South Africa’s first post-apartheid government came into power.
A new act was then passed called the Marketing Act of 1996.

Activities in controlled marketing

  • Stabilisation of prices
  • Orderly marketing
  • Market development
  • Standardisation of products
  • Involvement of co-operatives
  • Processors and distributors
  • Research

4. Agricultural marketing chain or supply/demand chain
The agri-business chain has two parts: the production chain and the marketing chain.

Before being harvested, the product goes through the production chain so that it is ready for harvesting and thereafter marketing.

  • The marketing chain is also known as the supply/demand chain.
  • It involves all the stages that a product passes through after being produced and harvested on a farm until it reaches the consumer:
    → cleaning, drying, grading, processing, transporting, storage, packaging, labelling and branding.

Factors that hamper the marketing chain of agricultural products

  • Seasonal fluctuation
  • Perishability
  • Standardisation
  • Ineffective control over production
  • Long-term production
  • Wide product distribution
  • Locality-restricted production
  • Intermediaries (middlemen) are required for marketing

Ways to streamline and improve the agri-business chain

Participatory market chain approach

  • All the participants play an active role in the agri-business chain. Their involvement as a group yields new strategies and leads to trust, collaboration and the interest of all participants. It ensures that the small-scale farmers get access to the markets and everyone in the chain knows what is expected of them.

Vertical co-ordination

  • Involves activities that reinforce contractual agreements. It does not include the physical provision of input and services. Some agreements between small-scale farmers and the participants in the agri-business chain need to be strengthened so that they are fair and transparent to both parties. Government intervention through policies and legislation can ensure that producers, suppliers, processors and marketers work together harmoniously.

Adequate infrastructure

  • Ensures that there is enough space and shelter for storage and processing. Once their infrastructure is adequate, smaller businesses can concentrate on other activities such as marketing of products.

Business linkages and value chains

  • A value chain is an alliance of agricultural enterprises working together at different stages such as production, processing and marketing. They add value to products so that they have a high value when they are presented to the consumer.

Vertical integration

  • The process in which government and farmers, especially small-scale farmers, work together. It involves physical intervention by government to help the farmers. Government departments provide fertilisers, training and finance to help the private and the small agri-business chains to thrive.

Creation of market organisations to assist producers and processors

  • Sharing of information is important in the agri-business chain. Market organisations can ensure that producers and processors know exactly what is expected of them. They can also set the right standards to make agricultural products more marketable.

Government involvement

  • Government departments should play a pivotal role in helping small-scale farmers. This will ensure that the legislation and policy passed allows the businesses to operate effectively. The legislation can ensure the smooth running of the agri-business chain and remove any hindrances or risks.

Specialisation

  • Farmers must consider their expertise, knowledge and experience before they start a particular type of business in the agri-business chain. This will ensure that they produce quality products.

Diversification

  • This is when a farmer has different farming enterprises in the same environment.
    For example, a sugar cane farmer might need to consider diversifying his farming business because it takes a long time for sugar cane to grow and produce profits. So the farmer might decide to add broiler, wood and feed production enterprises to the same farm.

Hedging

  • This is the fixing of prices so that they are not affected by supply and demand.
    This can be useful because supply and demand can affect business profits.
    Once suppliers know that the price of a product is constant, they can plan their production activities in such a way that they are able to make a profit.

The role of legislation in the marketing of agricultural products
Government Notice 360 of 1952
The Government Notice proposed that inspectors be introduced. The inspectors had to ensure that farmers complied with regulations in agricultural marketing.

The Marketing Act of 1996
The Government Notice was amended and replaced with the Marketing Act No 68 of 1996. It provided for the appointment of a National Agricultural Marketing Council to advise the Minister in his decision making. Two main aims of the Act were to increase market access to all farmers and promote efficient marketing of agricultural products.

Marketing of Agricultural Products Act of 2001
This Act proposed the constitution of the National Agricultural Marketing Council and its committees. Its mandate was to align financial matters to the Public Financial

Management Act of 1999. The Act of 2001 also made provisions for the following:

  • Terminate the role of parliamentary committees in the marketing of agricultural products
  • Utilise and audit levies collected from agents
  • Liquidate boards established through the Marketing Act of 1968
  • Consultations between the Minister of Agriculture and Agricultural Marketing Council before prohibiting exports and imports
  • Prohibit the import and the export of chosen agricultural products
  • Submit budgets for approval by the council.

Agricultural Produce Agents Act of 1952
This Act provided for the establishment of Agricultural Produce Agents Councils and the fidelity funds. It stated how the fidelity funds would be collected and used to fund agent activities. It also stated that agents had to hold Fidelity Fund Certificates to operate.

Agricultural Produce Amendment Act of 2004
This Act made provisions to:

  • Change the constitution of the Agricultural Produce Agents Councils
  • Extend the jurisdiction of the councils
  • Enhance the regulating powers of the council
  • Apply certain conditions to fresh produce only
  • Make text (wording) alternations in the Agricultural Produce Agents Act of 2004 which prevented the control boards, people acting on behalf of the control boards and local authorities from working as agents
  • Alter the description of agricultural produce.

Security Services Board Act No 36 of 2004
This Act replaced the Insolvency Act No 24 of 1936 and the Companies Act No 61 of 1973.
The main aim of the Act was to regulate the capital markets. It also established the
Financial Services Board (FSB). The objectives of the FSB were to:

  • protect investors
  • ensure fair, transparent and efficient financial markets
  • reduce risks associated with marketing systems.

Consumer Protection Act of 2008
This Act set out the minimum requirements to ensure that consumers are protected.
It provides a framework for consumer protection that should be read together with other Acts and policies for consumer protection. This Act applies to high capacity municipalities. It therefore excludes the ordinary municipalities. It provides guidelines on the following aspects:

  • When consumers may not be contacted for direct marketing purposes
  • Information to be disclosed by the intermediary or the agents
  • Reporting and record-keeping requirements for promotional competitions
  • Advertising of auctions
  • Maximum period of a fixed-term contract and cancellation fees.

Code of Advertising Practices
This is a guiding document for advertising. It was drawn up by the Advertising Standards Authority of South Africa and representatives of the marketing communication industry. It is based on the International Code Advertising Practice of which the Marketing Association is a member. The Advertising Standards Authority of South Africa is a body set up by the marketing communication industry. Its aim is to set and regulate advertising standards in South Africa.

Topic Questions

  • Answer the questions below. Check your answers afterwards and do corrections.
  • Give yourself one hour.
  • Marks: 100
  1. Match each statement in column A with a statement in column B. (7 × 2 = 14)
    COLUMN A  COLUMN B
    1.1 Marketing Act of 1996 
    1.2 Advertising Standards
    1.3 Consumer Protection Act of 2008 
    1.4 Marketing of Agricultural Products Act of 2001 
    1.5 Security Services Act No 36 of 2004 
    1.6 Agricultural Produce Agents Act of 1952 
    1.7 Agricultural Produce Amendment Act of 2004

    A. Formation of the National Agricultural Marketing Council
    B. Financial markets are fair and transparent
    C. Marketing licence from the director of marketing
    D. Fidelity Funds certificates
    E. Dates and times for contacting clients
    F. Enhanced the jurisdiction of the agents councils
    G. Set up by the marketing communication industry
    H. Proposed the introduction of inspectors

  2. Define the following terms:
    2.1 marketing chain
    2.2 value chain
    2.3 grading (3 × 2 = 6)
  3. Name THREE factors that complicate the marketing of agricultural products. (3 × 1 = 3)
  4. Ongoing improvements to the agri-business chain are vital.
    4.1 Explain how infrastructure development can improve the agri-business chain.(1 × 5 = 5)
    4.2 Suggest FOUR other ways to streamline and improve the agri-business chain. (4 × 1 = 4)
  5. Choose the best answer to each question. Write only the answer number (i–iv) next to the question number (1.1–1.5).

5.1 Demand is affected by ______

  1. weather conditions.
  2. the price of the product.
  3. the stability of the product.
  4. the state of technology.

5.2 Free-marketing is a form of marketing in which the farmer markets his/her products ______

  1. as directed by control boards.
  2. as he pleases.
  3. with the aid of agents.
  4. as per agreement by members of the society.

5.3 The form of marketing where a small segment of the market is targeted is called ______

  1. multi-segment marketing.
  2. mass marketing.
  3. niche marketing.
  4. eco-labelling.

5.4 The channel of marketing in which a municipality builds a market and rents it out is called ______

  1. fresh produce markets.
  2. farm gate sales.
  3. a stock market.
  4. internet marketing.

5.5 Which one of these is not an advantage of free-marketing?

  1. Sales are for cash
  2. No middlemen
  3. Farmers receive payments immediately
  4. Farmers are motivated to work harder (5 × 2 = 10)
  1. Match the items in column A with those in column B. Write only the correct numbers and letters. (5 × 2 = 10)
    COLUMN A COLUMN B
    6.1 Advertising 
    6.2 Personal selling 
    6.3 Sales promotion 
    6.4 Publicity 
    6.5 Print media 
    A. Farmers Weekly
    B. Discounts
    C. PRO
    D. Talking to customers
    E. Radio and television
    F. Labelling
  2. Give one word or phrase for each of the following:
    7.1 A quantity of goods offered for sale at a particular price at a particular moment
    7.2 A situation in which the demand for a product is affected by price change.
    7.3 A number of activities that a product goes through after production until it reaches the consumer
    7.4 The marketing act that protects consumers from exploitation
    7.5 The form of market in which refurbished and reconditioned goods are sold. (5 × 1 = 5)
  3. The following statements are false. Replace the underlined words to make the statements correct.
    8.1 Packaging involves covering and labelling the product so that it appeals to the marketer.
    8.2 The marketing chain starts after the product has been harvested and ends when the product reaches the producer.
    8.3 Grading, packaging, cleaning and processing are part of the agri-business chain.
    8.4 The standardisation of products means the sorting of products in terms of quality.
    8.5 The Marketing of Agricultural Product Act of 2001 increased the access to markets for all farmers. (5 × 1 = 5)
  4. Define each term below. Then, for each term, outline FOUR factors that affect it.
    9.1 Supply (2 + 4 × 2 = 10)
    9.2 Demand (2 + 4 × 2 = 10)
  5. Read the passage below and the answer questions that follow.
    Jabu Sithole wanted to establish a co-operative society. She made copies of the identity documents of her relatives and registered the co-operative society under the name Siyakhisana. This society would concentrate on vegetable production and processing.
    She used all her money to finance the activities. Unfortunately, the business failed.
    10.1 Give two reasons for the failure of Siyakhisana Co-operative Society. (2 × 1 = 2)
    10.2 Suggest and discuss three principles that should be applied in the functioning of a co-operative. (3 × 2 = 6)
    10.3 Describe how directors of a co-operative society are selected. (1 × 1 = 1)
    10.4 Give the term used to describe working together and sharing among co-operative society members. (1 × 2 = 2)
  6. Compare the following:
    11.1 Primary and tertiary co-operative (2 × 1 = 2)
    11.2 Co-operative and controlled marketing (2 × 1 = 2)
  7. List three disadvantages of free-marketing. (3 × 1 = 3)
Last modified on Friday, 18 February 2022 11:17