Effective marketing channels for agricultural marketing - Agribusiness Education and Research International

Effective marketing channels for agricultural marketing

The pathways that agricultural products take to get from farmers to consumers are called marketing channels. Depending on the quantity to be transferred, the nature of customer demand, and the level of regional production specialization, the length of the channel differs from commodity to commodity.

According to Moore et al., there are several definitions of a marketing channel. However, in their case, the marketing channel is the network of middlemen that transports different food grains from producers to consumers.

Farm products are sold from farmers to consumers through marketing channels and institutions. The majority of farm produce does not go directly from farmers to consumers. Through several organizations, agencies, and channels, the majority of farm products are distributed to consumers. Due to their vital marketing functions, marketing agencies and institutions play a very important part in the marketing system. They also provide agricultural products with more value and aid in the expansion of their markets.

A product’s production isn’t finished until it gets to the consumers, who are the ones who need it. Due to differences in agro-climatic conditions, not all commodities can be produced in all places. Their transition from producers to consumers is therefore necessary.

Agricultural products are delivered to customers via two primary channels:

Direct Route: Occasionally, agricultural products are sent straight from farmers to consumers. There are no brokers or middlemen at all. However, a relatively small percentage of agricultural commodities are transferred straight from producers to consumers.

The indirect route: The indirect route is when agricultural products are often transported from farmers to consumers via middlemen or intermediaries. Intermediaries can range in number from one to several. The distance between the manufacturer and the consumer has grown both horizontally and vertically in the current period of specialized production, which has led to a decline in direct sales. Because a significant portion of the produce passes through them, the function of market intermediaries has grown recently.

Elements Impacting Marketing Channel Length

Agricultural marketing channels differ from product to product, nation to nation, lot to lot, and periodically. For instance, there are differences in the marketing channels for food grains and fruits. In the marketing of fruits, packagers are essential. The final form in which consumers seek a product depends on how developed a society or nation is. For instance, people in industrialized nations want to see an increase in packaged processed goods.

Bread needs to be the source of wheat. The majority of enables must be properly prepared and packaged before being delivered to customers. In these kinds of communities, processors are in charge.

But in underdeveloped nations like Bangladesh, most food grains are bought by consumers unprocessed, and processing takes place at the consumer level. Once more, the lots that originate on small farms take a different course or use different channels than those that originate on large farms.

For instance, produce from small farms is typically sold to village traders; it could or might not make it to the main market. That being said, big farms typically sell their produce in the main market, where wholesalers buy it. Food sold just after harvest typically goes through a longer channel than food sold later in the season. The length and quality of Bangladesh’s farm product marketing channels have changed significantly due to the country’s growing transportation and communication networks, shifting demand patterns, and the growth of its markets.

Agricultural Product Marketing Channels (based on sales)

Produce is often circulated from farmers to consumers through a conduit known as the marketing channel. Consumers are the most terminal in this circulation process, and farmers, or producers, are the starting point. To get goods to customers, a bridge connecting producers and consumers must be established. Currently, the most significant sales channel utilized by manufacturers and retailers is the development of networks, both online and offline. Agricultural product information can be transferred efficiently and rapidly using the network sales platform. One major obstacle preventing the rural economy from developing faster than it has been is the inability of the current agricultural product marketing channels to match modern living standards as the market economy and farm economy have grown. A pattern of many marketing channels existing at the same time has arisen as a result of decades of development, during which time the marketing channels for agricultural products have been continuously innovating to find more suitable channels for agricultural products.

Direct sales

In the agricultural trade market, or wholesale market for agricultural and ancillary products, the producer directly sells to the consumer under the direct sale type. Transporting the necessary products directly to the market and selling them to customers makes this type of sales method, which does not include any middlemen, extremely simple. In addition to saving money by eliminating the middleman, this sales method will require a significant investment of time and materials, as well as some supply and demand and non-loss risks.

Multiple-tier sales

This type of sales mode describes the presence of multi-layer wholesalers that sit between farmers and customers, with products that can be sold to customers via a variety of channels. In the midst, multilayer wholesalers raise prices by either lowering the buy price or raising the sales price, decreasing farmers’ revenue and failing to comprehend customer wants, creating uncertainty in the market.

The sales processing method used for marketing

In this model, wholesalers go straight to farmers to buy things from them in bulk. They then process the goods after buying them to raise their price, sell them to customers, and be paid a commission. The wholesale modality holds the most significance. Products are uniformly bought by wholesalers. They package, first process, and then sell the products through businesses. In this sense, wholesalers frequently maintain low prices, the expense of initial processing and shipping is excessive, and the price of goods in the hands of customers has increased by at least twice.

The Agricultural Products’ Effective Marketing Channels in the Artificial Intelligence (AI) Environment

Artificial intelligence growth is altering our lifestyles and consumer habits, which has a significant effect on conventional marketing strategies. However, there are currently few studies on the use of AI in the promotion of agricultural products.

Investigate the channels through which agricultural products are marketed, conduct in-person interviews and field visits with self-employed households and agricultural businesses, survey consumers using a questionnaire, and utilize the results of the survey to analyze and investigate the opportunities and challenges associated with agricultural product marketing through new media. According to the trial results, supermarkets or convenience stores are preferred by 100% of consumers who choose to purchase agricultural products online. In contrast, the wholesale market for agricultural product trading is chosen by 0% of consumers.

Shoppers who do not want to purchase agricultural items online primarily choose supermarkets or convenience stores, with only 32.6% choosing to purchase from the mobile vegetable market. The percentage of buyers who opt for the agricultural goods trade’s wholesale market is zero percent. A successful strategy for building a devoted customer base is to use new media marketing to penetrate the offline retail space, including supermarkets and convenience stores.

Analyzing How the Marketing Model Influences Consumers’ Purchase Behavior Regarding Agricultural Products:

A single internet retailer is no longer the only way for customers to learn about and buy agricultural products. The marketing approach adapts to the multiplicity of media platforms and types. Relevant questions are also emphasized in the questionnaire survey in light of the influence and function of artificial intelligence and new media on consumers in the field of marketing agricultural products. More efficient marketing plans and techniques are suggested in light of the objective data and current circumstances.

As per the poll, the most appreciated features by customers include social forum celebrity recommendations, microblogging, group purchases, WeChat, and friend push information sharing. Brands or commodities that would not have been bought were pushed by this method of knowledge sharing. The aforementioned illustration illustrates that the primary goal of this type of new media marketing is to strengthen the bond between commodities and consumer demand. For example, local specialty five-grain assorted Nutty items and other natural products are for snack lovers who are also concerned about their health; food is for consumers who prioritize health and beauty.

Agricultural product companies should first conduct an investigation and analysis of the target consumer’s background, consumption patterns, and regional customs. They should also use social media platforms like QQ group voting, WeChat voting, microblog voting, and other channels for this purpose. Afterward, they should combine the available big data for analysis, identify the segments that can best meet the needs of their target market, fully utilize the versatility of agricultural products, and establish their internal brand. The best way to ensure cultural identity is to effectively position our brand and include it in all facets of product research and development as well as marketing tactics.

Read more: Why is market information important?

Examining Consumer Purchase Patterns Regarding Agricultural Products

Based on the results of the poll, supermarkets or convenience stores are the preferred online shopping destinations for 100% of customers purchasing agricultural products; on the other hand, the wholesale market for agricultural commerce is chosen by 0% of consumers. Just 32.6% of customers also opt to purchase in the flowing vegetable market; those who do not purchase agricultural products online typically shop at supermarkets or convenience stores; the remaining customers select the agricultural trade wholesale market. 0%, for instance.

Potential customers of agricultural products online shopping are frequently those who have reasonable expectations for the shopping environment and the experience of acquiring agricultural products. When buying agricultural products, price is not the most significant consideration for them. When it comes to actual consumption, the mobile agriculture market will eventually be replaced by supermarkets and convenience stores that sell fresh fruits and vegetables. Because of this, we can effectively target this segment of the market in our agricultural product marketing strategy and manufacture high-quality items.

Supermarkets, convenience stores, and other offline physical stores represent the main battlefield for certain large-scale agriculture and ancillary product businesses. A thorough new media marketing strategy can open these doors and also help build a devoted customer base.

The amount of data on Internet media platforms and other application software is constantly changing in the age of artificial intelligence. Data will become valuable assets and a crucial foundation for business behavior analysis. Agricultural product businesses, on the other hand, are latecomers to the e-commerce scene and provide unique goods. They have been growing quickly in the last few years. They need to stay abreast of market trends, focus on enterprise products, observe consumer behavior, and gather big data relating to the target market. Since artificial intelligence generates data that is near the consumer, they can gain a deeper insight into their psychology and needs. In the chain of distribution for agricultural products, better proximity to the consumer increases the discourse power and allows for the launch of more competitive items.