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Market Planning - PowerPoint PPT Presentation

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Market Planning
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  1. Market Planning

  2. Marketing Decision A marketing plan answers the following questions • When to price • Where to price • What form, grade, or quality • What services to use • How to price • When to price and deliver

  3. Steps in Market Planning • Specify goals • Determine production schedule and volume • Estimate production costs • Project market prices • Make the marketing decisions

  4. Specify Goals • Sell at top price • Sell in top 1/3 of price range • Cover total costs plus growth requirements • Cover cash requirements

  5. Determine Production Schedule and Volume • Timing of production available • Harvest • Weaning • Date off pasture • Beginning Inventory + Production - Farm Use - Projected Ending Inventory = Marketable amount

  6. Estimate Production Costs • Enterprise and whole farm budget • Determine breakeven price to cover variable costs • Determine breakeven price to cover fixed costs • Determine breakeven price to cover profit and growth

  7. Projecting Price Factors that influence price • Demand • Supply • Demand and Supply Balance Systematic Price Variations • Trends • Cyclical movements (cattle cycle) • Seasonal price patterns Market information and Projections

  8. Factors that influence price • Demand • Supply • Demand and Supply Balance

  9. Systematic Price Variations • Trends • Cyclical movements (cattle cycle) • Seasonal price patterns

  10. Trends

  11. Trends

  12. Seasonality

  13. Seasonality

  14. Market information and Projections • USDA reports (weekly, monthly, annual) • Extension forecast reports • Commodity organizations • Newsletters (Pro Farmer, Doane, Kiplinger, others) • Private marketing firms

  15. When to Price • Pricing decision can be separated from delivery decision. • Pre-harvest (forward pricing) • At harvest • Post-harvest (storage decision)

  16. Where to Price • Considerations • Transportation costs • Fuel costs • Shrinkage (livestock) • Services provided • Additional marketing services • Hours of operation • Financial condition of market outlet

  17. What Services to Use • Especially applicable to input purchases • Hours of operation, variety of products available, repair services, etc. • Credit terms • Reputation of reliability • Patronage dividends of cooperatives

  18. What Form, Grade, or Quality • Input • Bulk or bag • Delivered or applied • Products • Livestock • Cattle – calves, yearlings, fed • Hogs – feeders, finished • Crops • Hay – Horse hay, cattle hay, ground or pelleted • Vegetables – fresh, frozen, juice • Grains – feed or food quality

  19. How to Price • Cash sales • Hedging • Futures market • Options market • Forward contracting • Cash forward contract • Delayed or deferred pricing contract

  20. Marketing Plans • Project the amount to be marketed • Beginning inventory + production – farm use – ending inventory = marketable amount • Determine possible marketing methods • Cash sales, futures/options, forward contract • Determine timing of sales • Triggers by month, by price targets, or other

  21. Marketing plan tools

  22. Summary • Marketing plan will answer when to price; where to price; what marketing alternatives to use. • Marketing plan process involves goals, production schedule, costs of production, price and timing targets, and a decision.