Marketing
Marketing can be defined as the commercial functions involved in transferring goods from producer to consumer. Agricultural marketing is where the producer, the processor, the distributor and the consumer meet.
An important step in the marketing process is understanding and managing risk. Successful agricultural producers and consumers understand that risk is part of their business and take a deliberate and knowledgeable approach to managing it.
Successful market planners are constantly learning new skills such as using market options or basis contracts. They take advantage of marketing professionals who help them find ways of dealing with market risk.
Marketing decisions should be made based on their impact on long-term profitability not short term “windfalls”. The impact of marketing decisions on production, finances, and human resources should be accounted for. Managing market risk begins with a marketing plan. This plan should be based on the goals of your business, the level of profit needed, and your ability to accept risk.
The three keys to a successful marketing plan are:
- An accurate account of production costs
- An understanding of the appropriate marketing and risk management tools available
- A decision plan
Source: University of Pennsylvania College of Agricultural Sciences
