Marketing Management of Livestock/Livestock Products
Markets exist when ever buyers and seller can be in touch with one another. Buyers and sellers may not necessarily meet face to face before a market exists. In this era of electronic telecommunication. A dealer in livestock products in Lagos or Abuja can within seconds arrive at decisions of which products to buy or sell and at what prices.
However, in day application, markets are places where people meet to buy and sell commodities. Markets exist in both rural and urban areas. Since it is well known that livestock products are mostly consumed in urban centres on daily basis, the bend is for business men to but from rural markets and sell in urban markets.
Marketing is concerned with all stages of operation which aid the movement of commodities from farms or local markets to consumers which are mostly found in the urban areas in case of livestock products and these include for animal products durable animal stalls for goat, sheep, poultry when animals on sale will not be affected by the vagaries by the wealth as intense heal of the sum, and rainfall, abbart air facilities of handling, slaughtering and processing of carcass, storage facilities such as infrigerators/ cold rooms to those unsold meat, and the eggs and milk to prevent deterioration, transport facilities etc.
These must be provided at varying costs by dealers, governments or middlemen. Unless these aspects are understood a taken into consideration by consumers, or dealers alike. These is the usually tendency to believe that marketing costs arc the principal causes of high process of animal products and that some of the functions performed by middlemen are unnecessary.
Characteristics of Livestock/Livestock Products in Relation to Marketing
Livestock/ animal products are different in a number of ways from other agricultural goods or commodities. These peculiarities to influence their marketing in a number of ways and they include:
Livestock are alive must continue to feed even when they are in the market. So provision must be made for their feeding otherwise they will lose condition before they are sold.
The are alive and transporting them from one place to another and involve a lot of stress which leads to reduction in weight or and value. A lot of care is required in transporting them from distant places otherwise much don will be sustained due to loss of condition and morality. This is mostly felt with chickens, pigs and small ruminants.
Some types of poultry such as broilers are best produced for certain seasons of the year (festivities) thus unless these are ready off season marketing outlets producers must be careful to avoid setting involved in fruitless ventures when they produce off the season.
Most of the livestock products such as meat, eggs milk are perishable, then these must be relevant arrangements to handle unsold products to prolong shelf-life and avoid human does losses. Care must also be taken while transporting them since heak down of delivery trucks within immediate alternative will lead to condemnation of products.
In Nigeria livestock production is mainly in the hands of peasants and private farmers who supply the animals in the market based on personal needs and mostly not as business. Dealers or trader must have to 80 to rural markets to buy and transport to the urban markets. Thus a lot of risks are involved.
Marketing Services for Livestock Products
A number of marketing services are involved in distrinleut and their products toconsumers throughout the country. In __ these services it is important to note centres of production for the various farm animals. For instances
Most of the cattle and about 60% of the small ruminant in livestock trade are produced in the Northern savanna belts i.e. science sudan and sahel savanna regions of the country, while only the indigenous cattle of the rain forest belt and about 40% or small ruminants mainly of the equationed rain forest types are produced in the Southern rain forest belt.
Chicken (about 60%) composed of the indigenous Nigerian chicken and commercial egg producing and broiler chicken are reared mainly from the middle belt to the rain forest, region 40% of the chicken reared in Nigeria are reared in the Northern savanna belt. It is important to note that in order to augment local supply, some quantity or dressed chicken and turkey are imported also
Pigs are reared mainly in the rain forest and middle belt region of Nigeria. Pig production in the Northern states is carried out areas where Muslim region can permit its rearing. Therefore marketing services must include handling, transportation, Grading, financing and risk rearing, storage
Involves all necessary practices carried out from the point the middlemen or traders purchase the animals till they reach the market there include checking the animals for possible infection, feeding, loading them for transportation in such a way to avoid unnecessary injuries, suppocation/strangulation, watching over them while on transist to prevent fighting/stampede possible death. These are necessary while transporting live animals from North to Southern urban markets
Can be undertaken by various calegones of people in the marketing channel. This might be done by the farmer himself in care of cattle and small ruminants, the layer or the whole sales. Where live animals are collected over a distance and from various farmers or rural markets, transportation to final destination may account for a large proportion of the marketing costs.
Means the separation of live animals into uniform sizes economic value or set. This helps the seller to plan the prices and helps the consumers also in selecting the type of animal he wants. It especially useful in export market in such as in importing lives neighbouring countries like Nigel and Chad. Grading becomes distant to the farmer if the price differential can be transmitted back him and this may act as an incentive for him to concentrate in the production of high grade animals. In livestock grading is not as effective as in crop such as cocoa, groundnuts, etc. where distinct grade are allocated to produce.
Is also an important marketing services because all the stages described so far need some form of capital. Capital is needed for transport handling etc
The trader must accept various risks, some of which include possible loss of animals due to mortality, diverse financial loss arising from loss of condition due to starvation and stress of transportation of product a sustain steady supply.
Marketing Agencies for Livestock/Product
Marketing agencies may be individuals, co-operation government departments or corporation. They carry out marketing functions and after marketing service. These categories of agents can be mentioned for livestock marketing these include. On the farm buyers; whole sellers and retailers. The on-the-farm layers include sometimes itinerant farmers going on foot or by local transport from one farm to the other arranging to purchase animals from farmers. They may be suppliers to wholesalers who buy from several local markets and assemble their animals for transportation to urban areas. The wholesaler might also be involved in the important of livestock from neighbouring W.A. countries on regular basis. Wholesaler have three subgroups namely the wholesaler agent, the wholesaler transporter and the wholesaler retailer. Together, they perform important functions like sorting, grading and risk-bearing. The wholesalers supply the urban markets from where retailers buy for slaughtered and sale of meat.
The retailers also have three subgroups namely. The sedentary or stall retailer who buy live animals from wholesalers and sell to customers, the butchers who may be either individuals or groups (co-operatives) that buy from wholesaler or retailer and slaughter the animals to supply meat to the public. There may also be ititerant meat retailer who buy from butchers and move from place to place selling fresh meat (meat hawkers) owners of meat shops of supermarkets are meat retailers
A similar arrange meat exist in the marketing of eggs. Since fresh milk is product in the country, marketing of fresh milk and the responsibility of the normads. These seems to be no organized market and system for fresh milk products in Nigeria.
Points of contract for carrying out marketing functions
These are four possible points of construct for carrying out marketing functions. These include:
Local assembly market
Central wholesale market
The Produce-Consumers market
For livestock are those where the producers sell directly to consumers. This is seem in local markets such as Kpiripiri, Okwo, Effium and Orba markets when farmers bring their animals sell directly to consumers who may buy for personal reasons or for slaughter and processing into meat for sale to consumers desiring fresh meat. This is sometimes the cheaper source of purchase for consumers.
Local Assembly markets
Are usually located near farmers. This is a market where wholesalers assemble livestock sold to them by various categories of farmers. Local assembly market for cattle, a small ruminants exist in various part of Northern Nigeria.
The Central wholesale market
Are exemplified by the cattle, small ruminant markets usually located near urban centres and as the Ganiki markets at Awka, Onitsha etc. here who salers from local assembly markets display their animals for sale various categories of buyers/consumers buy from this source.
The Retailer market
In this case include butchers and dealer live animals who may buy some leach of animals and transport them to smaller urban communities where they sell to small-time retailer butchers. A retailer may buy goats from Ganiki, Enugu, or Obollo Afor and transport them to Abakpa market, Abakaliki for sale to small time retailers/butchers. The small ruminant market at Abakaliki is a food examples of the retail market.
The margin is another important __ in marketing. This represents the difference in price paid first selles and that paid by the final buyers. In the market animal products, a lot ofmiddlemen are involved.
Source of supply
Animals are produced by small fanners scattered throughout the country. It is usually difficult assembling the animals for efficient marketing, the problems incurred in doing this often research in continued increases in marketing prices.
Lack of Transport Facilities
Transportation of livestock and other goods is controlled by private entrepreneurs who determine the transport costs based on availability and costs of vehicle parts, petroleum and ruminants, distance to destination and condition of the roads. Transport accounts for a large proportion of the marketing costs and contributes significantly to the steady increases in price oflivestock products.
Lack of efficient Handling Processing and Packing Facilities
This is mostly experienced in the meat production. These are little or no facilities for efficient handling of animals before and during slaughter as well as processing facilities. This largely contribute to the reduction in the quality of meat sold to consumers at prohibitive prices
Inadequate Storage Facilities
These are usually a deaths of appropriate facilities to those meat and other livestock products. Refrigeration facilities which seem to be the most appropriate belong to individual entrepreneurs who change substantial amount before the products are stored. At times dealers have little or no ideas about the best way to handle products before refrigeration. This results in sale of substantial products,
Growth of Urban Centres
This creates more marketing problems since it affects supply of the various animal products. The increase in urban population and the improvement in living condition of feeding habitats seen in urban centres lead to increased demand for livestock product. This resulting to continued increase in price per unit of product.
Instability of Prices
Prices of animal product are manipulated by speculators, middlemen who form all sorts of association/union these determine the price of products to the detriment of the consumer. The supply pattern also contributes significantly to fluctuation in prices of products.
Inadequate research on Marketing
Until recently emphasis had been on producing more animal products without considering how they will be marketed to that they set to consumers at affordable prices. These is need understudy all the factors involved in distribution of livestock product from the farm gate to the final consumer.
Lack Uniform measures
In the livestock markets weighing scales a measure are used even in abbations
weighing scales as used. This results in irregularities where consumers may more unit for live animals/products live price day depends on laggline.
Demand is defined as the quantity of a commodity that buyers are prepared to buy at each specified price in a given market at a given time. The demand curve scopes downwards from left to right and demonstrates the law of demand which states that other things being equal more of a commodity of q1is demand at a lower price p2 than is demanded at a higher price (p1) for q1 as shown in the figure below.
The Demand Curve
This law applies also to livestock products for instance in urban markets where consumers who understand the value of meat abound, more meat will be demanded when the price per kg is low than when it is high. However, in the rural areas meat milk or eggs are repanledenough resources to do so namely (i) To entertain a visitor (ii) For sacrifice to ideas, for a sick member of family, for festivals etc. this situation is not the same for other staple foods such as yam, garri cassava etc, that must be produced no matter the costs.
Factors influencing demand
Price of a commodity influences the demand for that commodity in the demand curve the down wards shift of price from p1 to p2 lead to the increase in quantity demanded from Q1 to Q2 all things being equal. When the demand curve shifts to the left from DD to D1D1as shown in the figure below these is a decrease in demanded with the price remaining unchanged. With higher demand curve D2 D2, a layer quantity of the commodity curve is demanded at the same price. Several factors may cause a change in demand. They include; chances in tastes and preferences, income, prices of other goods, population, consumer expectation advertisement of technology.
(1)Changes in tastes and Preferences
Consumers change their preferences for certain animal products. In Nigeria, for example the taste for part has increased considerably in recent times. This change may be due to the realization of the quality of part due to its low level of cholesterol being white and not red meat. This slight means that more park will be demanded even micro and macro Economics in Animal Production.
Supply of Demand for Livestock Products
(a) Utility and Demand Curve
Utility is the capacity of a commodity to give satisfaction, Utility does not necessarily mean usefulness. Different people buy different commodities and derive different amounts of utility from them. The same commodity may also have different amounts of utility for different people or for same person at different times. A consumer would normally rationalize purchases to receive maximum utility from the limited money available. People are less willing to spend money on a commodity they already have. For livestock products notably meat, milk and eggs utility is guided by physiological and Economic factors. The health status of the consumer as well as his resources determine to a large extent the utility to be attached to each animal production. There are different utility for egg, meat and milk depending on the age of the consumer. Egg and milk have different utility for infants compared to adults. Meat might not mean much for a vegetarian persons in the low income group may prefer beans, oil bean, and other vegetable protein a carbohydrate foods to meat milk and eggs because of their economic position. These factors determine the extent consumers would rationalize purchase of animal products to receive maximum utility from the resources available.
The Law of diminishing Marginal Utility states that there is a tendency for marginal utility to diminish as the rate of purchase for the same commodity per unit time increases.
Marginal utility is defined as the amount of utility derived from the marginal unit of a commodity, the marginal unit is defined as the last unit of a commodity that an individual buys. For instance a consumer who pays N200.00 for a kg of beef may not want to pay same price, for additional meat since his need for meat is now less thus he may want to pay less for extra quantity of meat, and the last unit of meat the consumer purchases is the marginal unit.
The law of diminishing marginal utility is the basis for the individual demand curve which shows for each price how much of a particular commodity a consumer would buy.
Price is the amount of money paid for a unit of a commodity and hence is a measure of utility of that unit to the consumer. If price of pork remain constant.
(2) An increase in consumers income can increase his purchasing power and this leads to an increase in rate of purchase at each alternative price which shirts the demand curve to the right. In the urban communities, wage increases after result to positive changes in demand for various animal productions such as meat eggs and milk. The consumers pay packets can accommodate regular consumption of these products which are usually more costly than staple food item such as beans, peas. Yam, rice, corn, millet etc. similarly a decrease in income will reduce demand and shift the demand curve to the left. A decrease in income may result from inflation which reduces purchasing powers, wage costs due to taxation.
(3) Prices of related goods: Two types of relationships can be identified between commodities. Two goods (A; B) are substitutes or competitive goods if an increase in the price of one (A) shifts the demand curve of the other (B) to the right. For instance fish and meat. An increase in the price of fish which is popularly consumed by the rural dwellers and low income earner will cause a shift in the demand for meat to the right as shown in the figure below. If the price offish rises, consumers will switch to beef.
Two goods complement one another if an increase in the price of one (A) shifts the demand curve of the other (B) to the left; ie with Price of B unchanged less of B is now demanded. Examples of complementary goods for edible animal products is rather nonexistent. However tea and sugar are complementary goods as shown in Fig b.
(b) Complementary relationship
(4) Population: change in the size and composition of the human population can influence the demand for a commodity. An increase in population is likely to lead to an increase in demand for most commodities including livestock products. An increase in the population of infants will likely lead to an increase in demand for milk while an increase in the population of enlightened adults will cause an increase in the demand for meat and eggs. In both cases the demand curve shifts to the right.
(5) Future Expectations: Consumers expectations may influence demand. A consumer is likely to buy more of a commodity today if the price of that commodity is about to rise. This is only possible in respect of animal products in the short run because they are perishable and may even lose quality if stored for so long a time with food storage facilities.
(6) Advertising: Consumers may buy more of a commodity if they are educated or influenced by effective advertising. For instance if medical experts advice that pork should be eaten more than beef due to its low cholesterol content, it is likely going to shift the demand curve for pork to the right.
(7) Technical Innovation: New technical procedures for processing meat eggs and milk in Nigeria will altimately lead to a positive shift in the demand for these products. For instance if acceptable procedures for converting beef to corned beef, egg to powder or flakes and milk produced locally to powder, the demand for these products will rise.
Supply is defined as the quantity of a commodity that sellers are ready to sell at each specified price in a given market at a given time. The supply curve slopes upwards from left to right as shown in the figure below. More of a commodity will the supplied at a higher price than at a lower price.
A short run supply curve
Factors affecting Supply of animal products
A change in quantity supplied is usuallycarried by a change in the price of the commodity itself, all other factors remaining unchanged. It is movement in supply curve from Ql to Q2. A change in supply or shifts in supply curve is caused by changes in factor prices, technology and management, future expectations, weather and even fiscal policies.
Factor Prices: An increase in the factors of production such as feed, drugs and labour costs leads to increased production costs for egg and chicken. This will cause a shift in the supply curve to the left as shown in the figure below i.e. S to S1 so that at the same price ?o the quantity of eggs or chicken supplied falls from Q0 to Q1.
Technology and Management
New ideas as well as readjustments of existing factors of production may lead to lower costs of production, mechanization of feeding and watering or egg collection will reduce labour costs in commercial egg production business and subsequently reduce the cost of production. The increase in production of eggs that result will lead to in the supply of the commodity.
3. Weather: Weather is a very influential factor in livestock production. It determines the amount of forage to be available for ruminants. In which case if there is insufficient rainfall, forage production will be low a subsequently the growth rate of cattle of small ruminants. Weather affects pig production and also poultry production, both directly in terms of stress and indirectly by affecting availability of feed ingredient. Conducive weather leads to improved growth and productive performance in subsequently more animal products will be supplied.
4. Future Expectations: If a producer fears that the demand for eggs is declining and will continue to decline in the future, he is likely to switch the factors of production to production of broilers or pork. The supply of eggs will decrease as a result.
5. Fiscal Policies: Polices of government that affect availability of feed ingredients will ultimately cause a reduction in quantity of animal products (poultry and pork) produced. A good example was the ban on importation of fishmeal and Opaque II maize which considerably affected the output of poultry industry in the future. This affected supply negatively. On the other hand, the ban on importation of frozen meat especially chicken and beef resulted in a positive increase in the supply of these products from local industries.
This is different from marketing of primary product because in the Agric business sector there are different products which are not just the cassava tuber themselves but processed into garri, fufu etc. Same with yam tubers into yam flour, pounded yam etc.
Marketing management is the study of the process by which products flow through the system from producers to consumers in the food relationship chain. The interest here includes: –
Note here that, there is need to understand consumer’s needs.
Marketing management function includes: –
Advertising (2) Market research (3) New Product Development (4) Pricing (5) Selling (6) Customer service (7) Fiscal distribution etc.
All these are focused on your customer or consumer since the business cannot be successful without them. Why? Because, the best advertisement of your goods is a satisfied customer. Without them, no business can be successful.
Marketers in marketing management have to be up and doing in order to recognize the changing needs of individuals. Decision to be taken by a marketer in market development are the followings:
What products to produce?
What service to offer?
What price to charge?
What information to provide?
How to promote the product?
How to distribute the product?
All these must be answered by marketing management.