AGEC 340 Exam 1-Springfield
What does the following statement mean to you?
*"Agribusiness management is about the integration of science and business management."
Combining Science, Technology, and Business Management. Today's agri‐food system is
the result of:
1. The transformation of science into technology, and
2. The application of effective business management
Evolution of the Marketing System
1. Specialization and trade
2. Central markets
3. Money
4. Middlemen
The Role of Marketing in the Economy
Increases the level of consumer satisfaction in the economy.
Five Barriers to Consumer Satisfaction
1. Inability to transfer ownership (ownership separation)
2. Product is not available when it is desired (time separation)
3. Product is not where consumers need it (space separation)
4. Product is not in the form consumers desire (value separation)
5. Lack of information about the product (information separation)
Marketing finds ways to overcome these separations.
The Nine Marketing Functions
The Buying Function and The Selling Function
• overcome the separation of ownership by transferring legal title of the product from the
seller to the buyer
The Storage Function
• overcomes the separation of time by maintaining the product in good condition between
production and final sale.
The Transportation Function
, • overcomes the separation of space by moving the product from where it is produced to
where consumers desire it.
The Processing Function
• overcomes value separation by transforming a commodity into a form that has greater
value to the consumer.
The Facilitating Functions
• make the system work more efficiently The Grades and Standards Function
•overcomes information separation by providing a classification system that requires
adherence to specific descriptions of commodities and products.
The Four Utilities of Marketing
1. Form Utility-comes from processing the product into a form more desirable to consumers.
Place Utility-involves transporting the product to a location desired by consumers.
Time Utility-results from storing the product until the consumer needs it
Possession Utility-facilitates the process of gaining ownership of the product so buyers can
use it fully.
2. The function of marketing in our economic system makes sure that consumers get the
products they desire.
This means:
• insuring that the right product (form utility)
• is available at the right place (place utility)
• at the right price (possession utility)
• at the right time (time utility) to fully satisfy the consumer.
Long-Run Business Success Equation
Long‐Run
Business = Efficiency + Effectiveness + Economic Well‐Being
Success
Important Quote
*Only by satisfying a customer need does a business earn its right to make a profit
The Business Plan
The success of a business is directly attributed to
• Good planning
• Communication
• Execution
1. The first step to success is a good business plan
2. The business plan explains how the business plans to achieve success
3. Firm's Purpose: What the firm is going to do
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