Institute of Food, Nutrition and Human Health

Paper 119.180

July 2012

Food marketing - key terminology

Food - eaten daily by everyone in the world

Food products biological materials from the land and sea. They are needed for the nutrition and health of

the consumers

Food system - a biological system from initial production to final consumer

Consumers driving force of the food marketing system

Needs states of felt deprivation

Wants form of human needs shaped by culture and individual personality

Food system

Modern food system complex, dynamic and international

World food and beverage market

estimated value in mid 1990s $2.7 trillion

estimated value in 2008 $5.7 trillion

Forecast value 2014 - $7 trillion

Dairy is our life's work. It's our passion and it's what we do best.

Global food system

What is marketing?

The management process responsible for identifying, anticipating and satisfying customers requirements profitably (Chartered Institute of Marketing)

The achievement of corporate goals through meeting and exceeding customer needs better than the

competition (Jobber, 1995)

corporate activity involving the planning, pricing, promotion and distribution of products and services to

satisfy customers current needs and anticipate and

create their future needs (Kotabe et al., 2005)

Agri-food and food marketing

Agri-food marketing the sum of the processes, functions and services

performed in connection with food and fiber from the farm on which they are produced until their delivery into the hands of the consumer (Ricketts and Rawlings, 2001)

Food marketing the activities needed at all stages in the food system

to facilitate the exchange of food products and services which satisfy the needs and wants of individual consumers and organizations (Schaffner et al., 1998)

Food marketing - specific characteristics

Consumers almost 7 billion world population

Product is perishable

Product is purchased on a continuous basis

Products require special handling

Rapid inventory turnover

World population

UN 2008 estimates and medium variant projections (in millions)

Year World Asia Africa Europe Latin America Northern

America Oceania

2000 6,115 3,698 (60.5%) 819 (13.4%) 727 (11.9%) 521 (8.5%) 319 (5.2%) 31 (0.5%)

2005 6,512 3,937 (60.5%) 921 (14.1%) 729 (11.2%) 557 (8.6%) 335 (5.1%) 34 (0.5%)

2010 6,909 4,167 (60.3%) 1,033 (15.0%) 733 (10.6%) 589 (8.5%) 352 (5.1%) 36 (0.5%)

2015 7,302 4,391 (60.1%) 1,153 (15.8%) 734 (10.1%) 618 (8.5%) 368 (5.0%) 38 (0.5%)

2020 7,675 4,596 (59.9%) 1,276 (16.6%) 733 (9.6%) 646 (8.4%) 383 (5.0%) 40 (0.5%)

2025 8,012 4,773 (59.6%) 1,400 (17.5%) 729 (9.1%) 670 (8.4%) 398 (5.0%) 43 (0.5%)

2030 8,309 4,917 (59.2%) 1,524 (18.3%) 723 (8.7%) 690 (8.3%) 410 (4.9%) 45 (0.5%)

2035 8,571 5,032 (58.7%) 1,647 (19.2%) 716 (8.4%) 706 (8.2%) 421 (4.9%) 46 (0.5%)

2040 8,801 5,125 (58.2%) 1,770 (20.1%) 708 (8.0%) 718 (8.2%) 431 (4.9%) 48 (0.5%)

2045 8,996 5,193 (57.7%) 1,887 (21.0%) 700 (7.8%) 726 (8.1%) 440 (4.9%) 50 (0.6%)

2050 9,150 5,231 (57.2%) 1,998 (21.8%) 691 (7.6%) 729 (8.0%) 448 (4.9%) 51 (0.6%)

Approaches to food marketing

Functional approach activities are grouped into functions

Physical manufacturing, processing, packaging, transportation, storage

Exchange selling and buying, risk bearing

Facilitating standardization, financing, market intelligence, communication,

advertising, promotion

Approaches to marketing

Institutional approach activities are grouped according to the institutions that perform these functions

Private sector

Cooperatives

Future markets

Government

Production

Services

Rules

Facilities

Middleman - intermediaries between producers and consumers (agents,

brokers, dealers, wholesalers, distributors, etc.)

Approaches to marketing

Behavioural approach how firms adapt to changes in:

Production systems input and output

Consumer preferences

Communication systems

Information systems

Supply chain management approach integration of business processes from end users

through suppliers that provide products, services and

information that add value to the customers