Branding a Commodity
There is no doubt that prices for horticultural produce are influenced by several factors that equally depend on the conditions of supply and demand. Location, seasons, storage, and the need for ready cash are some of the factors that influence supply. Demand for agricultural products originates from the consumer perspective and it often involves several intermediaries, quality of the product, and price (Labaste, 2005). For this reason, marketing agricultural products incorporates considering the logistics involved in sales, purchasing, transportation, storage, financing, and other added risks. Sales and purchases involve exchange of ownership, storage entails transferring surplus products to periods of shortage thereby putting into consideration the time dimension factor, and financing are the costs incurred in the marketing process. Added risks refers to the damages, losses, and any other inconveniences that might impair the quality of agricultural produce.
When compared to marketing other Fast Moving Consumer Goods, the marketing process for agricultural produce is long and archaic. This is attributable to several stages the product passes before it reaches the final consumer not mentioning the middlemen involved in the marketing process. Second, marketers for horticultural produce run a higher risk of failing to secure a suitable market and at a suitable price. Reliability of the market between consumer produce is different as compared to the reliability of other Fast Moving Consumer Produce except in situations that involve direct marketing. Many a times, marketing horticultural produce lacks an agreed standard rates and measures. Biased measurement scales can be detrimental to the levels of profits that a farmer can generate. Another major difference occurs in the area of price determination. Prices for horticultural produce are subject to high fluctuations in price. Delayed payment is also another major obstacle faced by farmers during the marketing of horticultural produce as compared to other Fast Moving Consumer Goods.
Justification for branding commodities
The recent increase in branding of commodities by several food chains replaces the traditional roles played by farmers in the production and supply of food chains to wholesale markets (Docherty, 2012). Even though branding commodities reduces the total value of products obtained by farmers, it plays a greater role in relieving suppliers from the challenges associated with marketing such commodities. Other than minimizing the supply and marketing challenges, branding of products that were traditionally referred to as commodities provides convenience and price reliability to consumers (Betts, 1994). Consumers are certain to access products of their choice at specific prices and locations. Another justification for branding commodities is that it enhances the value of the commodities. The increase in value ensures that it builds preferences as compared to other competing products. In turn, it increases the long-term sustainable advantage of the branded product. In environments characterized by intensified competition, branded commodities are likely to outshine non-branded commodities (Docherty, 2012). This can be attributed to the desire of consumers to identify themselves with unique brands.
Branding also ensures that commodity branded products can be marketed through promotions just like other Fast Moving Consumer Goods. Marketing statistics show that many consumers are responsive to promotions particularly for products that not known to many consumers. To sum up, branding of commodity products provides the best option for marketers to escape from the aspects of commoditization in addition to providing long-term competitive advantages.
Reference List
Betts, P. 1994. Brand Development: Commodity Markets and Manufacturer-
Retailer Relationships. Marketing Intelligence & Planning, 12(9), pp.18 – 23
Labaste, P., 2005. The European Horticulture Market: Opportunities for Sub-Saharan
African Exporters. World Bank Publications
Docherty, C. 2012. Branding Agricultural Commodities: The development case for
adding value through branding. Summary Paper
