Marketing options for livestock products: Mbogoh Department of Agricultural Economics University of Nairobi P.

Box , Nairobi, Kenya Introduction Marketing options and their efficacy: Summary The producers' choice to use a particular outlet when marketing produce appears to be based on their perceived opportunity cost and the risk of non-sales if some other outlets were to be used, However, this issue needs further investigation. On the other hand, the consumers' choice of the marketing chains from which to procure their products is primarily influenced by the regularity and stability of supply, convenience at collection or delivery and the perceived hygiene and cleanliness of the premises of sale.

Price levels alone do not appear to be a key factor in determining marketing options. However, this should not be taken to imply that product pricing is not an important consideration in marketing Therefore there is need to examine and plan marketing from a total systems cum-managerial perspective.

Small-scale livestock producers cannot reasonably be expected to plan and undertake production and marketing of livestock products in strict conformity with the principles implied by a total systems-cum-managerial perspective without state support or assistance. This factor should expressly be recognised by state planners, policy-makers and the extension services. Hence those who are given the responsibility to implement livestock development projects must also play a managerial role in ensuring that the farmers are able to plan and market their livestock products, depending on local circumstances.

Introduction Marketing, as a concept, is based on two fundamental beliefs Stanton, Consequently, au the firm's activities should be devoted to determining what the consumers' wants are and to satisfying these wants while still making a reasonable level of profit. In the case of livestock producers, especially if they are smallholders, the public sector has a role to play in advising the farmers on what products are in demand and in assisting them to develop and promote consumption of new livestock-based products whenever feasible.

Because of its strategic role in economic development, marketing development has come to be accepted as a complementary activity to production development. Hence marketing may be viewed as a social and managerial process through which individuals and groups obtain what they need and want by creating and exchanging products of value with each other.

Marketing management can then be viewed as the process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services to create exchanges that satisfy individual and organisational objectives. The process thus involves analysis, planning, implementation and control, covering not only physical goods and services but also ideas. This rests squarely on the notion of exchange in which the goal is to produce satisfaction for the parties involved Kotler, From a total systems and managerial perspective, one may consider the phrase "marketing options" to relate to the different configurations of one or more of the four elements of the marketing mix.

The phrase "marketing mix" was first used by an American professor, James Culliton, who conceptualised a marketing executive as someone who was constantly engaged in creativity and fashioning out a mix of marketing procedures and policies in an effort to produce a profitable enterprise. He thus described a marketing executive as a "mixer of ingredients", these being the tools that are at his disposal in his efforts to build profitable organisations Borden, The four elements of the marketing mix are product, place, price and promotion otherwise referred to as the 4 Ps.

They provide a marketing executive with a set of effective tools with which to capture the desired market shares. The four elements are normally referred to as the "controllable variables" of a marketing executive's job. This is so because the management of any business is a very challenging task of satisfying consumers, and of also deciding on any product-related issues; setting prices and changing them whenever desired; and the distribution of products and services through various channels to reach whatever markets are wanted.

They can also decide whether to undertake promotion of their products or not and there are almost limitless alternatives of promotional mixes that they can employ if they wish. Marketing executives do not work in a vacuum, they work in an environment in which their ability to manipulate the 4 Ps is invariably constrained by a number of factors which include: These constraints constitute a set of "uncontrollable variables" that minimise a marketing executive's ability to make free decisions with regard to one or more of the 4 Ps.

From a managerial perspective, livestock production should be viewed as a business organisation. Ideally, the critical job of a marketing executive is to assist his business organisation in ensuring that it comes up with or develops the right product which is then appropriately priced and promoted in the right way and is available where needed at the right time from the consumers' point of view.

Hence, the author is of the opinion that a consideration of the marketing options for livestock products must examine the appropriateness of the various permutations and combinations of the elements of a marketing mix.

This would be an endeavour to develop practicable marketing strategies for livestock products, given the environment within which these strategies have to be implemented.

Meat and dairy products especially fresh milk, butter and cheese are the major livestock products that concern those who are interested in livestock development in sub-Saharan Africa in general and eastern and southern Africa in particular.

Such livestock development efforts must squarely depend on the development of both the production and the marketing systems. A review of available literature suggests that most of the previous marketing studies on livestock development in sub- Saharan Africa have focused on marketing systems Mbogoh and Tilahun, They have tended to give little consideration to marketing options in terms of: Hence the discussion in this paper is largely based on the development and analysis of a theoretical framework for marketing options.

However, it also draws on some relevant examples and experiences where possible. Marketing options and their efficacy: Cattle and small stock sheep and goats are the most important animal species in the market in the case of livestock development in eastern and southern Africa. From a marketing management perspective, the body condition and the liveweight of the animal are the key factors that influence the marketing of live animals.

The two factors will be related to the age and the sex of the animal and such other secondary body parameters like fleshing. These factors will thus directly influence the price at which the live animals can be sold.

Both the body condition and the liveweight of the animal that is being marketed will be influenced by the channel through which the animal reaches the market place. The types of channels used will be influenced primarily by the domestic marketing infrastructure and the type of the ultimate market being considered, i.

Many countries in eastern and southern Africa have both formal official and informal traditional livestock marketing systems. Traditional or informal marketing systems refer to systems in which governments do not substantially intervene, either directly through trading or indirectly through regulation. Trekking of live animals is a common method employed to move live animals from grazing or production areas to the market places, especially under traditional livestock marketing systems.

The choice and the use of different types of channels and transportation modes in the marketing of live animals are likely to influence the net returns to livestock producers through their effects on the cost and net prices realised in the marketing process. Experiences Producers have the option in many of the countries in eastern and southern Africa to market their live animals either through the formal or the informal livestock marketing systems.

Earlier inferences on the economic performance of informal marketing systems, as measured through the marketing efficiency criterion, tended to suggest that such systems performed relatively poorly.

It was therefore argued that the only way to improve performance was through increased government intervention. However, such inferences were largely based on casual impressions of activities in traditional market places. Detailed studies on the performance of marketing systems for live animals in sub-Saharan Africa tend to give somewhat conflicting results Ariza-Nino et al, ; Herman, ; Staatz, ; Solomon Bekure et al, Whereas the results of the studies in West Africa, Madagascar and Ethiopia suggest that the performance of traditional marketing systems is more satisfactory than that of the formal systems, a study in Kenya Solomon Bekure et al, suggests that there is no uniform picture.

This study also gives a less favourable impression of the efficiency of informal marketing systems for live animals. Marketing options for live animals appear to be relatively limited with respect to flexibility and ability to manipulate elements in the marketing mix.

The channels of distribution are relatively limited and so is the ability to ask for different prices in the same market. One is able to differentiate live animals primarily on the basis of sex, age, body condition and liveweight. This factor limits the scope for product promotion, even though prices may differ on the basis of the factor itself.

However, flexibility in pricing is more likely to be possible in the informal marketing system, but one expects that the pricing structure in the formal marketing system will somehow influence the geographical pattern of prices in the informal marketing system. The scope for the promotion of the marketing of live animals would appear to exist at the institutional level. A certain region or large farm may become known nationally for producing good quality animals, as could a certain country become known internationally for producing good quality animals.

Such a factor can be exploited when promoting the product live animals in both domestic and export markets, through the creation of individual, regional and national brand images. For example Botswana beef off the ranch is very acceptable in the European Economic Community.

Options for livestock products Dairy products fresh milk and milk products and meat especially beef are the major types of livestock products which have been accorded development priority in most countries in sub-Saharan Africa. This is especially true of donor-aided projects. As in the case of live animals, there are both formal and informal marketing systems for livestock products in most of the countries in the region However the channels through which livestock products are marketed are relatively more diverse and complex than in the case of live animals.

Dairy marketing options The main types of dairy products consumed in most countries in eastern and southern Africa include fresh milk, butter, sour milk, cheese and yoghurt. The relative importance of the consumption of the different types of products or their local equivalents 1 in different countries may be expected to vary, but fresh milk consumption is common in all countries.

Dairy producers have the option either to sell fresh milk or to process it into various types of dairy products and then sell such products, depending on local market circumstances. A number of countries in the region generally regulate and control the prices of the dairy products that are marketed through the formal marketing system.

For instance, until 21 May Kenya regulated and controlled the prices of dairy products sold through the formal channel. Ethiopia is an example of a country where prices are still regulated and controlled.

Where price controls exist, a lucrative informal channel will always arise and compete with the formal channel even in the presence of government decrees or laws prohibiting trade in the informal channels.

Prices of products marketed through the informal channels tend to exhibit great instability within and between years and as one moves from one region to another within a country.

However, such prices tend to be influenced by the prices set in the formal channels Mbogoh, Some relevant experiences The International Livestock Centre for Africa ILCA has in the past initiated and undertaken two major studies on dairy marketing options in Ethiopia, focusing on the systems in Addis Ababa and its immediate environs Debrah and Anteneh, ; Mbogoh and Tilahun, Mbogoh and Tilahun focused on the dairy purchasing patterns for Addis Ababa households and thus identified the alternative marketing systems through which these households procured their dairy products from the retail end of the marketing chains.

Debrah and Anteneh focused on the producers' marketing options by characterising the markets of first sale for fresh milk and butter. Debrah and Anteneh and Mbogoh and Tilahun revealed some interesting issues related to marketing options for livestock products.

Mbogoh and Tilahun identified the major marketing systems through which the Addis Ababa households purchased their milk and milk products. These systems basically defined the marketing options for the producers and merchants of the milk and milk products that were sold through these marketing systems. These alternative systems were: Table 1 gives the relative importance of the alternative marketing systems for dairy products from the consumers' viewpoint.

Mbogoh and Tilahun Debrah and Anteneh indicated that the importance of the different markets of first sale for fresh milk in Addis Ababa and the immediate environs varied according to the location of producers in relation to the central areas of the Addis Ababa city. Three types of dairy producers were identified in this study, namely intra-urban producers; pert-urban producers; and peasant rural producers.

The results showed that the intra-urban producers marketed their milk through different channels: Hence selling milk to individual consumers was by far the most popular marketing option for intra-urban dairy producers in Addis Ababa. However, the patronage of alternative marketing options was found to vary with the size of production: Debrah and Anteneh found markets of first sale for fresh milk by pert-urban producers to be relatively similar to those for the intra-urban producers.

KLMC, Kenya Livestock Marketing Council,

However, the pattern of the use of the different marketing options by the pert-urban producers was somewhat different from that of the intra-urban producers, and was as follows: Thus Mbogoh and Tilahun and Debrah and Anteneh more or less identified the same marketing options for dairy producers in and around Addis Ababa, but the latter study indicated which options were most significant from the producers' point of view.

Peasant producers' milk marketing options were found to vary with the distance of their location in relation to the city of Addis Ababa and the location of the milk collection centres of the statutory Dairy Development Enterprise DDE of Ethiopia Debrah and Anteneh, The peasant producers were actually found to have three marketing options, namely sales to DDE; local sales to neighbours, itinerant traders, or at local markets ; and direct deliveries sales outside production locality, to individual urban consumers, or to government and catering institutions.

Table 2 gives the relative importance of the different milk marketing options to peasant producers as established by Debrah and Anteneh Table 2 emphasises the fact that the peasant producers who were located far from major consumer centres tended to have limited marketing options. Both Mbogoh and Tilahun and Debrah and Anteneh found significant variations in prices charged or paid for the fresh milk sold through alternative marketing systems. In the case of the producers, the prices ranged from EB 0.

The study by Debrah and Anteneh established that the producers operating close to Addis Ababa produced and sold fresh milk almost exclusively but those who operate far from Addis Ababa 20 km and beyond produced and sold fresh milk, butter and cheese. Thus Debrah and Anteneh concluded that the major factor determining the types of products produced and sold seemed to be the proximity of market outlets.

Hence the producers who could sell fresh milk within a few hours of production sold milk products, unless the price structure was such that the producers would find it more profitable to convert fresh milk into processed products.

However, Debrah and Anteneh further established that the producers' milk marketing strategies were also influenced by the size of individual enterprises. Usually, the large producers opted to market most of their output through outlets that guaranteed stability of purchases even if these were less remunerative than if sales were made directly to individual consumers.

This relates to the question of perceived opportunity cost and the risk of non-sales when attempts to market through certain outlets are made. Milk packaging is a contentious issue in That it has a bearing on the pricing of milk at the retail end of the marketing chain. The widely held view is that cheap packaging material should be used as far as possible Mbogoh, However, it should be noted that packaging facilitates product differentiation and, hence, promotion if desired.

Mbogoh and Tilahun found that the consumers' choice of the retail outlets from which to procure their products was primarily influenced by three factors: Meat marketing options A review of available literature on the marketing of meat in general and beef in particular shows that red meat rather than processed or canned meat is the most marketed type of meat product. Both formal and informal channels for beef and meat marketing exist in a number of countries in eastern and southern Africa.

Experiences in Kenya indicate that the formal channel often faces stiff competition from private butchers and thus experiences major difficulties in meat marketing Chemonics International, The major cause of operational problems for the formal meat marketing channels is the fact that they often have to follow gazetted official prices, so that their marketing margins tend to be rigid and often low. This, of course, may be the case for most commodities that are traded through formal channels, but the problem appears to be more acute in the case of meat marketing.

Butchers appear to compete heavily on the basis of product differentiation. Depending on the income classes that they wish to sell their meat to, the butchers can come up with appropriately defined and priced meat cuts and each butcher may charge as much as his particular market can absorb Karugia, The scope of adopting different marketing strategies appears to be greater for meat than for milk and milk products.

Meat can be stored and marketed over longer time periods than fresh milk, especially if kept under refrigerated conditions. The location of butcheries and their cleanliness relative to residential areas will certainly influence the type of customers who buy from the particular butcheries. The butcher's prestige and the types of services offered to the customers will be important variables in meat retailing Tewoldeberhan, ; Karugia, All these factors will give rise to a permutation of possible strategies and options for meat marketing.

In this discussion, meat wholesaling is deliberately left out, since it is assumed that wholesalers will generally supply their meat to the retail butchers, the focal point in this discussion. However, some of the butchers who retail meat do sometimes undertake a wholesaling function Karugia, Promotion in meat marketing can be undertaken in many and varied forms: The possibility of processing and packaging meat greatly facilitates the ability to promote meat marketing.

The ability to promote meat marketing almost certainly depends on the ability to charge or set different prices, according to the market being aimed at. References Ariza-Nino E J. Herman L, Makinen M and Steedman C. Livestock and meat marketing in West Africa Volume 1: CRED, University of Michigan, U.

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