STARTING OF THE

CONCEPT:
 Born In Harvard University, 1957

 “A concept of Agri-business”, written by

John David and A. Gold Berg

 Undergraduate level: In University of

Philippines, 1966
DEFINITION:
 “Agri-business is the sum total of
all operations involved in the
manufacture and distribution of
farm supplies, production activities
on the farm, storage, processing
and distribution of farm
commodities and items made from
them” (John David and Gold Berg)
 1. Input sector: supply of inputs
required by the farmers for raising
crops, livestock and other allied
enterprises.

 2. Farm sector: producing crops,

livestock and other products.

 3. Product sector: deals with various

aspects like storage, processing and
marketing the finished products
STRUCTURE OF
AGRIBUSINESS:
 Farm input sector: deals with agro-
based industries providing seeds,
fertilizers, feed, chemicals etc. Also
included industries supplying machinery or
equipment, implements and petroleum etc.

 Farm product sector: deals with

production and distribution of farm
commodities.
DISTINCTIVE FEATURES OR THE
PRINCIPLE CHARACTERISTICS OF
AGRIBUSINESS
 Management varies from business to
business depending on the kind and
type of business.

 Agri-business is very large and evolved

to handle the products through various
marketing channels from producers to
consumers.

 Management varies with several million

of farmers who produce hundreds of
food and livestock products
 There is very large variation in the size
of agri-business.
 Most of the Agri-business units are
conservative and subsistence
 The production of Agri-business is
seasonal and depends on farm
production
 Agri-business is always market oriented
 They are by far vertically integrated,
but some are horizontally integrated
and many are conglomerated
 There is direct impact of govt.
programmes on the production and
performance of Agribusiness.
MANAGEMENT:
 Controlling of 4 M’s. “Money, Man,
Machinery and Market”.

 “The attainment of organizational goal

in an effective and efficient manner
through planning, organizing, leading
and controlling organizational
resources”
FUNCTIONAL APPROACH
TO MANAGEMENT:
 1. Planning
 2. Organizing
 3. Directing
 4. Controlling
 5. Co-ordinating
 6. Communicating
 7. Motivating
PLANNING:
 Most fundamental functions of
management.
 Planning is not a forecast but an action
oriented statement.
 “What to do, How to do, Whom to
do and when to do.”
 The forward thinking (looking ahead)
about course of action or activity
(developing alternatives)based on full
understanding of all the related factors
and directed at specified objectives
CHARACTERISTICS OF A
GOOD PLAN:
 Clear objectives

 Proper understanding

 Comprehensive

 Flexible

 Economical
IMPORTANCE OF
PLANNING:
 Agri-business is a more complex activity.
 Planning is essential for the business
survival and development
 Planning reduces risks and safeguards
against uncertainty
 Moves the things in a right direction
 It improves operational efficiency of
resources
 Planning is an antecedent process
 Planning necessitates faithfulness to
objectives
TYPES OF PLANNING:
 1. Financial planning

 2. Industrial relations planning

 3. Research and development planning

 4. Physical facilities planning

 HIRARCHY OF PLANS:
 Purposes or Missions: Every kind of organization
should have a purpose of establishment or mission,
Mainly social purpose of producing and distribution of
economic goods and services
 Objectives or goals: are the ends towards which the
activity is aimed at
 Objectives are the statements developed by the top
management, board of directors, and chief executives
to define what they believe to be the organizations
mission.
 They are the targets towards which goals are aimed
Types of Management objectives:

Primary objectives: These are objectives for which a company

has been started.
 Related to the company, not to individuals

Secondary objectives: Also impersonal. Helps to achieve the

primary objectives.

Individual objectives: Individual members in an organization

try to achieve daily, weekly monthly or yearly basis

Social objectives: These are the goals of an organization

towards the society.
 Obligations required by the community, government agencies
etc..
 Intend to further social, physical and cultural improvement of
the society.
AREAS IN WHICH
OBJECTIVES ARE REQUIRED:
 Market standing
 Growth and development
 Profitability
 Employee relations and performance
 Investor relations and return
 Public responsibility and relationships
 Physical resources
 Products and innovation
 Strategies:

“The determination of the basic long-term goals

and objectives of an enterprise, and the
adoption of courses of action and the allocation
of resources necessary to carry out these goals”
(Chandler)
 It denotes a general programme of action and
an implied deployment of emphasis and
resources to attain comprehensive objectives.
 Policies:
 Policies are used to guide one’s thinking process
during the planning or decision-making stage
 Policies are not the objectives, although they
are closely tied to objectives. The policy sets
boundaries within which an agribusiness
employee can exert individual creativity

Procedure:
 A procedure is a step-by-step guide to a
specific activity or function.

Practices:
 Practices represent what is actually done in
the agribusiness, and they may conflict with
policies and procedures
Rules:
 A rule is that it reflects a managerial decision
that certain action be taken or not be taken.
 A rule requires that a specific and definite action
be taken or not taken with respect to a situation.
As a matter of fact, a procedure could be looked
up on as a sequence of rules.
Programmes:
 Programmes are a complex of goals, policies,
rules, task assignments, steps to be taken,
resources to be employed, and other elements
necessary to carry out a given course of action.
 ordinarily supported by the necessary capital
and operating budgets
Budget:
 “numberised programme”
 It is a plan of statement of expected
results expressed in numerical terms
 The financial operating budget is called
as a profit plan and may be expressed in
terms of labopur-hours, units of
products, machine-hours,etc.
 ORGANISING:
 Channelizing resources in productive
activities.

 Organization: It is the structural

framework of duties and responsibilities
required of personnel in performing various
functions with a view to achieve business
goals.

 A/L.H. Haney “Organization is the

harmonious adjustments of specialized
parts for accomplishment some common
 Organization
(concept)

Static
Dynamic
(structure/
(Process)
entity)

Objectives:
1. To help management
2. To increase production
3. Co-operation of employees
 Steps in organization:
1. The process of identification,
classification and grouping up of required
activities
2. Grouping of activities in light of
resources and situations
3. Assigning these activities to positions
4. Delegation of the authority to different
persons and
5. Horizontal and vertical co-ordination of
the authority and information
relationships to enable them to carryout
these activities very effectively and
efficiently towards achieving the
objectives
 The process of organization starts with
staffing and recruitment of persons

 Functions of organizer:

1. To determine the jobs to be done by

the staff (job description, selecting,
allocating
& training personnel)
2. Defining the line of activities of the
staff.
3. Establishment of relationship among
the staff.
4. Selecting and training of personnel in
 Forms of Organization structure:
1. Line organizational structure:
A. Pure line organization structure:

B. Departmental line organizational

structure:
2. Line and Stuff organization structure:
3. Functional organizational structure:
 4. Divisional organizational structure:
5. Matrix organizational structure:
STAFFING:
 “HUMAN RESOURCE MANAGEMENT”
 the process of filling the positions in an
organization structure through
identifying work-force requirements,
inventorying the people available,
recruitment, selection, placement,
promotion, appraisal, compensation and
training of needed people to carry out
the business activity effectively.
 Staffing function related to employment
of personnel of all type- managerial as
well as operative

 Includes a variety of activities through

which the organization tries ensure that
various positions remain filled by the
suitable personnel.

 It is performed by every manager like

other functions: planning, organizing,
directing and controlling
 Based on the need of the enterprise
operation and day to day running of the
business. On the basis of the need,
Managers should determine the number and
type of persons to be staffed in the
enterprise.
 The manager of the firm should develop a
strategic staffing plan in such a way that the
working by all in a collective way without
the feeling of overwork.
 Once the staffing plan is prepared, the duty
of the manager is to develop the job
description in a constructive way so that the
qualified people should think that they should
not leave the opportunity of working with
that enterprise.
 Staffing starts with recruitment of
personnel

 There are different ways of recruiting

the staff:
1. Advertising in news papers
2. Recruiting through persons who are
already working in the organization
3. Recruiting through friends
4. Considering the persons who knock at
the doors of organization, etc
 Factors affecting staffing:
 External factors:

1. Nature of competetion of human

resources
2. Legal factors
3. Socio cultural factors
4. External factors
 Internal factors:
1. Organizational business plan
2. Size of organization
3. Organizational image
4. Past practices
 Selection Process:
1. The performance of chosen person on the job-
best criterion
2. Application for the job- includes all data (bio
data of the applicant)
3. Interview- mental alertness, sense of values,
quickness of judging, general orientation,
communication skills, degree of
professionalism, language efficiency etc.
4. Academic record- major indicator.
5. For managerial position: academic record+
leadership quality + communication skills
6. Issiuing of referrence letter
7. Extracurricular activities
[Link] fitness
DIRECTION:
 It is an important management function
that includes motivating, ordering,
guiding, leading, executing and
supervising the organization

 The good manager would always have

good qualities of directing and building
leadership that could help his staff to
succeed in their work and derive job
satisfaction in their work. Good directors
always change their styles to bring
about the desired changes.
 The function of directing is compared to
HEART of body of management
 The direction function of management
has the following works:
1. Assigning duties and responsibilities to
personnel.
2. Establishing the results to be achieved.
3. Delegating the necessary authority
4. Creating a desire for success.
5. Supervising that the job is done
properly by workers.
 Orders:
Orders or instructions are the vehicles for
messages with proper direction from top
to bottom of an organization.
Features:
1. Clear and understandable
2. Unidirectional
3. The timing of orders
4. Feedback
5. Orders vary in form and details
depending up on the degree of
delegation practiced in the
organization- positive or negative
Motivation:
Based on the Latin word movere, “A
motive is an inner state that energises,
activates or moves (hence motivation)
and that directs behaviour towards
goal”

motiv
motivating motivation
e

Activating need
Needs in and providing need Engageme
individuals satisfaction nt in work
environment behaviour
 All the personnel in the organization
should be reoriented towards achieving
the objectives.
 Certain motivational devices are usually
followed to make the direction effective
such as rewards for better work, time
bound promotions and better working
conditions. Any way these are not the
standard devices and vary from
situation to situation.
 The organizer in firm has to motivate his
staff towards better utilization of
resources and move the things in right
direction towards accomplishment of
goals and objectives.
LEADERSHIP:
 Its achievements through direction rests
in large measure, up on the qualities of
leadership exhibited by the manager.

 Leadership is helping individuals or

groups to accomplish organizational
goals

 Successful managers must have a

leadership style and capability that
allows them to modify their
management patterns to fit the
 The changes in the management
pattern are observed as below in the
recent times:

YEASTERDAY TODAY
Strong leadership Group
leadership
Arbitrary rewards Planned
rewards
No participation Meaningful
participation
Absolute power Diluted power
Rigid organization Flexible
organization
 Successful agribusiness managers know
that the output is sum total of the outputs
of all those who work for them

 Impossible to make everybody satisfied at

a time.

 But the manager as a director will see

that most of the people should be happy
most of the time with satisfactions that
they derive from their work. The good
agribusiness manger will develop those
qualities of direction and leadership that
will help subordinates to succeed and to
derive satisfaction from their work.
CO-ORDINATION:
 “Brain” of the business organization
 Co-ordination is unifying and synchronizing
action of group of people in the firm
 In general coordination means working
together by
1. Interpreting the programmes, plans,
policies, proceeds and practices.
2. Providing for growth and development of
employees.
3. Keeping in touch with the employees.
4. Conditioning the firm for its success.
5. Providing the free flow of information.
 Work climate: With out a proper working
climate, none of the skills and principles of
management can flower and bear fruits.

 Six Principles of creating the climate:

1. Set a good example himself by the
manager
2. Conscientiously seek participation
3. Be goals-and results- oriented
4. Give credit (in public) and blame (in
private) as needed
5. Be fair, consistent and honest
6. Inspire confidence and lend
encouragement.
COMMUNICATION:
 The key to the success of any of the
management functions is the free flow of
communication
 Free flow of information means that
communications must flow not only
downward (from management to
subordinates), but upward (from
subordinates to managers) and laterally (at
the same level) to be effective
 No organizational structure can be
successful without a constant concern
about honest but tactful communication at
all levels
CONTROL:
 “Nervous system” the organization

 It measures the deviations from the

desired course of action and thereby
suggests for desired direction.

 “Controlling is the process of influencing

the performance or executing the
supervision, so that the results of
organizational efforts will reach the
expectations”
 4 essential elements of control stated by
Messie:

 A pre-determined criterion / goal /

benchmark.
 A means of measuring current activity
quantitatively, if possible.
 A means of comparing current activity
with a prefixed criterion.
 Some means or measures of correcting
current activity to achieve desired
criterion / goal
 Control is not restriction, it’s a warning
when deviation occurs.

 Through proper controlling, managers

would become aware of weak spots in
organizational, directional and co-
ordinating efforts and operations of the
business.
 Another important purpose is to
evaluate the progress being made
towards organizational goals
 Proper review time to time and
irrelevant ones to be dropped.
MARKETING
MANAGEMENT:
 Marketing has been deferent by different authors
differently

 “marketing is the performance of business activities

that direct the flow of goods and services from
producer to consumer or user”

 “marketing is getting the right goods and services to

the right people at the right place at the right time at
the right price with the right communication and
promotion”
 ‘marketing is a social process by which individuals
and groups obtain what they need and want through
creating and exchanging products and values with
others’
 This definition rests on following concepts:
1. Needs, wants and demands;
2. Products;
3. Value and satisfaction
4. Exchange
5. Markets
 Needs, wants and demands:

A human need is a state of felt deprivation of some

basic satisfaction. People require foods, clothing,
shelter, safety, belonging, esteem etc. these needs
exist in the very nature of human beings. Human
wants are desires for specific satisfiers of these
needs. Eg., cloth is a needs but Raymonds suiting
may be want. While people’s needs are few, their
wants are many. Demands are wants for specific
products that are backed up by an ability and
willingness to buy them. Wants become demands
when backed up by purchasing power
 Products: Products are defined as anything that
can be offered to some one to satisfy a need or
want.
 Value and Satisfaction: Consumers choose
among the products, a particular product that
give them maximum value and satisfaction. Value
is the consumer’s estimate of the product’s
capacity to satisfy their requirements.
 Exchange and Transactions Exchange is the
act of obtaining a desired product from someone
by offering something in return. A transaction
involves at least two thing of value, conditions
that are agreed to, a time of agreement and a
place of agreement.
 Market: A market consist of all the existing and
potential consumers sharing a particular need or
want who might be willing and able to engage in
exchange to satisfy that need or want. Thus, all
the above concepts finally brings us full circle to
 Importance of marketing:
1. Marketing process brings goods and services to
satisfy the needs and wants of the people.
2. It helps to bring new varieties and quality goods
to consumers
3. By making goods available at al places, it brings
equipment distribution.
4. Marketing converts latent demand into effective
demand
5. It gives wide employment opportunities
6. It creates time, place and possession utilities to
the products
7. Efficient marketing results in lower cost of
marketing and ultimately lower prices to
consumers
8. It is vital link between production and consumption
and primarily responsible to keep the wheel of
production and consumption constantly moving
.MARKETING MANAGEMENT:
Marketing management is defined as “the
analysis, planning, implementation and
control of programmes designed to create
build and purpose of achieving
organizational objectives”.
Marketing manages have to carry marketing
research, marketing planning, marketing
implementation and marketing control.
Within marketing planning, marketer must
make decisions on target markets, market
pos tphoning product development, pricing
channels of distribution, physical
distribution, communication and promotion.
Thus, the marketing managers must acquire
several skills to be effective in market place.
 There are five distinct concepts under
which business organization can conduct
their marketing activity:
 Production Concept- firm is the central
point

 Product Concept- marketing myopia (Prof.

Levitt)

 Selling Concept

 Marketing Concept

 Societal Marketing Concept

 MARKET SEGMENTATION:

 All firms must formulate a strategy for

approaching their markets. On the one hand, the

firm may choose to provide one product to all of

its customer; on the other hand, it may determine

that the market is so heterogeneous that it has

no choice but to divide or segment potential

users into submarkets. Segmentation is the key

to the marketing strategy of many companies.

 Segmentation is a demand-oriented
approach that involves modifying the firm’s
product and/or marketing strategies to fit the
needs of individual market segments rather
than those of the aggregate market.
According to William Stanton, “Market
segmentation is the process of dividing the
total heterogeneous market for a product
into several sub-markets or segments each
of which tend to be homogeneous in all
significant aspects.
 Market segmentation is basically a strategy of
‘divide and rule’. The strategy involves the
development of two or more different
marketing programmes for a given product or
service, with each marketing programme
aiming at each segment. A strategy of market
segmentation requires that the marketer first
clearly define the number and nature of the
customer groupings to which he intends to offer
his product or service. This is a necessary
condition for optimizing efficiency of marketing
effort
 RATIONALE FOR MARKET
SEGMENTATION:

1. Because some markets are

heterogeneous:

2. Because market segments respond

differently to different promotional
appeals

3. Because market segmentation

consider with the marketing concept
 Heterogeneous Markets: Market is
heterogeneous both in the supply and
demand side. On supply side, many factors
like differences in production equipments,
processing techniques, nature of resources
or inputs available to different
manufactures, unequal capacity among the
competitors in terms of design and
improvement and deliberate efforts to
remain different from other account for the
heterogeneity.
 Similarly, the demand side, which
constitute consumers – is also different
due to differences in physical and
psychological traits of consumer. Modern
business managers realize that under
normal circumstances they cannot attract
all of the firm’s potential customers to one
product, because different buyers simply
have different needs and wants. To
accommodate this heterogeneity, the
 Varied Promotional Appeals:

A strategy of market segmentation does

not necessarily mean that the firm must
produce different products for each
market segment. If certain promotional
appeals are likely to affect each market
segment differently, the firm may decide
to build flexibility into its promotional
strategy rather than to expand its product
line.
 For example, many political candidates have
tried to sell themselves to the electorate by
emphasizing one message to labour, another
to business, and a third to farmers. As
another example, the Sheraton Hotel serves
different district market segments, such as
conventioneers, business people and
tourists. Each segments has different reasons
for using the hotel. Consequently, Sheraton
uses different media and different messages
to communicate with the various segments.
 Consistency with the Marketing
Concept:

A third reason for using market segmentation is

that it is consistent with the marketing
concept. Market segmentation recognizes the
existence of distinct market groups, each with
a distinct set of needs. Through segmentation,
the firm directs its product and promotional
efforts at those markets that will benefit most
from or that will get the greatest enjoyment
from its merchandise.
 This is the heart of the marketing concept.
Over the years, market segmentation has
become an increasingly popular strategic
technique as more and more firms have
adopted the marketing concept. Other
historical forces being the rise of markets
egmentation include new economies of
scale, increased education and affluence,
greater competition, and the advent of
new segmentation technology
 Bases of Market Segmentation:

 There are a number of bases on which a

firm may segment its market :

1. Geographic basis

a. Nations

b. States

c. Regions
2. Demographic basis

a. Age

b. Gender

c. Income

d. Social Class

e. Material Status

f. Family Size

g. Education

h. Occupation
 3. Psychographic basis a. Life style b.
Personalities c. Loyalty status d.
Benefits sought e. Usage rate (volume
segmentation) f. Buyer readiness stages
(unaware, aware, informed, interested,
desired, intend to buy) g. Attitude stage
(Enthusiastic, positive, indifferent,
negative, hostile)
 METHODS OF SEGMENTATION:
 Geographical Segmentation :When the
market is divided into different
geographical unit as region, continent,
country, state, district, cities, urban and
rural areas, it is called as geographical
segmentation. Even on the geographic
needs and preference products could be
made. Even through Tata Tea is sold on
a national level, it is flavoured
accordingly in different regions
 Demographic Segmentation
Demographics is the most commonly
used basis for market segmentation.
Demographic variables are relatively
easy to understand and measure, and
they have proven to be excellent
segmentation criteria for many markets.
 Information in several demographic

categories is particularly useful to

marketers. Demographic segmentation

refers to dividing the market into groups

on the basis of age, gender, family size

cycle, income, education, occupation,

religion, race, cast and nationality

 Benefit segmentation: The assumption
underlying the benefit segmentation is
that markets can be defined on the basis
of the benefits that people seek from the
product. Although research indicates that
most people would like to receive as
many benefits as possible from a
product, it has also been shown that the
relative importance that people attach to
particular benefits varies substantially.
 These differences can then besued to
segment markets. Once the key benefits
for a particular product/ market situation
are determined, the analyst must
compare each benefit segment with the
rest of the market to determine whether
that segment has unique and
identifiable demographic characteristics,
consumption patterns, or media habits.
 Life-Style Segmentation :Life-style
segmentation is a relatively new technique
that involves looking at the customer as a
“whole” person rather than as a set of
isolated parts. It attempts to classify people
into segments on the basis of a broad set of
criteria”. The most widely used life-style
dimensions in market segmentation are an
individual’s activities, interests, opinions,
and demographic characteristics
 Individuals are analyzed in terms of (i)
how they spend their time, (ii) what
areas of interest they see as most
important, (iii) their opinions on
themselves and of the environment
around them, and (iv)basic
demographics such as income, social
class and education
 MARKETING MIX:

Marketing mix is one of the major concepts in

modern [Link] is the combination of
various elements which constitutes the
company’s marketing system. It is set of
controllable marketing variables that the firm
blends to produce the response it wants in
the target market. Though there are many
basic marketing variables, it is McCarthy,
who popularized a four-factor classification
called the four Ps: Product, Price, Place and
Promotion
 The first P – Product consists of (i) Product
planning and development; (ii) Product
mix policies and strategies; and (iii)
Branding and packaging strategies.
 The second P – Price consists of (i) Pricing
policies and objectives; and (ii) Methods
of setting prices
 The third P – Place consists of (i) Different
types of marketing channels; (ii) Retailing
and wholesaling institutions; and (iii)
Management of physical distribution
systems.
 The fourth P – Promotion consists of (i)
Advertising; (ii) Sales promotion; and (iii)
Personal selling