Food Marketing System Research Articles

Marketing Strategies in Changed Circumstances: Observation from Farmers in Novosibirsk Oblast', Russia

Recent changes in the food distribution and marketing systems in Russia are described. Findings from a survey of the marketing strategies used by directors of joint-stock companies (JSC) and private farmers in Novosibirsk oblast' to cope with these changes are presented and compared. These farmers have adopted different strategies. JSC directors withdrew from value-adding enterprises (VAE) complaining of poorly regulated markets — which remove incentives to create product distinctiveness — problems with bad debts, unstable markets and low profitability. As a result many JSCs have reverted to their core production activities, strategies that suggest they are prioritising longevity rather than profit maximisation. However, the larger private farmers, later entrants into farming and food production, had no apparent complaints in any of these areas. Unlike the JSC directors, they did not welcome more government intervention but wanted a stable macroeconomic climate within which to conduct business. To re-couple JSC directors with VAE and markets, the Russian authorities need to tighten regulation over competition, branding and food quality, and provide better access to market information. These changes will let the federal food corporations reduce their role as farmers, able to extract full benefit from investments made to create distinction, will develop their products and vertically integrate along the food chain.

As principais evoluções dos comportamentos alimentares: o caso da França

Durante a segunda metade do século XX, o desenvolvimento econômico e as evoluções dos modos de vida ocasionaram modificações importantes nos comportamentos alimentares. Tais evoluções foram particularmente analisadas para o caso da França. Confrontadas a um contexto de abundância, as populações adotaram uma conduta alimentar mais energética. Tal conduta resume-se, sobretudo, em um alto consumo de produtos de origem animal. Porém, entre grupos de indivíduos ricos e após um período de saturação, a atração pelo consumo desmedido tal produto, tornou-se menos intensiva. Novas preocupações orientadas à saúde e às formas de mantê-la em bom estado foram despertadas. O aumento do número de mulheres salariadas e o desenvolvimento das atividades de lazer alteraram a gestão do tempo empregado à alimentação. Na busca pelo ganho de tempo, os consumidores passaram a procurar por alimentos prontos para serem consumidos e a realizarem suas refeições fora do domicílio. As culturas alimentares não evoluem tão rapidamente como as transformações ocorridas em todo o sistema de oferta alimentar, com isso afirma-se que a industrialização, a internacionalização e as inovações de toda a cadeia agroalimentar geram ansiedades no consumidor. Todas essas transformações e tendências, que são observadas em países ricos, podem ser percebidas quando os comportamentos alimentares de populações ricas de países em desenvolvimento são analisados.

The ‘New Economy’ and efficiency in food market system: A complement or a battleground between economic classes?

Rapid developments in E-commerce can bring efficiency in the food market system by cutting transaction costs. However, it can also bring a battleground between developed and developing countries and also within developed countries because the New Economy emphasizes knowledge-based labor practices and low-skilled workers of trading nations compete for a shrinking need for their services. An Input–Output model is used to examine the effects on high-skilled and low-skilled worker demand, particularly in food and agriculture. The food and agricultural industries are significant employers of low-skilled labor. Food and agricultural trade has reduced low-skilled labor demand in the United States.

The Marketing Structure in Agribusiness During the Transition in Bulgaria

Bulgaria is moving toward a food processing and marketing system which resembles that of Western Europe and the U.S. Large grocery chains from Germany, Austrai and Turkey are building supermarkets and hypermarkets in Bulgaria's larger cities. However, income in Bulgaria remains much lower than in Western Europe and most Bulgarian consumers cannot afford to shop in the new stores yet. Neighborhood markets, which serve average Bulgarians, are expanding their product selections and remain the primary shopping venue. Food processing plants in Bulgaria are being upgraded to meet EU standards. Farmers are getting more efficient as land is consolidated. On the whole, the agriculture and agribusiness sectors in Bulgaria are improving.

Food Security in Indonesia: Current Challenges and the Long-Run Outlook

In the long run-- over the past four decades--improvements in food security in Indonesia have generally been driven by pro-poor economic growth and a successful Green Revolution, led by high-yielding rice varieties, massive investments in rural infrastructure, including irrigation, and ready availability of fertilizer. In the short run, food security in the country has been intimately connected to rice prices. After more than two decades of stabilizing domestic rice prices around the long-run trend of prices in the world market, Indonesia emerged from the devastating financial crisis in 1998 with domestic rice prices much higher than world prices and much higher than long-run trends of real prices in rupiahs. Although the current political rhetoric pushing for even higher prices uses food security as the rationale (i.e., they will cause greater self-sufficiency in rice), in fact few productivity gains are now available to rice farmers, so their gains will be consumers’ loses. High rice prices have a major impact on the number of individuals living below the poverty line and on the quality of their diet. The paper reviews research on the impact of rice prices on the poor, on real wages in rural and urban areas, and on the broader macroeconomic consequences for investments in labor-intensive manufacturing. Discussion then focuses on how political and economic circumstances have changed since price stabilization, implemented by the national food agency (Bulog), balanced the needs of producers and consumers as Indonesia’s approach to food security. The most important current challenge for the country’s future food security is re-starting rapid, pro-poor growth. An additional challenge on the horizon is the “supermarket revolution,” which is rapidly changing the basic structure of Indonesia’s food marketing system. Within a decade well over half of Indonesia’s rice is likely to be sold in supermarkets, thus transferring to the private sector a supply-management role that had historically been a public sector activity.

Modelling vegetable marketing systems in South East Asia: phenomenological insights from Vietnam

This article presents a conceptual framework for the analysis of vegetable supply chains in a South East Asian context and the role wholesale markets play in these chains. Following a review of the literature on food marketing systems in developing countries and preliminary fieldwork in South East Asia, a holistic framework is proposed, including what are perceived to be the critical factors in the development of improved fresh food marketing systems: domestic legal and policy factors, international trade policies and food markets, history, geography, and cultural and social norms. The particular role of trust and collaboration among stakeholders in the Ho Chi Minh City vegetable marketing system is highlighted.

The Political Economy of Differentiating Markets: Facing Reality inside the U.S. Department of Agriculture

vant due to long-standing trends in agricultural and food production and marketing. Economic trends within the food system mirror changes taking place throughout the economy-growing consolidation at all levels, increasing use of supply chains in lieu of arms-length spot market transactions, and ever-increasing product offerings tailored to specific market niches. If the food system is no longer characterized by atomistic competitors producing and marketing relatively few basic commodities with limited variation in product attributes, what economic role is served by USDA involvement in commodity standards and grading? Commodity standards serve multiple and often overlapping functions. Product identity standards serve to protect market participants from fraudulent or deceptive practices as products move through the production and marketing chain. Grade standards serve to facilitate by categorizing commodities according to economically important attributes. It is also possible that under certain circumstances standards may play a less benevolent role if they are used as a tool to extract economic rents for particular segments of the industry. In this paper, we focus on commodity standards and grading services primarily as mechanisms that facilitate the operation of the agricultural and food production and marketing system.1 In this vein, Giovannucci and Reardon identify two important developments relating to the role of grades and standards in an increasingly globalized agricultural and food economy. First, there is a shift from commodity-oriented mass markets toward ma kets characterized by highly differentiated products and niches. As a result, grades and standards are shifting from a traditional role of reducing transaction costs in broad commodity toward an emerging role as strategic tools for product differentiation and m rket segmentation. Second, there is a shift in the role of grades and standards from emphasis on outcomes (i.e., measurable product attributes) toward processes (e.g., how the product is produced, processed, handled, etc.). Changes in the role of the USDA in the arena of grades and standards mirror the worldwide developments noted by Giovannucci and Reardon. Our premise is that USDA involvement in commodity standards and grading continues to provide benefits in traditionally important ways, but that the functions performed by the USDA are changing and thus maintaining relevance, as the agricultural and food system itself evolves.

Co-evolutionary Processes in Supply Chain Networks

This paper presents an innovative conceptual and analytical framework to enhance understanding of the dynamic processes of food supply chains. The framework employs a co-evolutionary perspective to exploit complex and dynamic relationships spanning different levels of aggregation. To make this co-evolutionary perspective operational, the paper's conceptual approach draws from complexity theory, Austrian economics, and social networks. This approach not only improves our understanding of the conflicting dynamic influences that impact food market systems but also presents an alternative viewpoint of organizational interrelationships. In addition, this framework provides analytical advances through the use of agent-based modelling in an agricultural supply chain context. Simulation results are presented to support the arguments of this nested co-evolutionary framework.

Contract Design: A Note on Cash Settled Futures

This note presents an intuitive interpretation and expression for pricing cash settled futures contracts. In particular, the choice of the averaging period for the underlying cash index is evaluated. A question arises as to how the choice of the averaging period may effect how the futures contract is priced. In this note, it is shown that under certain assumptions, the behavior of the futures price prior to entering the expiration interval is independent of the averaging interval’s length for storable commodities. However, this is not the case for nonstorable commodities. An examination of the Minneapolis Grain Exchange’s National Corn Index futures provides empirical support for the results. Given the increasing interest in cash settled futures, especially for futures contracts on agricultural commodities, these results should prove useful to futures exchanges when considering contract design. Ultimately, contract design choices are a critical factor in the success of any futures contract. In the context of agricultural futures contracts, successful contracts can contribute to increased social welfare and greater efficiency of the food marketing system.

Impact of Supermarkets and Fast–Food Chains on Horticulture Supply Chains in Argentina

In the 1990s, the supermarket and fast–food sectors grew rapidly in Argentina. Both were dominated by multinational firms, and their growth drove profound change in food market systems and farming. This article analyses the impact of this development on fruit and vegetables supply chains, in particular the way the advent of McDonald’s affected the supply chain for frozen French fried potatoes. It shows that there is a tendency for such changes to favour medium and large producers, with evidence of the exclusion of small farmers.

The Precautionary Principle and Other Non-Tariff Barriers to Free and Fair International Food Trade

International food trade and world population are growing rapidly. National legislation has been enacted and implemented in many countries to assure good quality and safe foods to meet increased demand. No country is fully self-sufficient in domestic food production to meet population demands, and all require some food imports. Current international food trade agreements call for free and fair food trade between all countries, developed and developing. National food legislation and food production, processing and marketing systems have evolved in most countries to ensure better quality and safer foods. At the international level the work of the FAO/ WHO Codex Alimentarius Commission (Codex) and the World Trade Organization Agreements on Sanitary and Phytosanitary Measures (SPS) and on Technical Barriers to Trade (TBT) and related Uruguay Round agreements have been agreed to by over 140 countries with the aim to promoting the free and fair trade of good quality and safe foods between all countries. The SPS and TBT agreements rely on science-based Codex standards, guidelines, and recommendations as benchmarks for judging international food trade disputes. A number of non-tariff barriers to trade, often related to agricultural subsidies and other food trade payments in developed countries, continue to give rise to complaints to WTO. They also continue to prevent free and fair trade, particularly for developing countries in international food trade. A number of these non-tariff barriers to trade are briefly examined, along with other domestic and international food trade problems, and recommendations for improvements are made.

Applying marketing channel theory to food marketing in developing countries: Vertical disintegration model for horticultural marketing channels in kenya

AbstractThis article shows that marketing channel theory, which has been extensively applied in developed countries, can also be of great value to the developing world. Notably, the channel approach makes it possible to explain the number of trade levels observed in food marketing systems. We propose here a vertical disintegration model for horticultural marketing channels in Kenya. It contains one dependent variable (the degree of vertical disintegration of a channel) and five independent variables (the population size of the market center served by the channel, the population density of the rural hinterland of that market center, the transport time from farm to market center, the turnover of the retailer involved, and the keeping quality of the commodity traded). Binomial and multinomial logit analyses show that the probability of encountering a more disintegrated horticultural marketing channel increases when the market center has more inhabitants, when the center's rural hinterland is more densely populated, and when the transport to the center takes more time. The probability of encountering a less disintegrated channel increases when the retailer in the channel has a larger turnover and when the traded commodity is a leafy vegetable. [EconLit classification: L190 market structure) © 2001 John Wiley & Sons, Inc.

Cross‐National and Cross‐Cultural Issues in Food Marketing

With the collapse of the Soviet Union, the formation of the European Union, and current economic crises and cost considerations in various countries around the world, interest has been developing in cross‐national and cross‐cultural marketing opportunities in the sector of food. Today in the United States the food industry is of paramount importance, a trend that is evident in other nations. Opportunity exists for commercial growth on an international level by companies large and small. An understanding of the food marketing systems of different nations and cultures is necessary for growth and development by these companies. Different organizations and scholars have been studying various aspects of the field of cross‐national and cross‐cultural food marketing on a micro level. Analyzing these different studies evidences a need to conduct further study and to develop more theory—specifically on cross‐national and cross‐cultural food marketing at a macro level.

Cross-National and Cross-Cultural Issues in Food Marketing

Summary The present economic crisis and cost efficiency considerations in countries around the world at varying levels of economic development makes marketing and distribution related decisions and policies both at micro (individual company level) and at macro (sector or country level) of paramount importance. In studying the food marketing systems around the world, one has to take environmental differences in these countries into consideration. That is the reason why marketing institutions and processes are structured to respond to the most important environmental dimensions of the countries. The purpose of this article is to evaluate the current state and likely developments of food marketing and distribution systems. As well, constructs and conceptual frameworks were also developed for the study of food marketing and distribution practices. An attempt is made to use a typology of economic systems for less-developed countries to illustrate how current food marketing and distribution systems are affected by the current economic systems of the countries at a different level of development.

The Agricultural Marketscape: A Framework for Sustaining Agriculture and Communities in the Northeast

ABSTRACT This paper examines ways in which rural landscapes and communities in the Northeast have been, and continue to be, impacted by global and local food marketing systems. We provide a historical overview of globalization in agriculture and the food system and the relationship of these changes to other economic, technological and social changes. We present two food system models–“global” and “local”–representing contrasting socioeconomic paradigms, or understandings of the true and proper relationship between economy and society. Finally we explore some of the theoretical and real-life impacts of global and local food systems on landscapes in the Northeast, and discuss implications for achieving long-term agricultural sustainability.

Testing the Competitiveness of a Multistage Food Marketing System: The Canadian Chicken Industry

This paper develops a model for testing competitive behavior in multistage food marketing systems and applies this model to the Canadian chicken industry for the period 1965–66 to 1995–96. The empirical results suggest that the departure from competition in the chicken retailing and processing sectors is statistically significant over the entire time period and for the period in which supply management has operated. However, the rejection of perfect competitive does not enable us to identify in which sector the market power lies. The results of this paper provide support for the view that higher retail prices in Canada are not entirely due to the restriction of supply at the farm level by marketing boards. The presence of market power at either (or both) the processing or retailing level is also likely to result in higher retail prices.Un modèle pour tester le comportement concurrentiel dans les systèmes de commercialisation multipaliers des aliments est appliqué au secteur canadien du poulet sur la période 1965–1966 à 1995–1996. Les résultats empiriques révélent l'existence d'un écart significatif par rapport à l'état de concurrence parfaite dans les secteurs de la vente au détail et de la transformation du poulet sur toute la période d'examen, ainsi que pour celle au cours de laquelle le régime de gestion de I'offre a été en vigueur. Cet écart ne permet toutefois pas de mettre le doigt sur le secteur qui a un pouvoir sur le marché. Notre observation conforte l'opinion voulant que les prix au détail plus élevés enregistrés au Canada ne sont pas entiérement dus à la restriction par les offices de commercialisation de I'offre au niveau de la production. Ils peuvent également être le resultat de l'existence d'influences sur le marché au niveau de la transformation, de la vente au détail ou des deux à la fois.

Overview: Rationale and Elements of a Successful Food-Fortification Programme

Over 2,000 million people, or more than one of three individuals throughout the world, are at risk for iron, vitamin A, or iodine deficiency. The three main approaches to addressing micronutrient deficiencies are fortification, supplementation, and dietary diversification. Although fortification of staple foods has played a significant role in the nutritional well-being and health of the more industrialized nations, it has not been considered an option for less developed countries because of the lack of centrally processed foods and poorly developed food-marketing systems. As food markets expand, however, fortification options are becoming increasingly available. This paper identifies past and present successes and failures, as well as the facilitating factors and constraints that need to be addressed. Based on recent experience and the lessons learned, successful programmes require at least the following: political will and support and the willingness to legislate or regulate; private-sector involvement; public-sector support; willingness of both sectors to enforce quality assurance programmes; good data on consumption patterns; social acceptability of fortified food, implying no change in organoleptic properties; and minimal change in cost.

The informal food marketing system in urban environments: Case studies of Kagiso and Orange Farm

The rapid development of urban townships and the failure of the formal sector to meet the township demand have led to the emergence of informally organised marketing systems, which have certain advantages over their formal counterparts. This note presents the findings of a study on the informal marketing of vegetables and fruit in two townships of Gauteng Province, namely Kagiso and Orange Farm. The data collection procedures are discussed first and then the results are presented with regard to the kinds of vegetables and fruit sold, their pricing, supply and transport, and the constraints faced by informal traders.

Vertical restraints and competition policy in the US and UK food marketing systems

A review of the vertical restraints literature shows that while it is rich in analysis of such restraints, theory is ambiguous about their private and social effects, and, hence, their regulation. Analysis presented in this article suggests that this ambiguity in the literature appears to be mirrored in the decisions on vertical restraints of the US courts and the UK competition authorities with regard to their respective food systems. In addition, there is an interesting contrast between the type of vertical relationships investigated by the US and the UK authorities, the latter covering a broader range of restraints. © 1997 John Wiley & Sons, Inc.

Vertical restraints and competition policy in the US and UK food marketing systems

Vertical restraints and competition policy in the US and UK food marketing systems