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Marketing Essay代写:Farm Produce To Restaurants And Retail Stores

Marketing Essay代写 :批发能够提取货物的零售价格,60%是因为他们强大的供应商的农产品到餐馆和零售商店。有几个因素,使批发商强大的这个设置。首先,他们是在该领域的唯一的玩家能够从中规模和大规模的农民聚集的农产品。我们告诉他们可以管理的规模和产品的订单范围(Jang和刘2009)。这种管理采购农产品的能力,从不同的农民生产的批发商有品种的产品在一个地方,他们可以提供他们的买家的不同需求,如餐馆和零售商店。根据Jang和刘(2009):

…第一个主要的挑战是找到当地的厨师帕森斯来源,能提供足够的材料以满足餐厅的需求(16)。

此外,我们还被告知,批发商可以提供更长的付款条款,购房者更可能采取反对缩短付款期限由小规模农户的青睐。

在相同的光,我们可以认为,农民是弱势供应商,从而获得一小部分的零售价格,因为首先,他们担心使用信息技术(信息技术)利用互联网来支持商业交易,如管理客户和库存数据。其次,农民缺乏一个直接的渠道,通过这些渠道,他们可以直接与买家沟通。第三,农民没有解决上升的利息和工资的要求,并与廉价的粮食进口竞争。

Wholesales are able to extract 60% of the retail price of the goods because they are powerful as suppliers of farm produce to restaurants and retail stores. There are several factors that make wholesalers powerful in this setup. Firstly, they are the only players in the field who were able to aggregate farm produce from both mid-scale and large scale farmers. We are told they could manage scale and scope of product orders (Jang & Liu 2009). This ability to manage sourcing farm produce from different farmers made wholesalers to have variety of products at one place such that they could supply the varied needs of their buyers e.g. restaurants and retail stores. According to Jang and Liu (2009):

…one of the first main challenges for Chef Parsons was finding local sources that could supply enough ingredients to meet the demands of the restaurant (16).

Furthermore we are also told that wholesalers could provide lengthier terms for payment which buyers are more likely to take against the shorter payment periods favored by small scale farmers.

In the same light we can view farmers as being weak suppliers thus earning a small fraction of the retail price because firstly they feared using information technology (IT) to leverage using the internet to support business transactions such as managing customer and inventory data. Secondly, farmers lacked a direct channel through which they could communicate directly to buyers. Thirdly, farmers had no solution to the rising interest and wage demands, and were competing against cheap food imports.

When we analyze the scenario with respect to threat of substitutes we again see the farmer being more disadvantaged. Even though local produce was considered superior, imports had made food prices to be overall low in Canada thus constraining the ability of farmers to raise their prices. In short the increased demand for low-cost food had made demand to be more elastic such that customers had more alternatives. Wholesalers on the other hand were not affected by this because they had gained the trust of retailers from years of relationship-building plus they had the supply chains necessary to serve the scale and scope demanded (Jang & Liu 2009).

The emergence of disruptive technology in the form of hydroponics, vertical farming and genetic engineering techniques have developed new ways to decrease food production costs and minimize the need for farmland in cultivating crops. This coupled with the technology applied at the distribution level have lowered the barrier to entry into farming and in effect lessened the ability of farmers to demand high prices for their produce. Also we notice that farming involves common technology and little brand franchise which increase the ease to enter (QuickMBA n.d.). On the other hand, wholesalers have been strengthened by the technology available at the distribution level to lower their costs and increase their bargaining power. We are also informed that years of relationship-building were required for trust to be built between the restaurant chains with their suppliers which is a factor that can be considered as a barrier to entry into the wholesale business.

From the context of rivalry, we can see that farming is faced with intense rivalry that is manifested through: high fixed costs (increasing interest and wage demands), highly perishable products (producer needs to sell goods as soon as possible), low level of product differentiation, high exit barriers and a diversity of rivals (small-scale, mid-scale and large scale farmers) (Pearce & Robinson 2007). The wholesalers are able to benefit from this intense rivalry in farming to increase their margins on the retail price at the expense of farmers.

Seeing that the rivalry is intense for the farmers, the high perishability of their produce and lack of direct access to the end consumer, wholesalers are powerful buyers. They have bargaining power, huge buyer volume and substitutes in the form of imports and genetically engineered foods. Wholesalers are therefore able to obtain goods from farmers at the least possible cost. On the contrary, the lack of alternative direct links to the local farmers and the need for diversity makes mid- and large-scale restaurant chains to rely heavily on wholesalers to meet their product needs. Thus wholesalers are able to price their products as highly as possible, which increases their percentage of the margins.

Question b

With the farmers skeptical of the potential of IT and the internet to increase their margins the wholesalers have continued to grow in strength and therefore steadily increase their profits relative to the farmers.

According to Varian (2003):

… [Internet and] IT allows for fine-grained observation and analysis of consumer behavior. This allows for various kinds of marketing strategies that were previously extremely difficult to carry out, at least on a large scale. For example, a seller can offer prices and goods that are differentiated by individual behavior and/or characteristics (5).

This in effect means that the internet increases supplier power for wholesalers because they are able to mass customize their products to the different mid- and large-scale retail chains they are supplying to.

Furthermore internet has reduced fixed costs and thus the minimum efficient scale of operation in many markets e.g. in Jang & Liu (2009) we are told that sophisticated online ordering systems had created more efficient communication throughout the supply chain, allowing for systematic and timely distribution. This reduces inventory cost among others that the wholesalers have to incur thus increasing their margins.

We cannot forget also that the internet has improved supplier-customer intimacy through improved efficiency in communication. This intimacy could be substantial enough to increase switching costs and cause customer lock-in especially for the case of large-scale restaurant chains that must maintain consistency and quality. Varian (2003) says two distinct economic effects get involved here: reduced dispersion of willingness to pay, which is a form of price discrimination, and increased barriers to entry. Increased barriers to entry consequently lead to having fewer powerful wholesalers with better margins.

The internet also favors globalization, here implying growth of a few strong global players with superior supply chains that enable sourcing of products from any part of the world and similarly distribution to anywhere in the globe. Rivalry will thus be decreased since only the strong will be able to survive. Wholesalers are the more likely to adopt this strategy than farmers which is why we expect their margins to continue to grow in comparison to that for farmers.

Question c

Firstly, the wholesaler provides the end customer with a wider choice / variety of farm produce that the farmers cannot do. Wholesales can provide the end customers with the whole range of products from organic, to genetically-engineered, to local, to imported. Secondly, wholesalers can furnish the end customer with information regarding the farming methods used, the origin and carbon footprint of the products. Wholesalers are therefore able to influence consumer opinion on certain products. Thirdly, through use of efficient technology and effective distribution network wholesalers are able to lower overall food prices through providing cheap imports as substitutes to local produce. Also, wholesalers are able to ensure that end consumers have access to seasonal agricultural products because of their wide sourcing network. Finally, through packaging and branding wholesalers can make it easier for end consumers to identify with certain products.

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