Intro to Agribusiness

Income Elasticity: Luxury & Normal Necessity & Normal Inferior

Income > 0 0 < Income < 1 Income < 0

If the price elasticity of demand is 1.6 for chicken, cutting the price of chicken will:

increase revenue

Higher price elasticity of demand means that a consumer's demand is:

more responsive to price changes

Cross-Price Elasticity: Substitutes Complements Independent

Positive Negative Zero

What are the 4 Ps of Marketing?

Product, price, place, promotion

What barrier does the transportation function overcome?

Space Separation

What barrier does the processing function overcome?

Value Separation

What are the 9 marketing functions?

1. Buying 2. Selling 3. Storage 4. Transportation 5. Processing 6. Grades and Standards 7. Financing 8. Risk-Taking 9. Market Information

What are the 5 barriers?

1. Ownership Separation 2. Time Separation 3. Space Separation 4. Value Separation 5. Information Separation

The 4 functions of Management are:

1. Planning 2. Organizing 3. Controlling 4. Directing

Agribusinesses create around _______ new food products each month

1000

The average American consumer spends about _______ percent of their disposable income on food.

11

United States farmers produce _______ percent of world agricultural output

12

A single farm worker produces, on average, enough food for _______ people.

150

Farmers receive approximately ________ percent of each dollar spent on food.

16

Since 1950, the distribution of farm numbers and annual sales has shifted to where __________ percent of US farms produce approximately _______ percent of the total US output.

2 and 50

What barrier does the grades and standards function overcome?

Information Separation

What barrier does the information function overcome?

Information Separation

The unifying theme that ties everything a manager does together is the desire to maximize the _______ _______ of the firm by profitably __________ customer's needs.

Long-term profits, satisfying

What barrier does the buying function overcome?

Ownership Separation

What barrier does the selling function overcome?

Ownership Separation

In order to increase consumer satisfaction the marketing system must find ways to overcome five barriers to consumer satisfaction. The 5 barriers to consumer satisfaction are:

Ownership, Time, Space, Value, Information

Own-Price Elasticities: Elastic Unitary Elastic Inelastic

PED>1 PED=0 PED<1

(True/False) All members of the food system must be concerned with satisfying consumer needs in order to earn a profit.

True

(True/False) Business management is a profession that applies knowledge from a diverse set of academic disciplines such as economics, statistics, psychology, and matematics

True

(True/False) Consumers purchase the satisfaction that products give them, not goods and services

True

(True/False) Economics gives people the ability to make good decisions when faced with choices about where to spend their time, money, and energy.

True

(True/False) Good decision making requires clear and logical thinking. Managers must understand the problem, objectively weigh alternatives, effectively implement the best solution.

True

(True/False) Planning starts with a business plan. The marketing plan begins with the purpose (what the firm intends to do) and the objective (how to accomplish the purpose).

True

(True/False) The marketing approach is based on the idea that a successful firm first finds out what consumers want and then develops a product that meets those needs

True

(True/False) When done efficiently and fairly, marketing improves the overall efficiency of the economy, increases producer profits, and increases consumer satisfaction.

True

What are the 4 types of utility (satisfaction) consumers receive?

Form, Place, Time, Possession

Factors that cause a movement along the demand for a product include:

Change in own product's price

As the agri-food system has evolved and become more efficient since 1950, who are the biggest benefactors of increase in scope and size of the system?

Consumers

When performing the ________ Function of Management, marketing managers need information on sales, prices, market shares, profit levels, and so on to evaluate their decisions in these areas and to determine whether they need to be changed.

Controlling

Add a constant margin to the basic cost of the individual product or service

Cost Pricing

Increased herd size leads to greater demand for feed soybean meal, which leads to a greater demand for fertilizer to grow the soybeans, which leads to a greater demand for natural resource extraction to produce fertilizer. This effect is referred to as:

Derived demand

This management function is often the most time consuming function using up some 90% of a manager's time

Directing

The 3 Es of Long-Run Business Success are:

Efficiency, Effectiveness, and Economic Well-Being

(True/False) Being an effective manager is all about doing things well and at the lowest cost

False

(True/False) Corporate farms dominate the US farming landscape with 99% of all farms and acreage in the US being owned by corporations.

False

(True/False) Marketing encompasses only the business activities that address the time and space barriers by coordinating the flow of goods and services from producers to consumers.

False

(True/False) Raw commodities flow from farms and ranches directly to food manufacturers in the Agri-Food System.

False

(True/False) Sales is the focus of the modern marketing system

False

(True/False) The foundation for a firm's product offering is the expected product which delivers the bare minimum set of features that the customer experts

False

Often the most difficult step in decision making process

Problem Identification

Establish prices that are emotionally satisfying

Psychological Pricing

The act of _______ a consumer need is what gives a business its _________ to earn a profit

Satisfying right

American consumers have started consuming more vegetable soybeans. This change in consumer tastes and preferences would be represented by a _________ of the demand curve to __________.

Shift, right

Product offered at a high price to make high profits from initial sales

Skimming the Market

Consumers do not buy products. What is it that they actually buy?

The satisfaction the product gives them

What barrier does the risk-taking function overcome?

Time Separation

What barrier does the storage function overcome?

Time Separation

What barrier does the financing function overcome?

Time, Space and Value Separation

Prices set at a level just below estimated perceived value of the product

Value-Based Pricing

Agribusiness management is all about the ________ and integration of technology in ways that ________ people's well-being.

adoption, improves

If the income elasticity for beef filet is 2.0 this indicates that:

all of the above Sales response of beef filet to a raise in income is greater than the rise in income Beef filet is a normal good Beef filet is a luxury good

As an individual consumes additional units of a good, the utility obtained from each additional item ___________.

diminishes