EXTENSION OPPORTUNITIES IN MARKETING1 R. BRIAN HOW2

am very glad to have this opportunity to discuss extension market- I ing problems with you. What I would like to do is describe various types of programs, and then make some general observations.

Some people feel the primary function of extension is to speed up the disseminaaon of research results. To me this is a pretty narrow viewpoint. I prefer to consider extension as directed toward organizing and conducting educational programs with various groups of people off campus. Current research is usually essential to support such programs, but in many cases cannot carry them alone.

What we think of as agricultural marketing is also much broader than the area included b private businessmen or farm people. Businessmen in other fields loo l on marketing as advertising, promotion, product

that we think of

development, sales, and the like, but processing, storage, packaging or similar operations. Many think of marketing 111 terms of price determination alone. marketing today in fairly general terms, packaging, and other operations performed by some farmers.

For purposes of our discussion, I would like to classify extension marketing programs broadly according to clientele. I would like to consider separately the programs intended for farm people and those concerned with the interests of farm people, programs for the man- agement and employees of marketing firms, and programs for consumers. In considering extension programs with each of these three groups, I think we should consider the objectives of the work, the kinds of pro- grams undertaken, the most effective e of organization and adminis- tration, the personnel requirements, a%! the methods that appear most suitable.

Marketing Programs with Farmere Marketing work with farmers that falls within our field of interest

can be divided into about three or four different areas. One is providing information on the current market situation and outlook for particular crops and for farming in general, and the development of greater under- standing of economic principles related to marketing, a second the improvement in efficiency in the performance of marketing services by individual farm operators or cooperatives, and a third the provision of information of value in develo ing, guiding, or appraising farm organiza- tions or public policies relatecf) to marketing.

Changes in production and marketing technology and in market demand are currently resulting in many changes in the location of

1Papet presented to the A M 4 Meeting of the Canadian Agricultural Economia Society. Guelph 1960.

2dmd Wdvdty.

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production, in farm business organization, in marketing channels, and in merchandising methods for many products. Farmers and farm leaders are concerned with these changes and the reasons for them, but often find it diacult to distinguish between short run temporary conditions and more permanent changes. Extension people have had considerable opportunity to help develop greater understanding in this area and at the same time improve knowledge of economic principles.'

The Economics Division of the Canada Department of Agriculture has prepared outlook and situation reports for many years. These could form a valuable part of an extension marketing program, but it seems to me that agricultural extension in Canada has not accepted this responsibil- ity. Distribution of the information has been mainly through the press and radio. Interest may be low in Canada in this area for several reasons. Because of the importance of foreign trade Canadian prices of many pro- ducts are not closely related to Canadian production, but depend on many factors and the relationship is often obscure. Competition between pro- ducing areas within the country is not intense for many products. At the same time this information is needed for planning, and to improve knowledge of marketing.

It is not easy to raise the general level of economic understanding. Motives and methods may be misunderstood, and other activities appear more rewarding. While the gains from better appreciation of the way the marketing sector of the economy actually operates are difficult to measure, we all are aware of illustrations of the costs of farmers failing to recognize basic economic principles or of being ignorant of actual market conditions.

Can we expect individual farmers to plan their businesses wisely or participate intelligently in public olicy decisions without an understand- mg of economic principles relaeelto marketing and the current situation for important variables? It seems to me that educational programs in this area are essential for discussions of the pros and cons of major policy decisions, including the use of marketing boards, direct price supports, advertising and promotion schemes, and the like.

To develop a greater understanding of marketing on the part of farmers and farm leaders requires some good descripuve and analytical studies. Economists may differ in describing conditions in the market, )but the points of difference are usually minor compared to the areas of agreement. The study of beef marketing margins conducted by Profasor Wood of the University of Manitoba is an exam le of a project

keting. Extension programs in this area are undoubtedly hampered by lack of good research illustrating marketing.

Effective extension of this material requires a complete program in- volving the use of mass media and group discussion. While farm people

that represents a big step toward greater understanding o P livestock mar-

.?see. for example. The Challenge of Change in Marketing, A.E. Ext. 88. Depmbat of A,piicdtural Economics. Cornell University, Ithaca. April 1980.

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form the primary audience, people working in related fields also may find situation and outlook informauon useful in planning their research and extension activities.

County agents in New York are involved a t present in writing pro- gram plans for the next five years. As a result they are very interested in any indications they can obtain of changes in market conditions during ths period that might affect the prices for commodaes produced in their counties. As it should be, the economic situation and outlook usually becomes the standard introduction to such program plans.

Market information for many products extends beyond price pro- jection to cover consumer preferences for grade, variety, size of product, type of package, and other product characteristics. Information of this kind is especially valuable to fruit and vegetable growers, for example, in planning production and to produce wholesalers and processors in their business decisions.

Fewer farmers actually perform marketing services today, having turned this responsibility over to specialized marketing firms. But for some commodities, farmers or their organizations still undertake some marketing activities. One example is the consumer packing of com- modities such as apples, potatoes, and onions on farms. New methods and equipment are being developed to do these jobs, and there is a wide range in unit costs between farms. Extension has an opportunity to point out improved methods of performing these marketing services to those concerned.

In the opinion of many farm people primary effort in marketing programs should be directed toward raising prices or expanding sales through group action or public programs. One of the most =cult yet challenging opportunities facing agricultural extension is to provide impartial factual information in this area and encourage logical reasoning. Feelings run high, and opinions are strongly held. The best extension work is often not done on a public,platform. It is not easy to be given the role, as so often seems to be the case, of dampening down enthusiasm for a particular course of action that history, or economic analysis, or both, indicates has little hope of achieving the desired result.

In general, extension specialists work closely with county workers in developing and conducting marketing programs with farm people or their representatives. The county worker may call on the extension specialist for assistance in developing a program in this area. Specialists, however, often find it desirable to work directly with farm organization 3eaders and others on the operation of farm organizations or the administration of public programs.

Marketing Programs with Marketing Firms Agricultural extension and research rograms have been carried out

with marketing firms for many years. P irst work in this area often had

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the objective of finding information that would help farm people or guide legislation. Production technologists provided assistance to marketing firms on problems for which solutions had already been developed in working with farmers. Recent programs with marketing firms have been distinguished by a change in objectives and orientation.'

In conducting programs with marketing firms, the extension worker must accept the point of view of the marketing firm management and be prepared to assist them in solving their problems, whether i t be in in- creasing sales, in reducing costs, or maintaining quality. Sometimes it is dXcult for extension workers and administrators with farm backgrounds to accept this different viewpoint.

Agricultural extension work with marketing firms to date has been directed mainly toward helping them reduce costs and increase sales, although some work has been done in planning and market outlook. In recent years extension programs have developed rapidly in some areas. One illustration is the work with retail food stores. Ten or twelve years ago extension marketing programs with retailers consisted largely of demonstrations of how to prepare fresh fruits and vegetables for sale, or how to store them temporarily without loss of quality. From this begin- ning the em hasis shifted to programs on work simplification, labor e.f6ciency anif equipment use in meat and grocery as well as in produce departments. Recently the work has broadened to include management functions such as personnel administration and long range planning.

At present about 15 states each have at least one extension specialist working with food retailers and wholesalers, and some states have teams of two or more specialists. The rograms differ in direction and

group methods, while others are intended for chain organizations, both voluntary and corporate, and use an individual approach. An unusual feature of many of these state programs is that their success is largely due to the research findings developed by one Division of the U.S. Department of Agriculture and the extension efforts of one member of the Federal Extension Service. Success of these programs can be gauged by the (unpaid) testimonials that have been received, by the respect accorded the research worker and extension Tecialist by the food trade, and by the growing tendency to use agric turd marketing people in trade associations or in consultant roles.

Many other different ty es of programs have been developed with

of agricultural development that Professor MacFarlane of Macdonald College has done with one of the Canadian railroads as work in this area. I don't know whether he considers this research, extension, or service. I am sure it has educational aspects.

methods. Some are directed a t in B ependent store operators and use

marketing firms. I would c P assify the work of developing projections

4See illustmtiona of successful programs with marketing Grmr in Procsedinga NoHonol National Agricul& Center MarMng Conference for Ertauion Adminiatratma April 1959.

for Advanced Study. University of Wisconsin,

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The kinds of extension program developed with marketing firms in the United States are as different as the different types of agriculture in different areas. In grain growing areas extension programs have been developed with elevator operators on improving business management and labor and equipment efficiency. In dairy areas programs have and are being developed with the management of processing plants - not only cooperative but proprietary firms as well. In New York we are just lbegnning economic and business management programs with fruit and vegetable processing plants, but California, for example, has done a con- siderable amount of work in operational efficiency with this group.

Some of the work with marketing firms has involved the use of newer data rocessing and statistical methods to answer fairly complex questions. Jurdue has done interesting work in this area, providing meat packers with a method of determining optimum product mix under various market and raw material situations, and indicating desirable plant locations to processing lants. This work is reported to have saved at

work the educational feature is often the instruction in the use of a method of analysis, rather than in the understanding of particular research results.

Questions of organization, personnel and methods to be used have arisen in connection with programs with marketing firms. Much of the work with private firms is being conducted directly from the state college campus, rather than being channelled through the county worker. In some states ,regional programs covering several counties are being tested.

Special training and experience is necessary for effective economic and business management extension work with marketing firms. Few agricultural college graduates, even with advanced degrees, can step into this work and expect immediate success. Work experience in the area, or training in the pamcular subject matter to be offered are most essential. On the job training is time consuming and expensive.'

The methods of agricultural extension used with farm people can be adapted to work with marketing firms. The difference is that programs are frequently conducted for individual firms rather than for larger groups. This necessitates continual care to insure most effective use of resources, and to avoid purely service operations. Method and result demonstrations have been effective in many circumstances.

least one large meat pac i er substantial sums of money. In this type of

Marketing Programs with Consumers Agricultural economists have joined with home economists to

provide marketing information programs for consumers in many areas. This is not a food surplus disposal program, but one in which the objec- tives are to help consumers make better decisions in their food purchases.

SWendell Earle and Jean C. Evsnh The Organfzocion and OperaHon of Eztendon Marketing Proproma in Selected State. 1957. National A~riiculturP1 Extension Center for Mvmced Study, University of Wirconrin.

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With this objective, information on purchasing orange juice and coffee must be provided even in a dairy state. These programs include instruc- tion in principles of buying, as well as recommending best buys.

Individual families are still the largest market for food, but insti- tutional buyers are becoming more important and in many cases have little knowledge of food purchasing or quantity preparation. This group finds marketing information particularly useful.

Mass media are used almost exclusively for consumer programs, and this requires specialists with some experience and interest in this area. County workers usually are involved in disseminating information pre- pared centrally, but sometimes the material goes directly from the source to the intended audience.

Summary In summary I would like to make the following points: 1. There are numerous opportunities for educational programs in

agricultural marketing that would be of value to farmers, to the man- agement of marketing firms, and to consumers.

2. In Colleges and Departments of Agriculture our first responsibil- ity is still to farm people, even though they are actually performing fewer marketing services today.

3. Marketing information of most general use to farmers is that which helps them understand the economic situation and outlook, and important economic principles related to marketing.

4. Developing educational programs with marketing firms requires a change in direction from primary concern with farm problems to concern with the problems of the private marketing firm. While this may be difficult to accept, there is really no direct conflict of interest between programs for farmers and those for marketing firm personnel and the methods and kinds of information available can often be used in both areas.

5. Programs with marketing firms are as varied as the needs of the firms themselves. The extension specialist well versed in a particular phase of business management, or equipped with a particular set of analytical tools, or familiar with recent research findings, can make con- siderable improvement in the efficiency of operation of most marketing filTlS.

6. A major policy question at present is how far we should go in working with marketing firms. There is considerable agreement that some work is desirable from the point of view of providing greater knowledge of marketing, and that it can be done with little additional help and few special studies.

7. Arguments presented in favor of considerable expansion in mar- keting work are that legislators are willing to provide public support, the need is great in view of rising marketing costs and obvious inefficien-

ties, and benefits to agriculture are as great as for some of the fann production work

8. Those who caution against moving too ra idly in this area are

that once work with marketing firms is initiated there is no logical place to draw the line on extension programs.

9. The case for marketing information for consumer programs is largely based on the complexity of modern food marketing. The growth of new products and more processing would indicate that educational

rograms in buying foods for homes or institutions will expand in the future.

10. Extension programs in marketing can be successful if the educa- tional feature is stressed, and the programs are based on sound research, conducted by competent personnel using appropriate methods, and given the freedom and administrative support necessary for the job.

reluctant to divert resources away from agricultur 9 programs, and argue

DISCUSSION J. K. MA”’

I am happy to see that Dr. How has interpreted the terms “market- ing” and “e~tension’~ quite broadly, and that he has seen his way clear to including marketing programs with consumers, and with marketing firms, within the definition of his assignment. Accordingly, if my remarks appear to be confined mainly to that aspect of his paper concerned with marketing programs with farmers, this should be interpreted as a con- cession to the problem of limited time, rather than as any basic disagree- ment between the principal speaker and myself over the terms of reference.

Before commenting on specific aspects of Dr. How’s paper, may I refer briefly to this problem of definition, which seems to crop up so frequently in the deliberations of our Society. I suggest that one of the reasons why the problem is continually bedevilling us is that we too frequently start out with a name, a title, which is assumed to be accept- able, and then try to determine just what are the phenomena which fit the title. But surely this is not the right approach. Surely we should rather be studying continuously all the economic aspects of our particular field of interest. Then, as we study, patterns begin to emerge; we find that a certain event, a certain phenomenon, follows another phenomenon in time; we find that this pattern is repeated more or less regularly in any one place, and that the pattern may be duplicated elsewhere. Then, and only then, do we feel justified in thinking of these subsequent phenomena, these effects, if I can assume an identity between subsequence and con- sequence without incurring the displeasure of statisticians, as one phenom- enon, one effect. Having established that this unity does exist, we then

1Domiuion Bunmu of Smtttia.