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Commodity Marketing II

by: Don Langworth DVM

Commodity Marketing II ABM 132

Marketplace > Morgan Community College > General > ABM 132 > Commodity Marketing II
Don Langworth DVM

GPA 3.68


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This 5 page Class Notes was uploaded by Don Langworth DVM on Thursday October 15, 2015. The Class Notes belongs to ABM 132 at Morgan Community College taught by Staff in Fall. Since its upload, it has received 14 views. For similar materials see /class/223564/abm-132-morgan-community-college in General at Morgan Community College.


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Date Created: 10/15/15
ipal Pam s u 11mm otnltnnl me nnlugiual ractnr s thtisPEST Analysis mrk w or TwFwawwwH planmng The organrzatron s marketrng enmronment rs made up from 1 The rntema1 enmronment eg stafforrntema1 customers of ce technology wages and nance etc 2 W our external u t m r unnh r our compeutors etc 3 DHquot wd Mr F um t u hxr forces and Technologrcal forces These are known as PEST factors Pnliticalectnrs h with n quotatquot power ofconsumers and otherbusrnesses You must consrderrssues such as 1 How stable rs the pohuca1 enmronment7 2 Wm government pohcy m uence laws that regulate or tax your busmess7 3 What rs the govemment s posrtron on markeung ethrcs7 4 What rs the govemment s pohcy on the economy7 5 Does the government have amew on culture andrehgxon7 6 N F39T F N or others7 Ecnnnmic Factnrs Thrs xs 1 Interestrates 2 The level of in ation Employment level per capita 3 Longterm prospects for the economy Gross Domestic Product GDP per capita and so on Sociocultural Factors The social and cultural in uences on business vary from country to country It is very important that such factors are considered Factors include lWhat is the dominant religion 2What are attitudes to foreign products and services 3Does language impact upon the diffusion of products onto markets 4How much time do consumers have for leisure 5What are the roles of men and women within society 6How long are the population living Are the older generations wealthy 7Do the population have a strongweak opinion on green issues Technological Factors Technology is vital for competitive advantage and is a major driver of globalization Consider the following points 1 Does technology allow for products and services to be made more cheaply and to a better standard of quality 2Do the technologies offer consumers and businesses more innovative products and services such as Internet banking new generation mobile telephones etc 3How is distribution changed by new technologies eg books via the Internet ight tickets auctions etc 4Does technology offer companies a new way to communicate with consumers e g banners Customer Relationship Management CRM etc Hedging Soybeans Example Hedging in the futures market is a two step process Depending upon the hedger39s cash market situation he will either buy or sell futures as his rst position For instance if he is going to buy a commodity in the cash market at a later time his rst step is to buy futures contracts Or if he is going to sell a cash commodity at a later time his rst step in the hedging process is to sell futures contracts The second step in the process occurs when the cash market transaction takes place At this time the futures position is no longer needed for price protection and should therefore be offset closed out If the hedger was initially long long hedge he would offset his position by selling the contract back If he was initially short short hedge he would buy back the futures contract Both the opening and closing positions must be for the same commodity number of contracts and delivery month Example Assume in June a farmer expects to harvest at least 10000 bushels of soybeans during September By hedging he can lock in a price for his soybeans in June and protect himself against the possibility of falling prices At the time the cash price for new crop soybeans is 600 and the price of November bean futures is 625 The delivery month of November marks the harvest of new crop soybeans The farmer short hedges his crop by selling two November 5000 bushel soybean futures contracts at 625 Typically farmers do not hedge 100 percent of their expected production as the exact number of bushels produced is unknown until harvest In this scenario the producer expects to produce more than 10000 bushels of soybeans By the beginning of September cash and futures prices have fallen When the farmer sells his cash beans to the local elevator for 572 a bushel he lifts his hedge by purchasing November soybean futures at 595 ABM 132 Unit 2 Check Your Knowledge Please ll in the blanks on this chart and answer the question below I I Cash I Futures IJune IPrice for ISells 2 November I Inew crop soybeans at Isoybean contracts 6 00bushel Iat 625bushel ISeptember ISells 10000 bushels IBuys 2 November I Isoybeans at Isoybean contracts at I I 5 72bushel I 595 bushel IResult I ICash sale price bushel I I IFutures gainloss bushel I I INet selling price bushel What price would the farmer have received if he had not hedged ABM 132 Unit 2 Check Your Knowledge Market Planning Checklis t Use this list to develop your marketing plan Before you launch a marketing campaign answer the following questions about your business and your product or service From Have you analyzed the total market for your product or service Do you know which features of your product or service will appeal to different market segments In forming your marketing message have you described how your product or service will benefit your clients Have you prepared a pricing schedule What kinds of discounts do you offer and to whom do you offer them Have you prepared a sales forecast Which media will you use in your marketing campaign Do your marketing materials mention any optional accessories or added services that consumers might want to purchase If you offer a product have you prepared clear operating and assembly instructions if required What kind of warranty do you provide What type of customer service or support do you offer after the sale Do you have product liability insurance Is your packaging likely to appeal to your target market If your product is one you can patent have you done so How will you distribute your product Stat Your Own Business 777e Only StartUp Book You 7 Ever Neeo by Rieva Lesonsky and the staff of Entrepreneur Magazine Entrepreneur Press


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