Agribusiness

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I am an Agribusiness student at The University of Nairobi, Kenya. Every now and then I get questioned on my area of study and why I choose it. Agribusiness management is relatively a new degree course. It came about due to the need of Agribusiness professionals in the value chain of Agricultural produce. So you may ask what exactly is Agribusiness and how is it relevant?

Agribusiness is basically conversion of Agriculture into a profit-making venture and value addition of Agricultural produce. Agribusiness includes a wide range of activities such as farm production, raw material processing, marketing and distribution of finished products.There is also the value addition in Agribusiness which basically is the transformation of a product from its original value to a more valuable form.

Agribusiness can be simple yet so complex. One has to consider the input cost in reference to revenue and economies of scale on the production level. The needs and desires, willingness and ability i.e. demand of the consumers come into play when it comes to distribution of Argo-products. Agribusiness simply links the Agricultural industry with the food industry.

Value addition of an Agricultural product involves utility change. Utility is the basis of satisfaction of a customer. One can change utility by changing the form of a product for example processing of milk into yogurt which is more attractive to consumers.

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Form utility ensures that the product is more acceptable to consumers, in line with their tastes and preferences. Export of goods is a good example of place utility. A farm can reap more revenue by getting his goods to the right consumers and that’s one reason why export markets flourish. The horticultural is an example of such as farmers who have large scale farms in Africa sell their produce in the European market where there more consumers of horticultural produce.

source:en.wikipedia.org

Middle men are a necessary evil (quite debatable) in Agribusiness as they take part in possession utility. They save on time and costs that producers would use in distribution. They ensure that goods are accessible by consumers at an acceptable price. They are also a linkage between producers and consumers. They satisfy time utility.

Agribusiness involves the consideration of a marketing mix. That is all the marketing activities that complement each other. The mix includes the product which is the basis of the marketing process.The other elements of the marketing mix include place, promotion and price.

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There are commonly referred to as the the 4 Ps of Marketing.Price is a measure of value of product and a compensation for cost of buying.Elements of process, physical evidence and people add to the  basic 4 Ps to make include a wholesome marketing mix i.e 7ps.

Agribusiness is in every way essential. Feel free to comment and share!