Pricing And Advertising: Meaning,Definition & Importance Of Pricing And Advertising (Methods Of Advertising)

Table Of Contents

PRICING:

  • Definition Of Pricing
  • Price Determination
  • Cost Of Production
  • Quality Of Produce
  • Quantity Of Produce
  • Force Of Demand And Supply
  • Market Price
  • Seasonal Produce.

ADVERTISING:

  • Definition Of Advertising
  • Methods Of Advertising
  • Importance Of Advertising

What Is Pricing?

Pricing in terms of Agriculture is defined as a process whereby a farmer sets the price at which he will sell it’s products. It may be part of the farmers marketing plan. Pricing can also be the process of fixing produce prices, so as to abolish inadequacy an the tendency of arbitrary raising of revenue.

In setting prices, the farmer will take into amount the price at which he will acquire his seeds, labour cost, distance to the market place, competition, brand and the quality of the product.

Pricing leads to price stabilization to resuscitate the production and sale of the cash crops and general agricultural produce.

At times, the farmer receives poor price for his produce, under this conditions, there is absence of incentive for increased production or development in his farming enterprise.

Price Determinants

There are factors to consider in setting your price. Prices of agricultural commodities are generally determined by the following factors:

(a) Cost Of Production
(b) Quality Of Produce
(c) Quantity Of Produce
(d) Forces Of Demand And Supply
(e) Market Prices
(f) Seasonal Produce.

(a) Cost Of Production:

The farmer must consider the price of producing and marketing his product. The prices of agricultural commodities can be affected by production method employed, Technology employed in production and processing many either. Increased or reduce commodity price modern agricultural technologies and farm practices is capable of increasing farm yield. Examples include; pesticides, herbicides, tools & implements, fertilizers etc.

If the total cost of production is high, price will definitely be high. Extra resources may be used to get extra return.

(b) Quality Of Produce:

the price obtained from different farm products depend upon the quality. Consumer will pay more for rice which has no dot, or stone fatter animals will attract higher prices than skeletal ones. Pure white cotton lint will sell for a higher price than stained lint. By paying different prices for different grades of the produce, farmers will endeavour to improve quality of produce.

(c) Quantity Of Produce:

Where supplies are in abundance, prices are likely to fall and when supplies or products apscarce, price are likely to rise. Also, Where the installed capacity of the local agro-processing small and medium scale industries is full and sufficient to handle, all locally produced agricultural raw materials supluses are produced. This will in turn translate into lower prices of commodities.

(d) Forces Of Demand And Supply:

Prices of agricultural commodities in the open markets are determined by the interaction of demand and supply. It is generally known that when the decrease, supply decrease too. When prices increase, demand fall and When prices fall, demand rises. The implication is that at high prices, buyers buy less and sellers provide more for the market. At low prices, buyers demand more and sellers withdraw their goals from the markets. This results to excess of demand over supply.

(e) Market Price:

The market price is therefore the price at which produce is sold or the price the produce attracts it large number of middlemen and consumer. The commodity posses through these middlemen to the local market and then the populance obtain their suppies of the commodity.

(f) Seasonal Production:

Traditional crop production is seasonal. This affects market price such that when crop are in season, they are cheap. Seasonal production will lead to arise and fall in the price of affected produces. Normally crop price fall at harvest time when there is plenty produce available for sale in the markets.

Summary On Pricing

Pricing is the process wherby a farmer sets the price at which he will sell his products.

Price determinants are: cost of production, quality of produce, quantity of produce, forces of demand and supply, market prices and seasonal produce.

What Is Advertising?

Advertising means calling the attention of the members of the public to a produces, service or an ideain order to induce them to buy. Advertising is not the same thing with Advertisement.

Advertisement is the message of advertising and constitutes of oral or written words, illustrations and pictures that convey the message.

Importance Of Advertising

(1) It informs and educates the public on how to make use of the product.

(2) It makes potential consumers to be aware of the existence of a new product and the continued existance of older ones.

(3) It compels producers to improve the quality of their goods in order to hold their ground in a self and competitive market.

(4) It create and increase the demand for goods.

(5) It helps educates the public on the benefits derived from the use of a particular product.

(6) It provides a framework for measuring the standard of quality of the product.

(7) It influences wholesalers and retailer to stock the advertised goods.

(8) It helps in the notification of the product quality and packaging.

(9) It keeps the consumer informed of any positive changes.

Methods Of Advertising

(1) Direct Advertising:

This method of advertising seeks to capture a particular audience or target market, Examples: students, housewive, children or the aged. An appropriate medium that the groups likes to visit is used, For instance, children’s products are advertised during cartoon shows or in children magazines.

(2) Indirect Advertising:

It focus on the general public and not a particular target group or market. This method is the best for advertising general goods uch as bread, milk, detergents, educational services etc.

Advertising Media

The most common media used for advertising are generally the print media and the electronic media, which use the following methods:

(1) Television: Advertising on the television is a very effective way to reach people who have access to television sets. Advertisers study the programmes that attracts the largest number of viewers and place the advertisement during such programs,

(2) Newspapers And Magazines: The belong to the prints media. This type of newspaper or magazine to advertise a particular circulation of the newspaper or magazine, the paper type of product and the target audience.

(3) Radio: The radio is the most effective medium of advertising because it gets wider audience than television. Radio broadcast reach everybody in the listening vacinity of the radio.

(4) Posters And Hand bills: They are printed on A3, A4 and A5 papers and pasted at strategic places and busy areas. Posters and handbill are used to announce or advertise product.

(5) Bill Board: Busy streets, radio and public highways are adorned with billboard that advertise all sorts of products. They are effective advertising media.

(6) Calenders: These are used primarily as gifts to valued customers. It is also used to advertise the major products.

(7) Catalogues: They are booklets containing a range of products, their uses and prices. This type of advertisement is ideal for manufacturer in distant countries and town who deal mostly in mail orders,

(8) Cinema: Advertising is done on cinema screen before the beginning of the film show or at intervals to act as stimulus variation.

Summary On Advertising

Advertising means calling the attention of members of the public to a products, services or idea in order to induce them to buy.

Note that Advertising and Advertisement are not the same. Advertisement is the message of the Advertising and it constitutes the oral or written words, illustrations and pictures that convey the message.

The two methos of advertising are the Direct Advertising and Indirect Advertising. Advertising media includes the following: Radio, television, billboards, newspapers & magazines, posters & handbills, calenders, catalogues etc.

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