¥ MARKETING - concerns the constellation of processes and mechanisms of producing, processing, distributing and retailing goods and services - the transformation of basic factors of production (land, labour, management and capital) in conjunction with other inputs to produce products in the form, at the time and in the place demanded by the final consumer or user. - in short: matching capabilities to customers.
¥ ECONOMICS - concerned with the systematic logic and interaction of market mechanisms in achieving a balance between production and consumption, and between incomes and expenditure (including those between the government and the private sector, and between countries) - tracing the interactions through a formal and highly simplified logical theory of behaviour.
¥ ECONOMIC AND MARKETING POLICY - concerned with the interaction between collective or public actions and instruments to affect the outcomes of the market mechanisms so as to achieve more accceptable social (as opposed to private) patterns and distributions of economic activity (income and expenditure), and to assist with the growth and development of economic activity.
¥ This course has sought to provide some major elements allowing these differing functions to be integrated into a more systematic understanding of the way the world works.
¥ On AGRICULTURAL AND FOOD MARKETS - because we are experts in these areas, BUT ALSO because this focus provides a major example, well supported by research, investigation and data, of the interactions of these three major facets of human interactions and the evolution of social and economic institutions and behaviour patterns. Nevertheless, the principles we use are NOT SPECIFIC to these products and markets, they are GENERAL.
One view of the marketing complex and its inter-relationships with policy is provided by Ritson (Ch. 2, Agri-food Mktg., ed Padberg, Ritson and Albisu, CABI, 1997), as follows:
A key element of the economic analysis provided in this course has been the spatial equilibrium framework, which as has been repeatedly pointed out, also provides a framework for the analysis of market transformations over time and form as well as over space, concentrating on representation of margins between buyers and sellers. It thus provides a sensible framework for the centre and right hand sides of this picture. The left hand dise, in this course, has largely been concerned with public or policy reactions to popular understandings of market failures and excessive or abuse of marketing power in some form or other.
A key focus (if not the only one) of the economic approach is that it is the incomes (ÔprofitsÕ) provided by these margins (and the underlying sales) that determine the responses of suppliers, while it is the preferences of consumers which determine the responses of demanders (consumers and users). Overlaying this perspective of market transactions is the role and response (responsibility) of government to market outcomes - the social values and judgements of the electorates as reflected by those with political power, and the effects of these in determining market intervention by governments.
No one promised it would be easy! There are three major sets of difficulties with reconcilling the economic abstraction and simplification with the detail and differentiation of the markting approach. These may be summarised as follows (from a deliberately economic perspective):
THERE IS A CRITICAL DISTINCTION BETWEEN KNOWLEDGE & UNDERSTANDING - three quotes to bear in mind:
Some Background Management ideas (on the presumption that most of what we are dealing with here is essentially a management problem - either at the firm/institution level or at the level of public policy):
I. Management is the art of getting the right things done at the right time with as much harmony and cooperation and as little effort as possible.
from Bob Flood, Univ Hull
Management school
These critical characteristics can also be reflected in Coherence (relevance); Legitimacy; Sustainability (belonging) of policy/market interactions - see e.g. Harvey, - US Farm Bill, Fair or Foul? - referenced with the notes on US farm policy).
II. MANAGEMENT SCIENCE: INTEGRATING SKILL & EXPERIENCE WITH INTELLECT & EDUCATION
TWO ÔMODELSÕ as Caricatures of Strategic Management texts:
DELIBERATELY DERIVED FROM ROBERT PIRSIG: ZEN AND THE ART OF MOTORCYCLE MAINTENANCE - THE BEST BOOK ON TOTAL QUALITY MANAGEMENT (with acknowledgements, also, to S Challinor, who also uses this picture of management)
EDUCATION AND INTELLECT SHOULD PROVIDE SYSTEMATIC COMPLEMENTS TO AND SUBSTITUTES FOR CLASS AND EXPERIENCE.
The key to sustainable Competitive Advantage (CA):
These characteristics deny competitors ÒappropriatingÓ the resources and products. ÒAdded ValueÓ is an appropriate target variable. Creation and retention of added value requires that Competitive Advantage be synchronised with Distinctive Capabilities.
Four principal components to Distinctive Capabilities (DCs):
BOTH ÔMODELSÕ RAISE A SERIOUS QUESTION:
DOES MANAGEMENT SCIENCE HAVE THE SUN GOING ROUND THE EARTH?
Lesson 1: Being roughly right is more successful and satisfying than being exactly wrong
A POSSIBLE FRAMEWORK:
THE NATURE & STRUCTURE OF THE WHEELS: ADAPTIVE EVOLUTIONARY CHANGE
NOTICE: The implication is that the guts of a scientific or intellectual academic approach should be able to fit this scheme. Intellect and education ought to be able to transcend the boundaries and apply systematically and generally across a range of businesses, occupations and activities, including public policies, otherwise it is simply potted or canned experience - which can only be an input to, not a product of education and understanding. This course has attempted to give some flesh (as far as fam policies are concerned) to this system.
THE GREAT GRAIN ROBBERY - The Serendipitous Flapping of several (big) butterflies) in the early 1970s:
Devaluation of the US$, floating exchange rates and a period of rapid developed country inflation; OPEC; Russian (mis) harvest and grain purchases; Peruvian currents shifting and failure of the anchovy catch, all conspiring to escalate world food prices to extraordinary levels; and finally, the UK joined the EC.
The Fall-Out * Food Crisis; Inflationary growth; mis-allocation of investment; mis-alignment of policy. (review the history of farm policy and market movements in this course)
The Aftermath for agriculture: * CAP and Farming crises on both sides of the Atlantic -> GATT Uruguay Round -> further reform and change
All of which gave rise to major problems for both private management of the agro-food sector and for public policies. These cannot be understood without an appreciation of BOTH their genesis AND the economic fundamentals governing the flows of income and accumulations of wealth in the system. BUT, much of the policy debate seems sidetracked by either the budgetary costs control or by the legal and executive systems of control (?) which have emerged to deal with yesterday's problems.
BEWARE THE SUN GOING ROUND THE EARTH. If we want to get to the moon, we had better make sure we have the cosmos in the right order.
SOME INTERIM CONJECTURES:
TWO PROPOSITIONS:
PUTTING IT TOGETHER - THE POWER OF THE TRINITY?
AN OUTLINE SCHEMATIC ÒMODELÓ : A DIFFERENT VIEW OF THE ÔBICYCLEÕ
The Late-modern Art of Strategic management:
Transactions costs and their associated transactions systems are a key to the strength and structure of the struts connecting the principal elements of this Òglobal societyÓ, which is more like the globe in its diversity than in its uniformity - but there remains a fundamental (meta) physics and chemistry which keeps the whole thing spinning.
Trust is the crucial medium of exchange in our society: with it, almost anything is possible; without it, almost nothing can be done. If we share a common trust in our understandings of the sytems we live in, then we can arrive at common sensible, sustainable, and concensual solutions. Without the common trust, war, war, war; and jaw, jaw, jaw, is all we will get.
Lamarkism rules OK - the environment affects the genotype of our social institutions and organisations - the bits that replicate - as well as their phenotypes - the bits that grow
A key lies in breaking down the conventional boundaries between markets and governments, business and states, private trades and regulation - e.g Perrier water's reaction to the miniscule chance of a little non toxic but obnoxious chemical in its purest of pure water (which is much less regulated than tap water); ShellÕs Brent Spar fiasco; Biotechnology debates; BSE disaster and so on......
Thus, for instance:
PLEASE CONTINUE AND REVISE THESE LINES OF ARGUMENT AND KEEP ME INFORMED - I THINK IT IS VITALLY IMPORTANT AND HOPE YOU DO TO.
MAY YOUR GODS BLESS YOU ALL, KEEP YOU SAFE AND PROVIDE YOU WITH INSIGHTS AND UNDERSTANDINGS WHICH HAVE SO FAR EVADED THE REST OF US. LET ME KNOW WHEN AND IF THEY DO.
Finally, thanks for paying attention and Good Luck.
Back to DRH Lecture Note Site.