The functional basis of agricultural marketing

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The functional basis of agricultural marketing

Kononenko Ganna,

PhD in Economics, Associate Professor,

Associate Professor of the Department of Marketing State University of Trade and Economics Kyiv

The article is examined key principles, functions, systems and methods that allow ensuring market orientation of the production and sales activities of the enterprise, where effective management decisions are based not only on the capabilities of the manufacturer, but also primarily the needs of the agro-industrial market, existing and potential needs of consumers and buyers of agricultural products. It was the first time to propose a definition of the functional basis of agricultural marketing - it is a system of organizational, economic, technical, financial and commercial functions of enterprises, united by a synergistic effect, and aimed at optimal and adaptive satisfaction of consumer demand for agricultural products and food security. It has been established that agricultural marketing can be implemented in mechanisms of mutually beneficial exchange between various market subjects, create conditions for identifying consumer requirements and determining the possibilities of their satisfaction, which will provide an opportunity to study the agricultural market and forecast its dynamics, form demand for the products of this market and stimulate it distribution The main aim of the research is to offer the author's interpretation of the concept of "agricultural marketing" and to determine of the functional basis of agricultural marketing in the conditions of martial law. The main hypothesis of the research is to prove the effectiveness of the functional basis of agricultural marketing in the conditions of a full-scale invasion of the Russian Federation on the territory of Ukraine. It has been proven that for effective planning and management of agrarian business of the national economy in the conditions of a full-scale invasion, as well as taking into account the existing conditions (alienation of territories, damage and occupation of part of the land), entrepreneurs are forced to effectively and quickly implement agricultural marketing in its economic activity for researching consumer needs, forecasting demand, studying assortment policy and developing a production program, studying channels of goods movement and organizing safe sales. agricultural marketing production

Keywords: agricultural marketing, functional basis, martial law, mechanism, system, concept.

КОНОНЕНКО Ганна,

к. е. н., доцент, доцент кафедри маркетингу Державного торговельно-економічного університету, м. Київ

ФУНКЦІОНАЛЬНИЙ БАЗИС АГРАРНОГО МАРКЕТИНГУ

У статті досліджено ключові принципи, функції, системи та методи, що дають змогу забезпечити ринкову орієнтацію виробничо- збутової діяльності підприємства, де в основі прийняття ефективних управлінських рішень не тільки можливості виробника, а насамперед потреби агропромислового ринку, існуючі та потенційні потреби споживачів і покупців сільськогосподарської продукції. Вперше запропоновано визначення функціонального базису аграрного маркетингу - це система організаційно-економічних, технічних, фінансових та комерційних функціоналів підприємств, об'єднаних синергічним ефектом і спрямованих на оптимальне та адаптивне задоволення попиту споживачів на сільськогосподарські продукти та продовольчу безпеку. Встановлено, що аграрний маркетинг можна імплементувати в механізми взаємовигідного обміну між різними суб'єктами ринку, створити умови для виявлення вимог споживачів та визначення можливостей їх задоволення, що надасть можливість вивчення сільськогосподарського ринку та прогнозування його динаміки, формування попиту та стимулювання його розподілу. Дослідження має за мету запропонувати авторське трактування поняття "аграрний маркетинг" та визначення його функціонального базису в умовах воєнного стану. Основною гіпотезою дослідження є доведення ефективності функціонального базису аграрного маркетингу в умовах повномасштабного вторгнення рф на територію України. Доведено, що для ефективного планування та управління аграрним бізнесом національної економіки в умовах повномасштабного вторгнення, а також з врахуванням умов, що склалися (відчуження територій, пошкодження та окупація частини земель), підприємці змушені ефективно та

швидко імплементувати агромаркетинг у свою господарську діяльність задля дослідження потреб споживачів, прогнозування попиту, вивчення асортиментної політики, розроблення виробничої програми, вивчення каналів товароруху та організації безпечного збуту.

Ключові слова: аграрний маркетинг,

функціональний базис, воєнний стан, механізм, система, концепція.

Introduction

For effective planning and management of agrarian business of the national economy in the conditions of a full-scale invasion of the Russian Federation on the territory of sovereign Ukraine, as well as taking into account the existing conditions (alienation of territories, damage and occupation of part of the land), agricultural entrepreneurs are forced to effectively and quickly implement agricultural marketing in its economic activity for researching consumer needs, forecasting demand, studying assortment policy and developing a production program, studying channels of goods movement and organizing safe sales (Bahorka, Kadyrus, 2023), (Beleviat, 2021).

The modern concept of agro marketing is that all activities of the enterprise are based on knowledge of consumer demand and its change in the future. The functional basis of agricultural marketing puts the production of agricultural products in a functional dependence on demand and requires the production of agricultural products in the range and quantity needed by the consumer. That is why agricultural marketing directs its efforts to the creation of effective sales channels and comprehensive formation of demand (Burova, 2012), (Volkova, 2012).

Bagorka, Kadyrus, Burova and Volkov paid attention to the problems of the formation of the marketing system of an agricultural enterprise. The main issues of agricultural marketing were investigated in the scientific works of Belevyat (2021); Kvyatko, Vitkovsky (2019); Kondratyuk (2020); Kuzkina and Pravotorov (2015). Peculiarities and mechanisms of the formation and functioning of regional agricultural marketing systems were studied in the works of Lagodienko V., Basyurkina N., Turlenko N. (2020), Morokhova V., Boyko O., Bulavchyk M. (2019) and Solovyov I. (2010) The issues of the development and functioning of agricultural enterprises remain in the circle of scientific research by the following authors: Bondarchuk L., Mazur N., Tsalko T., Kovalenko M., Zaritska N. and Puzyryova P. (2023). Among the foreign authors, scientific work in the field of formation and development of agricultural marketing belongs to Davis J. H.A, and Gilbert R.A. (1957), who first proposed the term agribusiness marketing.

Also, research on the issue of agromarketing was devoted to the scientific works of Branson R.E. and Norvell D.G. (1983). However, the functional basis of agricultural marketing is still not sufficiently disclosed, especially in conditions of martial law.

In modern conditions, with a full-scale invasion of the territory of sovereign Ukraine, the popularity of agrarian marketing among agricultural enterprises is growing significantly, but its practical implementation is extremely insufficient, and sometimes, due to the use of only certain elements, it is ineffective. Therefore, there is an objective need to establish a full functional basis of agricultural marketing in order to meet the needs of consumers (Bondarchuk and all, 2023).

Agricultural marketing is able to offer mechanisms of mutually beneficial exchange between various market subjects, create conditions for identifying consumer requirements and determining the possibilities of their satisfaction, which will provide an opportunity to study the agricultural market and forecast its dynamics, form demand for the products of this market and stimulate its distribution.

Thus, the main aim of the research is to offer the author's interpretation of the concept of agrarian marketing and to determine the functional basis of agrarian marketing in the conditions of martial law.

The main hypothesis of the research is to prove the effectiveness of the functional basis of agricultural marketing in the conditions of a full-scale invasion of the Russian Federation on the territory of Ukraine.

The following methods were used to prove the main hypothesis: epistemological analysis, to study the genesis of the concept of "agrarian marketing"; theoretical generalization, analysis, synthesis, induction and deduction, to identify general patterns of the functional base of agroindustrial marketing; structural and logical analysis, to study the dynamics and structure of indicators of agriculture; grouping and classification, to systematize factors affecting agricultural marketing; tabular and graphic ones for a visual representation of the analytical data and provisions of the study. The information base of the research consists of regulatory and legal acts, statistical and analytical materials of the State Statistics Service of Ukraine, scientific periodicals, monographs, the results of scientific research by domestic and foreign scientists in the field of agricultural marketing, reference and periodical literature, special scientific and other sources.

In the main part of the article, the peculiarities of the interpretation of the concept of agricultural marketing will be investigated and a number of important functions will be given that will ensure effective production and satisfaction of consumer needs; the functional basis of modern agricultural marketing is presented, taking into account aspects aimed at improving production and sale of agricultural products during martial law; analysis of the activity of the agrarian sector in Ukraine during a full-scale war will allow to assess all the problems and opportunities for the further development of agrarian marketing.

1. Features and functions of marketing in the agricultural sector

The prerequisites for the emergence of agricultural marketing in Ukraine are related to the transition to a market economy and the need to navigate the situation on the market in terms of effective positioning of agricultural enterprises on it.

There are many interpretations of agricultural marketing, but the general basis is that agricultural marketing is aimed at satisfying the needs of consumers, ensuring the competitiveness of agro-industrial production and each of its branches, taking into account the regularities of the functioning and development of the market for agricultural products and food. Also, agricultural marketing can be interpreted as an activity aimed at implementing the concept of marketing at all stages of reproduction of agricultural products with the priority of maximum application of the selfregulating market mechanism. The integration of the functional basis of marketing (its tools, methods, methods, etc.) into the agrarian environment at all stages of reproduction of agricultural products will make it possible to use the mechanism of self-regulation of the market as much as possible, because any economic decision must be made based on the analysis of the market situation and the trends of its change, and also taking into account the possible reaction of the market to the adopted decision. It is possible to fully realize this task in the agricultural sector only if there is a conscious need to apply agro marketing both on the part of the subjects of the industry and on the part of the state (Kuzkina, Pravotorov, 2015).

Agricultural marketing performs a number of important functions for effective production management and ensuring satisfaction of consumer needs. The main functions of agricultural marketing include the following (Figure 1).

These functions help agricultural enterprises to effectively interact with the market and ensure the successful sale of their products (Lahodiienko and all, 2020).

Today, most enterprises of agro-industrial production face many problems that exist not only in the domestic, but also in foreign markets (Ponomarenko, 2017):

imperfection of the management structure;

inefficient pricing system;

impossibility to identify real consumer demand;

reluctance to organize a high-quality communication, sales, product policy;

inability to develop a clear strategy for the development of the enterprise.

Figure 1. The main functions of agricultural marketing in today's conditions Source: summarized by the author based on (Morokhova and all, 2019).

The peculiarities of marketing in the agricultural sector are closely related to the specifics of agricultural production, which is characterized by the diversity of the range of products and market participants, as well as the diversity of organizational forms of management. The purpose of the operation of an agroindustrial enterprise must be consistent with the performance of a set of marketing functions, the essence of which is as follows:

* firstly, orientation to the sales market, which involves the study of its objects and subjects, that is, consumers, competitors, information about the market situation and goods;

secondly, market influence through its study and analysis, adaptation to market conditions;

thirdly, the organization of the system of sales of competitive products, collection and processing of information;

fourthly, orientation to achieve long-term commercial success, which involves the subordination of short-term interests to the goals of long-term stable advantages over the market (Soloviov, 2010).

At the same time, marketing functions are based on a set of principles such as:

studying the state and dynamics of consumer demand and using the obtained data in the process of developing and making business decisions;

maximum adaptation of production to market requirements in order to increase the efficiency of the enterprise's functioning, the criterion of which is the general indicator of economic activity - profit;

influencing the market and consumer demand through means such as advertising, promotion, sales promotion and personal selling.

That is, all the above marketing functions and principles of agro-industrial enterprises provide an opportunity to form the functional basis of agricultural marketing in modern conditions, which will lead to improvement and more effective functioning of enterprises in the agricultural sector of Ukraine.

Functional basis of agricultural marketing in modern conditions

Currently, the country's agro-industrial enterprises use separate functions and strategies of marketing activities, which give a sufficient effect. The effective functioning of the entire agro-industrial complex depends on how correctly the agricultural marketing system is built, but the existing economic situation does not allow most producers to apply the entire marketing system.

Therefore, the main problems hindering the development of agricultural marketing in Ukraine are mentioned in Figure 2.

Agricultural marketing is a set of strategies and actions aimed at ensuring the effective sale of agricultural products. It covers all stages from cultivation to delivery of products to the market. The agricultural sector has its own characteristics, such as dependence on natural conditions, seasonality and high competition. Therefore, agricultural marketing includes the study of market conditions, the development of effective pricing strategies, product promotion and product quality assurance.

Agricultural marketing is a specific branch of marketing, which is determined by the peculiarities of the agricultural sector. We will present the main updated principles of agricultural marketing, taking into account modern conditions (Table 1). These principles reflect the main aspects that are important for successful agricultural marketing.

Figure 2. The main obstacles to the development of agricultural marketing in Ukraine

Source: built by the author based on (Ishchejkin and all, 2022).

Basic updated principles of agricultural marketing

Table 1

Source: systematized by the author based on (Olshanska, Puzyrova, 2023).

In order to establish the essence and meaning of the functional basis of agrarian marketing, it is necessary to more thoroughly investigate its main components: functions of agrarian marketing; updated principles of agricultural marketing under martial law; agricultural marketing mechanism; systems and methods of agricultural marketing. Because only a complete and synergistic combination of these components will help to optimize consumer demand for agricultural products and ensure food security.

The functional basis of the modern agricultural marketing mechanism takes into account various aspects aimed at improving the production, sale and consumption of agricultural products. Here are the main key elements of this mechanism.

Market research in wartime conditions - analysis of supply and demand in the market, study of consumer trends, competitiveness and other factors that may affect agricultural products in wartime.

Marketing strategy - development of effective strategies for promoting products to the market, taking into account the characteristics of the target audience, competitive advantages and other factors.

Digital technologies - the use of information technologies, websites, social networks and other online channels to attract consumers, create a brand and conduct effective advertising.

Production management - use of modern production management methods to optimize processes, improve product quality and reduce costs.

Sustainable production - paying attention to sustainability of production, application of environmentally friendly methods and responsible use of resources.

Supply and logistics systems - improvement of the supply chain, ensuring efficient and timely transportation of products from the producer to the consumer.

Brand development - creation and management of a brand that reflects the values and quality of products, helps to build consumer trust.

These elements make it possible to create a comprehensive approach to agricultural marketing aimed at achieving efficiency and sustainable development in agriculture (Puzyrova and all, 2021).

In Figure 3 presents the functional basis of agricultural production marketing taking into account the military situation in Ukraine.

Also, when studying the functional basis of agro marketing, systems (Table 2) and methods (Table 3) of agricultural marketing, which combine various elements and tools for effective management of agricultural products, sales and consumption, become important. The following are identified among the main key systems of agricultural marketing.

These systems interact with each other, creating a comprehensive approach to agricultural marketing that promotes efficient production and successful market entry of products. Agro marketing uses various methods to ensure successful production and sale of agricultural products (Table 3).

The main key systems of agricultural marketing

Table 2

Source: systematized by the author based on (Bahorka, & Kadyrus, 2023; Burova, 2012).

Basic methods of agricultural marketing

Table 3

Source: systematized by the author based on (Kviatko, & Vitkovskyi, 2019; Soloviov, 2010).

These methods help agricultural producers to maximize production, attract consumers, and effectively market their products in the face of military aggression.

So, on the basis of the conducted theoretical research, we can propose the definition of the functional basis of agricultural marketing as a system of

organizational, economic, technical, financial and commercial functions of enterprises, united by a synergistic effect, and aimed at optimizing consumer demand for agricultural products and ensuring food security.

Analysis of the agricultural sector activity during the martial law

Assessing the real state of the agricultural sector of the economy, it should be noted that in 2022 the agricultural sector suffered significant losses as a result of the full-scale war of the Russian Federation against Ukraine. According to the assessment of the Ministry of Agrarian Policy of Ukraine and the Kyiv School of Economics, the total amount of losses caused to the agricultural industry as a result of the large-scale Russian invasion of Ukraine reached USD 6.6 billion as of September 15, 2022. At the same time, indirect losses in the agricultural economy of Ukraine due to a decrease in production, the blockade of ports and an increase in production costs are estimated at USD 34.25 billion (in particular, in crop production due to a decrease in production - USD 11.2 billion; in livestock production - USD 348.7 million; losses due to a reduction in the production of winter crops are estimated at USD 3 billion; in perennial crops - at USD 322 million; losses due to disruption of logistics amount to USD 18.5 billion).

Figure 3. The functional basis of agricultural marketing in the war period Source: compiled by the author based on (Ishchejkin and all, 2022; Puzyrova and all, 2021).

The total number of economic entities of the agro-industrial complex that suffered losses as a result of the armed aggression of the Russian Federation is 2 653 units (arable land decreased by 1.9 million hectares, perennial plantations decreased by 9 thousand hectares). In addition, the territory of about 1 million hectares needs to be examined for the presence of explosive objects (Figure 4-6).

Figure 4. Average sale prices for agricultural products sold by enterprises in 2022 (UAH thousand for one ton)

Source: compiled by the author based on (State Statistics Service of Ukraine, n.d.).

Figure 5. Total index of expenditures for production of agricultural products1 in 2022

Source: compiled by the author based on (State Statistics Service of Ukraine, n.d.).

At the same time, in 2022-2023, in the conditions of a full-scale war, the agro-industrial complex of Ukraine is remarkably stable and still remains one of the guarantors of ensuring food security in the world. In total, in 11 months of 2022, Ukraine exported 50.9 million tons of agricultural and food industry products for a total amount of USD 21.1 billion. Adaptation of the agrarian policy of Ukraine to the relevant provisions of the Common Agrarian Policy of the EU, bringing domestic legislation in this area into compliance with the requirements related to Ukraine's accession to the EU.

Figure 6. Output of agricultural products for 2018-2022 (UAH billion) Source: compiled by the author based on (State Statistics Service of Ukraine, n.d.).

At the same time, legislative and regulatory acts, which will be difficult for farmers to implement in war conditions, should be adopted with a delayed implementation period - after the end of martial law (and in some cases - with the introduction of an adaptation period of the effect of certain provisions after its end).

Conclusions

Therefore, the set of researched and used data, their evaluation and analysis, complex generalization and appropriate systematization using general and special methods, united by a common theoretical base, methodology and research algorithm, made it possible to ensure scientific reliability, adequate interpretation of work results, reasonableness and argumentation of practical conclusions. Thus, the author was the first to propose the following definition of the functional basis of agricultural marketing as: it is a system of organizational, economic, technical, financial and commercial functions of enterprises, united by a synergistic effect, and aimed at optimal and adaptive satisfaction of consumer demand for agricultural products and food security.

It has been proven that agricultural marketing is a management concept that ensures market orientation of the production and sales activities of the enterprise, where effective management decisions are based not only on the capabilities of the producer, but primarily on the needs of the agroindustrial market, existing and potential needs of consumers and buyers of agricultural products.

As a result of the conducted research, we can claim that the main hypothesis of the research has been confirmed, since only a correctly built functionality of agricultural marketing and full compliance with the principles, functions, mechanism, systems and methods of agricultural marketing will ensure research of consumer needs, demand forecasting, and ensuring safe sales in wartime conditions.

Among the prospects for further research, it is possible to single out the further development of agricultural marketing, taking into account the experience of the leading countries of the world and with an orientation towards the EU, which will provide an opportunity for all stakeholders to participate in the process of ensuring food security and increase state support in terms of giving freedom to farmers to meet the needs of the population in agricultural products.

Список використаних джерел reference

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