Introduction to Part B
Food chain marketing
Caspar Krampe
Marketing and Consumer Behaviour Group
Food production chain

General Aims of Part B
• Learn about the behavior of the consumer and its implications for food chains.
• Refer to: Reader Page Part B-2
• Develop a consumer-oriented perspective
Ø As a course
Ø As a future graduate in the domain of food tech

Schedules of Part B
16 May Introduction to food chain marketing
19 May Market segmentation and targeting
25 May Consumer decision-making
31 May Competition between and within chains
02 June Chain integration, innovation and sustainability

Course materials
Reader
PowerPoint
Brightspace site
Knowledge clips
Lectures
Questions and explanations;
Start your assignment on time,
not during the excersise!
Exercises
The group product;
“Oatly” case
3 Group Assignments
Application in relation to
other parts of this course
“French Fries” case

Course materials
The group product;
“Oatly” case
3 Group Assignments
Group 1
Group 2
Group 3
Group 4
Examples

3 Group Assignments
Ø Aims to better understand the concepts explained during the
lectures, applying them to a real case.
• Groups of four to five students
• Each group makes an assignment about the case
- Desk research & Observation
• Assignment questions are shared on Brightspace
• Please use the templates provided to complete the assignments
• Opportunity for questions and explanation during exercise hours
- In Microsoft Teams (the schedule for answering questions is already
updated on Brightspace): 5 min per group
• Start in time, not during the exercise!
• Free riding problems: contact the teacher (if you cannot solve it by yourself)

Assignments
Upload your assignments to Brightspace before the deadlines indicated
below:
Assignment 1 (Product analysis and customer-focussed business)
Group 1 & 2
Exercise: 23 May
Deadline: 01 June 17.00
Assignment 2 (Consumer decision-making)
Group 1 & 2
Excersie: 10 June
Deadline: 13 June 17.00
Assignment 3 (Competition)
Group 1 & 2
Excersie: 14 June
Deadline: 22 June 17.00

Today’s lecture
0 1 0 2
• Know why and how chains are shaped by
market forces
• Elaborate on the complexity of an aggregate
marketing system
Aggregated marketing system
10 min
Break
• Be able to draw meaningful chain maps
Chain mapping

1
Aggregate Marketing
System

Learning objectives
At the end of this lecture, you
• should have an understanding of the components of
an ”aggregated marketing system”
• should know what the market econonmy entails, how the
rule of the games are set and why specialization is
important

An example
Ø How does the chain for this pencil really look like?
By Milton Friedman

Aggregate marketing system
Ø How does the chain for this pencil really look like?
Ø Another example: Breakfast at Tiffany’s (Reader Page B-4)

Aggregate marketing system
Market forces
Ø How does the system work?

Market forces
Ø What are the basic characteristics of a market economy
q Limited intervention from the government.
- The motive of self-interest – the “invisible hand”
- The producer gets to decide what to produce, how much to
produce, what to charge customers for those goods, and
what to pay their employees.
- These decisions in a free-market economy are influenced by the
pressures of competition, supply and demand.
q Competition

Specialization
- Definition: An organization concentrates its productive efforts
on producing a limited variety of goods.

Specialization
- Definition: An organization concentrates its productive efforts
on producing a limited variety of goods.
- Not only the first form of exchange, but also the first step in the
formation of a food chain.

Specialization
- Definition: An organization concentrates its productive efforts on
producing a limited variety of goods.
- Not only the first form of exchange, but also the first step in the
formation of a food chain.
- The basis of an “aggregate marketing system”

Specialization
- Definition: An organization concentrates its productive efforts on
producing a limited variety of goods.
- Not only the first form of exchange, but also the first step in the
formation of a food chain.
- The basis of an “aggregate marketing system”

The rule of games: Institutions
Ø Institutions can be practically defined as the set of rules
and organizations that surround the chain and determine
“the rules of the game”,
Ø E.g., the Government
By laws and regulations, courts and control institutions (EFSA)

The rule of games: Institutions
Ø Institutions can be practically defined as the set of rules and
organizations that surround the chain and determine “the
rules of the game”,
Ø E.g. the Government
Ø E.g., Certificate organizations

The rule of games: Institutions
Ø Institutions can be practically defined as the set of rules and
organizations that surround the chain and determine “the
rules of the game”,
Ø E.g. the Government
Ø E.g. Certificate organizations
Ø E.g., NGOs, Interest groups

The rule of games: Institutions
Institutional factors Examples
Regulative Laws and regulations
Courts
Customs
Control institutions (EFSA)
Socio-economic Labour Unions
Special interest groups
Chamber of Commerce
Certification organizations (Utz, Fair Trade, Organic)
Cultural Cultural norms
Informal authorities
Ø A summary table

2 Chain Analysis
Farm to Fork

Learning objectives
At the end of this lecture, you
• should be able to map the (food) chain
• should distinguish the units of analysis and assessment
of relevant firm components

Understand the chain: “what”
To satisfy consumers
To jointly create benefits

Understand the chain: “why”
To satisfy consumers
To jointly create benefits
For managers it is important to know
- where the inputs come from (to assess risks,
uniqueness, continuity of supply...)
- how their products reach consumers

Understand the chain
Ø Select the most important service providers that add values.
Ø Different people draw chains differently.
Ø The underlying logic
Ø Mapping a chain: A chain is a mental model to simplify the
messy network that an economy actually is.

Analyzing the structure of chains
Ø Including everything?
• Makes the chain drawing less insightful
There are some guidelines to map a chain!

Analyzing the structure of chains
Ø First, determine the “focal company”
We take the example: FrieslandCampina

Analyzing the structure of chains
Ø Second, determine the unit of analysis: the “business”
Smallest unit in a company that...
• Is not necessarily a technical activity
• Has its own set of competitors
• Competes on the basis of a brand (or several brands that
logically go together)
• Has a leader responsible for strategic planning (and
profitability)
• Has its own vision or culture (though possibly
influenced by higher corporate levels)
• Should not be confused with a “company”.

A “business unit”
Corporation
Division

A “business unit”
Corporation
Division
Strategic business units

A “business unit”
Corporation
Division
Strategic business units

Analyzing the structure of chains
Ø Third, assess the relevance
q Make a selection on the basis of:
• Contribution to the core benefits of the product

Analyzing the structure of chains
Ø Third, assess the relevance
q Make a selection on the basis of:
• Contribution to the core benefits of the product
• Physical product or augmented product
• Ownership (contributor or service-provider, like transport)
q Important: Activities (e.g., producing milk or pasteurization) are not
businesses!

Analyzing the structure of chains
Ø Fourth, perspective of the focal business unit
(upstream or downstream)

A “business unit”: focal firm for chain analysis

A “business unit”: focal point for chain analysis
Step 1: Decide the “business unit”
Group assignment product
More

A “business unit”: focal firm for chain analysis
Step 2: Draw the upstream and downstream
Focal business unit
Upstream Downstream
1st Tier
2st Tier
3rd Tier 1st Tier 2st Tier 3rd Tier
? ?

B1 Summary
ØAggregate marketing system
Keywords: Specialization, market forces, institutional
influences
ØMapping the chain
Key words: business units, selection of key players, relevance.