Market Knowledge

4.2.1 The level of existing market knowledge and practices

The Scoping Study stressed the importance of improving market knowledge and feedback if the performance of the supply chains servicing these market segments were to be improved (Collins et al.

2006). Currently these supply chains are supply driven rather than pulled by the consumer demand. The traditional selling system involves large quantities of mixed quality fruit with a short shelf life being delivered onto the market. This system results in heavy price discounting by wholesalers, importers and retailers in order to clear stocks and compensate for potentially high wastage rates.

Since the majority of growers in the Scoping Study did not take responsibility for the harvesting and selling of their crop they had little knowledge of markets or interest in meeting the needs of their buyers.

Little market understanding made us dependent more on contractors/commission agents and they are the mafia in marketing system; they never wanted to change the existing system as they never shared market information. (Grower 6)

We have close communication with our exporter and understand what he wants but little is known how the ultimate consumers respond to our product. (Grower 1)

However growers, especially those within the core respondent group, were looking to be more directly involved in the selling process but were aware of the risks involved.

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I did direct marketing but (it was) not fruitful and I came to know that it is very risky to go for direct marketing without proper market identification and subsequent buyer/end consumer demand; ASLP platform could be helpful in this regard. (Grower 5)

Similarly, as discussed in the previous section, contractors focused on harvesting and dispatching mangoes to the Mandi (wholesale market) as efficiently as possible. While they undertook these operations with little if any appreciation of the impact of their current practices on the quality of the mangoes delivered to the market, they were aware of the need to grade the fruit according to the basic requirements of their customer - the commission agents.

We manage huge supplies on daily basis and organise quality on the basis of size of the fruit (VIP, Super, Special) which is easy to understand by our customers (commission agents) as these standards are established on the basis of size of the fruit….. for decades. (Contractor 1)

Obviously the commission agents were aware of the differing needs of the different market segments and the willingness of some of the wholesalers, exporters and retailers servicing these sectors to pay for fruit that met their needs.

In an open auction, „A‟ „B‟ and „C‟ grade (VIP, Super and special) mango quality were offered to the buyers with different opening prices (more for VIP and less for subsequent grades) because VIP grade are mainly bought by exporters for export purposes. (Commission Agent 2)

Since the majority of contractors were financially tied to specific commission agents, the flow of market information between contractors and commission agents was largely restricted to supply management rather than customer feedback.

We manage our supplies on the basis of our experience and market relations.

(Commission Agent 1)

However the Scoping Study indicated that they could be motivated to change their practices if the price incentives were there (Collins et al. 2006).

…more information and links would change the mango industry look. Good quality mangoes would be increased so market could be better. (Commission Agent 1)

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Domestic retailers sourced their fruit either directly from commission agents or from wholesalers that operated in the market. While this system was effective in clearing supply in the market it did not encourage the exchange of information concerning retailer/consumer preferences.

People are ready to pay high prices for quality mangoes which I graded well after buying from wholesale markets….customers rely on me. (Domestic retailer Karachi Khada Market)

While the growth in superior fruit outlets and the emergence of supermarket chains in the major cities had increased the demand for better quality fruit, including mangoes, the owners of these stores were having difficulty sourcing reliable supplies of consistent quality fruit which, as Mustafa & Mehdi (2007) report, provided a dilemma for them and their customers.

I always come here to purchase some imported fruit because these fruit are not available in the traditional markets. Today I saw good quality mangoes that are good in size, colour and are also fully ripened. I was tempted to buy mangoes from this store.

Normally I do not purchase mangoes from this store due to their high prices as the mango placed for sale here are almost the same quality, available at cheaper price in the outside shops. (A mango buyer at D-Mart Clifton Karachi)

Most of the superior fruit outlets rent out their spaces to specialised suppliers of fruit and vegetables and these suppliers mainly sourced fruit from commission agents as they have little awareness about the quality mango orchards or other sources of mango supplies (Mustafa & Mehdi 2007).

As described in Chapter 1 (page 4) exports of mangoes from Pakistan were less than 5 per cent of total production and that the predominant export markets were the Middle East (mainly UAE) and the United Kingdom. Research conducted in these markets as part of the Scoping Study indicated that the principal target consumer group in both cases was expatriate Pakistanis.

From a market understanding perspective there are two important features of these export chains:

 the importers in these markets were often of Pakistani origin who had long standing close relationships with exporters,

 the expatriate consumers in these markets were familiar with the fruit and had a high preference for it.

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Consequently, the exporters and importers had developed effective logistical systems to manage the variable quality and short shelf life of the fruit to deliver it at a price that was affordable to consumers (Collins et al 2006).

…Pakistani importer did not give good price. Pakistani importer sell product to Pakistani and they did not pay much amount for improved quality. (Exporter 2)

The inconsistent quality of the Pakistan mangoes precluded them from accessing the higher price market segments such as the major retail chains in the UK (Dunne 2007). However, the exporters who were part of the core respondent group indicated that they were interested in exploring opportunities in these higher priced market segments.

We have little information about the exact demand for quality mangoes in our markets…if it is attractive why not we go for that market segment. (Exporter1)

4.2.2 The existing level of KASA with respect to market knowledge

Based on the analysis of the data collected from the core respondents with respect to their market knowledge the following conclusions can be drawn concerning their levels of KASA that underpin traditional marketing practices.

What was immediately obvious was that these marketing practices were supply driven as opposed to being focused on meeting specific consumer needs. For example, as the mango season progressed, growers, middlemen, retailers and exporters were faced with increasing volumes of fruit that was inconsistent in quality and had a short shelf life. As a result, the relatively low price received for the fruit was a reflection of the need to continually clear the fruit coming onto the market on a daily basis.

In general there was no financial incentive for any member of this system to seek or respond to consumer needs.

Growers in the core respondent group expressed a desire to have more information on market opportunities and feedback on their efforts to improve fruit quality. Consequently they expressed interest in being involved in the ASLP marketing activities which included in-market investigations and trial shipments of improved quality fruit. However these growers recognized that they lacked the knowledge, skills and resources necessary to establish direct linkages with retailers – a process they referred to as „self-marketing‟.

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The attitudes and aspirations expressed by contractors, commission agents and exporters in the core respondent group were consistent with their attitudes and aspirations towards improved quality management. The demonstration activities being proposed under the ASLP program were interesting and could offer some benefits but their real focus remained preserving the existing systems which had served them well.