Marketing Analysis: Biofuel Demand Hits Food

The article “Bio-fuel demand hits food” in The Australian on 21st July 2006 shows how the changing natural environment is the effecting the demand for food as well as how marketers analyze the macro environment to benefit a firm.

There is an apparent shortage of raw materials (crops) available to food producers. If raw materials are not properly utilized, it could be a major problem to the world’s economy. This is due to the fact that only certain amounts of land are arable or fit for cultivation (Kotler. P, Keller. KL2002, page 86) and a lot of the crops are being utilized in the bio-fuel industry. As there are concerns over the rising oil prices, governments have begun to seek alternative sources of energy, one of which is bio-fuel. According to Wikipedia; the free encyclopedia, the rising prices of crops have enticed many farmers to produce crops specifically for use as bio-fuels. This in turn would reduce available crops to be used by food producers. Therefore, there has to be efficient management in resources before the problem gets out of hand. The shortage of resources is also a common trend seen today in the fast changing world.

Marketers are quick to recognize the rising cost of energy to run food companies and thus have to resort to cutting cost. In this example; Heinz, a manufacturer of ketchup has considered using thinner plastic packaging to cover the cost of rising raw materials (Heinz uses tomatoes to produce ketchup). This reduce cost would enable Heinz to continue producing ketchup for consumers. Heinz also resorts to standardization of products so that production cost could be kept low. Standardized products also have the benefit that customers would recognize a particular product that