Chapter 1: Conduct market scan

Conducting a market scan is a foundational activity for any agripreneur seeking to position their products and services effectively in Kenya’s competitive agricultural sector. It involves gathering and analyzing information about market conditions, customer preferences, competitors, and trends that influence demand. This chapter equips agripreneurs with the essential terminology and concepts to understand and execute a market scan, enabling informed decision-making that enhances business success and sustainability.

1.1 Definition of terms

Two terms carry the whole outcome: market and market scanning. An agripreneur who understands both knows who may buy, where they buy, what moves their buying and how to watch for changes before they hurt the enterprise. Both terms are defined below, and the sections that follow them show how a scan looks at the market environment, the target market and the competitors.

Market

A market is the meeting of buyers and sellers who exchange a product or service for a price. In marketing the word is also used for the whole group of people and businesses that want a product and can pay for it. A market therefore has four parts: buyers with a need, sellers with something to offer, a price that both accept, and a means of exchange such as cash or mobile money.

Example: a tomato grower's market includes the shoppers at a roadside produce stall, the hotel kitchens that order crates every week and the trader who buys in bulk for resale. Each of these buyers wants something different from the same crop.

Agri-markets can be grouped by what is traded and by how buyers and sellers meet.

• Input markets: sellers supply seed, fertiliser, animal feed, veterinary drugs and tools, for example through input shops and agrovet outlets.
• Produce markets: farmers and traders sell crops, livestock and livestock products such as milk, eggs and meat.
• Service markets: providers sell services such as spraying, ploughing, transport, artificial insemination and produce storage.
• Farm-gate markets: the buyer collects the produce at the farm, so the seller carries no transport cost but has less choice of buyer.
• Open-air and wholesale markets: many sellers and buyers meet in one place and prices move through the day with the quantity on offer.
• Contract and institutional markets: a processor, hotel kitchen or exporter agrees in advance to buy set quantities at a set quality.
• Online markets: buyers order through social media pages, messaging groups or websites and the produce is delivered or collected.

Market scanning

Market scanning is the regular and systematic gathering and study of information about the market outside the enterprise, so that opportunities and threats are noticed early. It looks at customers, competitors, prices, suppliers, rules and trends. A scan is broad and repeated; it is different from a single, narrow research study that answers one question.

Example: the owner of a layer farm writes down egg prices at three produce markets every week, notes when a new competitor starts selling trays at a lower price and records the weeks when hotels order more. After two months the owner sees that prices fall in the weeks after the festive season and plans production to match.

A market scan looks at these areas:

• Demand: what customers buy, how much and how often.
• Prices: what customers pay and how prices move across seasons.
• Competitors: who else sells the same or a similar product and how.
• Supply: how much produce reaches the market and when.
• Rules: licences, standards and taxes that affect the enterprise.
• Trends: changes in tastes, technology and buying habits, such as whether buyers begin to ask for packaged or cleaned vegetables.

The methods of collecting the information are taught under Data collection, and the reasons for scanning under Importance and role of market scanning.

Market environment

The market environment is everything outside the enterprise that affects its ability to sell. A scan checks each part of it.

• Economic factors: incomes, the price of inputs, fuel and transport costs, and how much money buyers have to spend.
• Social and cultural factors: tastes, traditions and lifestyles, for example buyers who prefer indigenous vegetables.
• Technological factors: new farming methods, mobile money and digital tools that change how produce is grown, paid for and advertised.
• Political and legal factors: laws and rules on trade, standards and inputs. The Seeds and Plant Varieties Act, for example, sets rules for certified seed that an input dealer must follow.
• Natural factors: rainfall, drought and pests, which change supply and therefore prices.
• Competitive factors: the number and strength of competing sellers and what they offer.

The market environment shapes decisions. A long dry spell lowers supply and raises prices for vegetable growers, while a new standard for packaging forces a honey producer to change labels.

Target market

A target market is the specific group of buyers that an enterprise chooses to serve with a product or service. It is found by splitting the wider market into groups, called segments, using criteria such as who the buyers are, where they live and how they buy. A dairy farm may choose households that want milk delivered fresh to the gate rather than every milk buyer in the area.

The characteristics that describe a target market include:

• Demographic: age, income, education and household size.
• Geographic: whether buyers are urban or rural and how far they are from the seller.
• Psychographic: values and attitudes, such as buyers who prefer organic produce.
• Behavioural: how often they buy, how loyal they are and how sensitive they are to price or quality.
• Needs and preferences: what they want, for example fresh vegetables every morning for a restaurant kitchen or bulk grain for a miller.

Competitor analysis

Competitor analysis is the part of a scan that studies rival sellers. Its purpose is to learn their strengths, weaknesses and plans so that the enterprise can position itself better. A fish farmer who finds that competitors deliver only twice a week may decide to offer daily delivery.

• Competitor identification: list direct competitors that sell the same product and indirect ones that sell a substitute.
• Product comparison: compare quality, variety, size and special features.
• Pricing: record what rivals charge and any discounts.
• Promotion: note how they advertise and keep customers.
• Position: estimate how many customers they serve and how well known they are.

Chapter Summary

This chapter began by clarifying key terms related to market scanning to establish a strong foundational understanding. It then explored the importance and role of market scanning in identifying opportunities and threats within the agricultural enterprise sector. The discussion moved to data collection methods, emphasizing the need for accurate and relevant information to inform decisions. Sampling techniques were covered next, highlighting how representative subsets of data ensure efficient and reliable market insights. Various tools for data collection were examined, including surveys and interviews, to suit different research contexts. The chapter then focused on data analysis, explaining how raw data is transformed into meaningful information. Measures of central tendency such as mean, median, and mode were introduced as essential statistical tools for summarizing data. Finally, the chapter addressed report writing, outlining how to effectively communicate findings to support strategic marketing decisions.