|Principles of Wool Marketing
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|Wool Marketing has been constructed to highlight the issues facing wool as a fibre in an intensely competitive global apparel textile market. The unit has an applied orientation and has been designed to provide Rural Science students and non-economists with a basic understanding of economic and marketing principles, the global fibre textile market, the retail environment, wool promotion, market outlook and price formation, wool selling options, price risk management, research and development and new wool marketing developments.
|The Wool Marketing theme covers all aspects of wool marketing from an introduction to the subject through to economic and marketing principles, the global fibre textile market, the retail environment, wool promotion, research and development, price risk management and the latest developments in the marketing of Australian wool.
|Introduction to Wool Marketing
|The subject of Wool Marketing is introduced and the structure of the main wool industry institutions outlined.
|Introduction to Wool Marketing
|This module introduces the subject of Wool Marketing.
|Wool Industry Institutions
|This module outlines the structure of the main wool industry institutions in Australia and the world.
Since this module was prepared this structure has changed in some areas.
|Modules in this topic cover the economic principles of wool marketing. Principles such as macro-economics, price stabilisation, global trade restrictions and government intervention are examined.
|Economic Principles of Wool Marketing
|This module examines some of the important economic principles operating in the global wool market. The module compares wool to other agricultural products in terms of the nature of the product and the structure of the market. Equilibrium price, the concept of elasticity, shifters of supply and demand, marketing margins and price volatility are also covered. Other modules cover principles such as derived demand, price stabilisation, “free-rider”, “market failure”, macroeconomics and value adding.
|Macro-economics and the Wool Market
|This module looks at how macroecomic issues such as exchange rates and interest rates affect the wool industry. World events and technological change are also covered.
|Government Intervention in Markets
|Government intervention in the wool industry has a long history. This module looks at the why and how of government intervention.
|This module explains the “free-rider” principle” and its significance to the wool industry.
|Global Trade Restrictions in Apparel Textiles
|This module examines trade restrictions in the global textile market. It looks at the implications of these restrictions for the wool industry.
|Price Stabilisation Schemes
|Agricultural product prices are inherently volatile due to their demand and supply responses being inelastic. This module looks at how stabilisation of price and incomes can be attempted in the production of agricultural products.
|The Reserve Price Scheme
|This module looks at the Reserve Price Scheme (RPS), a particular price stabilisation scheme for the wool industry between 1971 and 1991. The history of the scheme is detailed, as is the importance of its legacy to the wool industry today.
|The Reserve Price Scheme
|This module provides an insight into the adoption of prediction at G.H. Michell & Sons Pty. Ltd. This top-maker is based in South Australia, but supplies tops to the world made from Australian wool.
|Cost, Prices and Technology Adoption
|This module examines the struggle between costs to produce agricultural products and the prices producers receive for them, and what producers can do about it.
EDITOR”S NOTE: This module is missing
|Concepts and fundamental principles involved in the marketing of wool are presented. The marketing of agricultural products and manufactured goods are contrasted and the measurement of marketing performance assessed. Quality assurance and management, marketing choices, marketing costs and supply chain management are all covered in some detail.
|This module presents a number of scenarios that could be applied to define the principles of Wool Marketing. This module contrasts the marketing of agricultural and manufactured products. The inclusion of the means of the production in the consideration of agricultural marketing can be a confusing factor in this comparison. However, this shouldn’t be the case. Other related modules deal with the measurement of marketing performance (market share, price premium, sales volume), government intervention in markets, product cycles.
|Measurement of Marketing Performance
|This module assesses four ways, market share, price premiums, real price and total consumption, that may be used to measure the long-term performance of the marketing function.
|This module looks at the fibre market, and reviews some principles and developments in this market. More information about fibre consumption can be found in the module, “The Global Fibre Market”.
|Value Adding and ‘Adding Value’
|This module examines the more traditional concept of value-adding, and the more recent development, adding value.
|Supply Chain Management
|This module briefly looks at the fundamentals of supply chain management, the benefits of supply chain management and gives some examples of successful supply chain management in the wool industry. Some of these examples, such as Fibre Direct, Woolaby, and Homestead Grazing Co. Ltd. are covered in other relevant modules.
|Quality Assurance and Quality Management
|This module looks at the concepts involved in the area of quality assurance and quality management, and how those concepts are applied in the wool industry. Some of the questions addressed are:
|Raw Wool Marketing Choices
|This module examines the marketing choices between growers and buyers. It compares those choices based on the factors which influence marketing choice.
|Raw Wool Marketing Costs
|This module presents some of the publicly available information on marketing costs for Australian raw wool. Marketing costs in this sense are usually defined as delivery costs from the producer to the mill door.
|Global View of the Apparel Fibre Market
|The Australian wool textile industry is presented in a global perspective. The global fibre market is discussed and the impact of the global wool trade on Australian wool exports is examined. The role of measurement in wool trading and the future of the Australian wool textile industry are explored.
|Textiles & Apparel in the Global Economy
|This modules looks at recent developments in textiles and apparel in the context of the global economy.
|The Global Fibre Market
|This module contains figures and graphs relating to the global consumption of the main fibre types.
|Global Wool Trade
|This module discusses the impact of the global wool trade on Australian wool exports. Markets for Australian wool are examined from the perspective of both processor and consumer markets. This module also examines some of the factors which affect the competitiveness of wool fibre in the global market
|Wool Trading: The Role of Appraisal and Objective Measurement
|This module will explore some of the latest developments in trading that are related to appraisal and the development of the objective measurement of raw wool properties.
|The Future of the Australian Wool Textile Industry
|This module discusses the viability and possible future for an Australian wool textile industry.
|Modules in this topic give an overview of the wool growing industry in terms of wool supply. A profile is presented of wool growing enterprises in Australia and a comparison between these and other broadacre industries is made. Stockpiles and their affect on the Australian wool industry are looked at and the significance of wool supply forecasting is explained.
|The Australian Wool Industry (Broadacre & Profile)
|This module looks at some of the developments in land usage and performance measurement for woolgrowing enterprises compared to other broadacre industries. An Excel file is included with this module (MKTG-100-250-050.xls). Pages from this spreadsheet are referred to as Appendices in this module.
|Stockpiles in the Wool Industry
|There are stockpiles throughout the wool industry. Stockpiles affect wool supply, raw wool price, increase marketing costs, impact on risk management and marketing decisions, and impact on the clothing cycle. This module looks at questions like:
|Wool Supply Forecasting
|This module is about how wool supply is forecast and the significance of the forecast.
|Demand for Australian Wool
|Customer and consumer preferences impact on demand for Australian wool. The principle of derived demand is also explained.
|This module explains derived demand for raw wool.
|Customer Preferences (Topmaker & Spinner)
|The ultimate demand for a product lies with the consumers of that product. Their preferences and ability to buy at any one time will influence the demand for that product. In the case of wool apparel products such things as season, fashion and economic security play an important role in customer demand. This module addresses the demands placed on an Australian topmaker in today’s competitive environment.
|This module looks at some of the research that has been conducted to determine consumer preferences in apparel textiles.
|The principles of promotion, and issues for wool promotion such as the success of promotion, the impact of advertising and cost of wool promotion are addressed in this topic. Overviews of wool research and development, new product development and wool promotional strategies are also presented.
|The Principles of Promotion
|This module examines the concept of promotion and product categorisation and where wool sits in the framework for successful promotion. It also looks at marketing expenditure in regard to wool Research & Development and promotion over the years.
|Issues for Wool Promotion
|This module looks at some issues important in the debate about wool promotion, including the success of promotion, the impact of advertising, the cost of wool promotion over the years and who should pay the costs in the future.
|Wool Research and Development
|This module examines some of the principles of successful research and development (R&D) and how these have been applied in the fibre market. This module should be used with the “New Product Development” module.
|New Product Development
|This module gives an overview of product life cycles and their significance. Related marketing subjects would be Product Mix, Product Strategy and Product Management. Unfortunately, these are outside the range of this series of modules.
|Wool Promotion Strategies
|This module looks at some of the strategies that have been used to promote wool in the 1990’s and are proposed into the 2000’s. The promotion of cotton is covered briefly. Some other vital issues concerning wool promotion are canvassed in the module “Issues for Wool Promotion”, including expenditure and returns for promotion.
|Wool growing as a business
|A market outlook allows formation of strategies that can be implemented to improve wool growing productivity and profitability. Calculation of cost of production (CoP) and its use as a valuable management and marketing tool is described.
|This module looks at the drivers of demand and supply in the fibre market, and how a market outlook might be formed from the available information. The outlook bias is to the medium to long-term, although some short-term analysis concepts are included. Market information sources are also included in this module.
|Costs of Production (CoP)
Knowing the cost of producing a kilogram of wool has two important values :
This module describes how to calculate the cost of wool production and how it can be used as a valuable management and marketing tool.
|Wool Growing Productivity:putting theory into practice
|This module looks at strategies that can be implemented to improve wool growing productivity. Factors that affect cost of production are discussed and an example given of putting theory into practise. The adopted technologies are simple and proven.
|Price Risk Management
|This topic contains a set of modules that cover price risk management strategies that can be implemented by woolgrowers. These include Forward Contracts, Futures, and Options. Examples of how these strategies can be utilised are included. A module looking at the cotton market and price risk management is also included for comparison purposes.
|Price Risk Management
|This module introduces the subject of price risk management (PRM) for woolgrowers. The complete set of modules found within the PRM topic covers forward contracts, futures, options, and finally looks at some price risk management strategies.
|This module looks at how a forward contract is set up, the pitfalls, and some strategies a seller might adopt when entering such a contract.
|Exchange Traded Forward Contracts (Futures Contracts)
|This module examines futures contracts, as traded in the Futures Exchange, and also Over-the-Counter (OTC) products. It is recommended that the modules “Price Risk Management” and “Forward Contracts” are examined before this one.
|Your Own Floor Price Scheme (Options)
This module examines the use of options, which could be viewed as your own floor price scheme. It is recommended that the modules, “Price Risk Management”, “Forward Contracts”, and “Futures” are viewed before this module
Woolgrowers interested in using futures or options should either:
|Price Risk Management Strategies
|This module is provided as an example of various “real life” scenarios that woolgrowers may face, and how they may go about dealing with their price risk in each scenario. It is important to note that there is usually more than one solution.
|Price Risk Management Exercises
|This module provides some exercises that could be conducted in conjunction with the modules, “Forward Contracts”, “Futures”.
|The Cotton Market & PRM
|The cotton industry is one of the youngest agricultural industries in Australia but one of the most mature from a modern risk management and marketing perspective. This modules looks at the Australian cotton industry, its place in the global cotton market and the price risk management techniques used by that industry to market their product. Volatility comparisons between the cotton industry and the Australian wool industry are also examined.
|Latest Developments in Wool Marketing
|New strategies for the marketing of Australian wool are discussed and some examples are provided of recently implemented schemes.
This module is about the Fibre Direct system for effecting the transfer of wool from the woolgrower to the spinner. The system is currently aimed at the finer sector of the market, but it can be used for other sectors.
“Large firms usually have the resources to develop and implement technologies that often come from smaller firms. The recent acquisition of Fibre Direct by Wesfarmers Dalgety is a case in point.”
This quote provides some background to the development and adoption of Fibre Direct.
|Niche Marketing: The Woolaby Experience
|This module is a glimpse at how an Australian garment company is successfully selling wool following niche marketing strategies.
|New Marketing Strategies
Over recent decades, the global textile fibre market has changed rapidly. Largely, these changes have been brought about by changes to consumer preferences, continuing rapid expansion of the world population, emergence of new consumer markets, and increasingly intense competition between the major apparel fibres. As supplier of an historically important textile fibre, the wool industry has been forced to change with the changing circumstances, and new marketing strategies may be required for survival of the wool industry in the new millennium.
This module discusses some aspects of this changing market environment and examines one example of a new marketing strategy recently implemented.
|Summary of Wool Marketing
|The module contained in this topic analyses the 1999 Wool Future Directions Taskforce recommendations in relation to the principles and strategies contained in the subject “Wool Marketing”.
|Future Directions Taskforce Report
This module analyses the recent Wool Future Directions Taskforce recommendations based on an Action Framework developed from the marketing principles pursued in this series of modules.
Copies of Volume 1 and Volume 2 of the Taskforce Report can be accessed using the links provided.