Market Planning and Market ing What You Pr oduce Duncan M. - - PowerPoint PPT Presentation

Market Planning and Market ing What You Pr oduce

Duncan M. Chembezi & E’licia L. Chaver est

Small Farms Research Center

Roadmap t o Success f or Small Farmers and Ranchers 5t h Nat ional Small Farm Conf erence, Springf ield, I llinois, Sept ember 15-17, 2009

Plan Ahead, Do Your Homework

Small f arms, by nat ure are limit ed resource operat ions t ime, labor, scale, and capit al are limit ing P lanning ahead helps avoid mist akes and wast ing resources P roducers who t ake t he t ime t o develop and f ollow t hrough wit h business and market ing plans have t aken a giant st ep t owards prof it abilit y.

Developing a Business Plan

Keep it simple. You need an out line of why you are in business, your obj ect ives, and how you will get t here. A mission st at ement : purpose of your f arm

• perat ion (1 or 2 sent ences)

A st at ement of goals, obj ect ives, and st rat egies: a snapshot of your f arm

• perat ion (what you want t o do and how you

are going t o do it )

Developing a Business Plan

A product ion plan: det ails t he product ion process on your f arm (be det ailed, include product ion goals, all input s) A f inancial plan: helps t o est imat e how much money you will need (balance sheet , income st at ement , cash) St af f ing and organizat ion plans: det ails who does what , also if out side labor is needed, where t o f ind t hem and what t hey will do in t he operat ion

Management and contingency plans: details what to do when something happens outside your best laid plans (provides some f lexibility) Develop a marketing plan: a critical part and of ten omitted part of the business plan

Developing a Business Plan

Developing a Market ing Plan

A market ing plan should include element s

• f t he f ollowing:

Result s of market research: compet it ors, buyers, suppliers, and t rends Market ing obj ect ives : goals t hat help you mark your way, t ypically short t erm (less t han 2 years), and measurable/ at t ainable St rat egies t o reach obj ect ives: t he process of get t ing your product f rom t he f arm t o t he cust omer (product , price, place, promot ion)

Developing a Market ing Plan

Develop a realist ic budget : est imat e accurat ely t he cost of market ing (planning here helps you t o search out less expensive alt ernat ives Develop an act ion plan: t his is how you are going t o carry out your market ing plan Measure, measure, measure: monit or t he progress of your market ing plan

Market ing St rat egies

Let ’s look at t he 4 P ’s of market ing P roduct : needs t o st andout , why buy your product over someone else’s? P rice: you need t o cover cost s t o make a prof it , you need t o f ind t he right price Place: where you market has much t o do wit h how you market ; pat t ern market ing plan t o f it t he market P romot ion: can mean t he dif f erence bet ween success and f ailure of market ing

Your market has much t o do wit h how you market your product

Market ing Skills- Packaging

P resent ing product : has much t o do wit h market ing t he product Feasibilit y: not needed f or all market s Fancy vs. Basic: should ref lect t he market P reservat ion: can ext end shelf lif e I dent it y: f arm name or logo on product Communicat ion: recipes, inf o t ags, et c.

Piling up produce can help sell it

Paint ed basket s can help t oo.

Direct Market ing

When a f armer sells commodit ies in a t radit ional market place t he main concer ns ar e pr oducing t he cr op, selling it f or a good pr ice, and t hen get t ing paid. I n direct market ing f armers have t hese same concerns plus t he added responsibilit y of market ing.

Direct Market ing

P rof it s: pot ent ially higher Cash f low: cust omer pays you direct ly Market ing cont rol: can produce what you want and set your own prof it s Diversit y: works well wit h small f arms

Direct Market ing

Volume: less product is usually sold t han wit h ot her market ing vent ures Time: requires more of a t ime commit ment P eople skills: you are dealing direct ly wit h people (need t o always wear a happy f ace) Market ing skills: it s compet it ive, you are going t o have t o sell your product

When it comes to marketing When it comes to marketing strategies, there is no strategies, there is no substitute f or having a substitute f or having a good, quality product. good, quality product.

Your reputation as a producer Your reputation as a producer depends on the quality of your depends on the quality of your product. product.

Farmers Market s

Fast est growing f orm of direct market ing Preparat ion: requires lit t le preparat ion by producer; public enj oys convenience St art up: minimal cost s and market ing skills are needed Direct int eract ion: best f eat ure is cont act bet ween cust omer and producer Weat her: at it s mercy f or rain, heat , & cold

Farmers Market

Comf ort : you are out in t he weat her all day Time: you will spend t he bet t er part of a day at t he market Direct compet it ion: compet ing producers are all t oget her in a small area Regulat ions/ policies: you have t o be able t o f ollow rules set by market management

Farmers Market s require a day’s commit ment out doors

Pick-Your-Own

Has long been a successf ul direct market ing vent ure

Cust omer pays t o pick: if it was j ust t hat simple, ever yone would be doing it Cost reduct ion: biggest advant age (t ransport at ion, handling, st orage), labor f or harvest ing is of f set by t he cost of people movers Cust omers buy more: PYO pickers t ypically purchase more t han ot her market s Lack of privacy: you are allowing t he public on your f arm

Pick-Your-Own

Liabilit y I nsurance: insurance companies get “t wit chy” about PYO and having people roaming your f arm Damaged crops: cust omers and t heir kids will pick-

• ver and damage crops

Bad weat her: will chase away cust omers; t his can be a problem wit h limit ed season crops Labor cost s: need cashier s and people mover s P rice: PYO pr ices ar e of t en lower ; cust omer s expect compensat ion f or t heir labors

Roadside Market s

At t ract ing repeat cust omers: t his is key t o t he long t erm success of your market Save cost s: t here is cost savings in t ransport at ion, packaging, and middlemen “Cat chy” signs/ displays: are necessary f or at t ract ing cust omers t o st op at t he st and Overhead cost s: are higher due t o t he f acilit ies

Roadside St ands should look neat and clean wit h f resh, ripe produce

The appearance of your f acilit ies and grounds ref lect

• n your management skills.

Roadside Market s

P lanning and Zoning: government red t ape Locat ion: key t o success (needs t o be near enough t o main roads t o at t ract cust omers and repeat ers Facilit ies and buildings: f irst t hing people see of your market (you want t o put t he best possible look on your st and)

Communit y Support ed Agricult ure

CSA’s are new, f ast -growing direct market ing vent ure Members purchase shares of t he f arm’s harvest and accept product ion risks As t he crop mat ures, it is harvest ed and divided up among shareholders Shareholders get a f resh supply of produce and support local agricult ure (urban-rural linkage)

Communit y Support ed Agricult ure

Shareholders have input int o what is grown, variet ies, and how it is grown Fees are paid in advance, t his guarant ees t he f armer a market f or everyt hing produced, t he crop is sold bef ore it is plant ed Advanced payment creat es working capit al f or t he f arm operat ion

Communit y Support ed Agricult ure

CSA’s allow bet t er of f -season plant ing CSA’s help t o spread out risks, everyone shares in t he good and bad t imes Shareholders sign a cont ract acknowledging t he risks t o ant icipat ed yields CSA’s have reduced labor cost s (cust omers help wit h product ion)

Wholesale Market ing

Direct market ing is not f or everyone P rof it s: selling direct ly t o t he ret ailer, bypassing t he middleman, is best P roduct ident it y: you can develop your own logo or packaging t o enhance t he product Opport unit ies: t hey are out t here, if you are int erest ed (specialt y crops) Specialt y crops: ret ailers are especially int erest ed in crops not produced by t he larger f arms

Wholesale market ing requires you t o t ransport your product t o t he ret ailer.

Wholesale Market ing

Transport at ion cost s: you will have t o deliver your product t o t he ret ailer Special handling and grading: some r et ailer s have part icular requirement s and st andards f or pr oduct s; t hese var y by r et ailer Special packaging: some r et ailer s ar e ver y “picky” about how you deliver product Limit ed diver sit y: less diver sit y is r isky Pooled pr oduct ion: small f armers will need t o work t oget her t o meet product ion demands

Wholesale Market ing

Selling t o Rest aurant s

Comf ort able Market ing: you will develop relat ionships wit h chef s and ot hers Consist ent income: price is est ablished f or t he season Fr equent deliver ies: lack of st orage at rest aurant s may require more t ransport at ion Liabilit y: a law suit on a rest aurant could reach you if your pr oduct was involved Out of business: t he t urnover is high in t he r est aur ant business, so be car ef ul

Wholesale Market ing

P roducer responsibilit ies t o ret ailer Ret ailer’s reput at ion: it ’s on t he line wit h your product Be reliable: ret ailer needs t o count on you Consist ency: deliver a consist ent ly high qualit y product f or t he ret ailer t o sell Time: be on t ime wit h deliveries

Advert ising and Promot ing

Mission: At t ract Cust omers First ident if y what kind of business you are, who your cust omers are, and what you are going t o provide. You will need an image t hat f it s your personalit y. You will need a promot ional campaign t hat you are sure t hat you can live up t o and f ulf ill t he promot ion ads.

Signs help wit h market ing

Attractively displayed produce will draw customers Attractively displayed produce will draw customers to your stand at farmers markets. Unusual and to your stand at farmers markets. Unusual and uncommon items such as red raspberries and cut uncommon items such as red raspberries and cut flowers will also attract customers to you, who will flowers will also attract customers to you, who will buy other items from you while they are there. buy other items from you while they are there.

Advert ising and Promot ing

Develop a promot ional plan

Obj ect ive: what do you want t o accomplish? “measur able” (incr ease sales by 10%, 15% mor e cust omers, et c. Message: t o be conveyed in campaign Audience: who do you want t o hear your message St rat egy: how ar e you going t o deliver your message? I ncludes public r elat ions, ads, news r eleases Budget : what will it cost t o get your message out ?

Pricing

Dif f icult : price received needs t o cover your cost s and ret urn a prof it Compet it ion: t op of list (need t o be compet it ively priced unless you can show a dif f erence) Qualit y: import ant (a premium price commands a qualit y product ), of t en a high price inf ers qualit y

Pricing

Specialt y product s Specialt y product s: limit ed supply, : limit ed supply,

• r
• r compet it ion helps set price

compet it ion helps set price Percept ion Percept ion: low prices may inf er t hat your : low prices may inf er t hat your business sells inf er ior pr oduct s business sells inf er ior pr oduct s Locat ion Locat ion: cust omer s will pay f or convenience : cust omer s will pay f or convenience Time of Year Time of Year : early bird get s t he worm : early bird get s t he worm Cust omer accept ance Cust omer accept ance: ult imat e t est f or pricing : ult imat e t est f or pricing Know t he break Know t he break-even price even price: t his is t he price t hat : t his is t he price t hat covers your cost s; remember t hat you are in covers your cost s; remember t hat you are in business t o make money business t o make money

Cust omer Service

Farm Business: success will depend largely on how you t reat your cust omers Cust omer service: reduces loss of current cust omers, gains new ones, and makes current ones happier Dat a: shows t hat caring about cust omers can reduce t he number of lost cust omers by t wo-t hirds

Cust omer Service

Basic building blocks of cust omer service: Find out what cust omer want s or needs Build a relat ionship wit h your cust omers Always help your cust omers Always keep work area neat and clean Recognize cust omers at once

Cust omer Service

Some more cust omer building blocks Tell cust omers what you can do, not what you cannot do Angry cust omers should always be handled wit h care The owner/ operat or should always set t he example f or cust omer relat ions All employees should be f amiliar wit h t he cust omer service policy of t he business Remember t he cust omer is always right

Cust omer Service

2 The r easons why cust omer s leave: 1% die 3% move away 5% shop where f riends work 9% compet it ive r easons 14% product dissat isf act ion 68% indif f erent at t it ude of st af f 96% of unhappy cust omers will not complain, reasons why: 1- usually don’t get r esult s 2- t hink you don’t want t o hear complaint s 3- f or every complaint , 24 do not complain

Customer Service Customer Service

2 Dissatisf ied customers can ruin your Dissatisf ied customers can ruin your business business Unhappy customers will relay their Unhappy customers will relay their unhappiness to 9 or 10 of their f riends unhappiness to 9 or 10 of their f riends Usually, 12% tell more than 20 people Usually, 12% tell more than 20 people 30% will stop buying your product 30% will stop buying your product

Cust omer Service

Be t hankf ul f or complaining cust omers They alert you t o problems you missed Most can be t urned loyal again 95% will remain good cust omers if you act quickly t o resolve t he problem Once t he problem is solved, t hey will t ell 4

• r 5 f riends about t heir experience

I t is est imat ed t hat it cost s 5 t imes more t o get a new cust omer t han t o t ry t o keep an exist ing one

Cust omer Service

Common ways cust omers are of f ended Failure t o acknowledge t heir presence Not list ening at t ent ively Not knowing t he merchandise Being verbally abusive Shoddy work Arguing wit h t hem Failure t o keep your word P

• licies are not enf orced

Thank You. Any Questions?