1: Beginning Market Research
The success or failure of your venture will be measured by how well you cater to the needs and desires of your customers. Performing market research will assist you in identifying your primary and secondary target markets. Following that, you will use that information to develop a marketing strategy that will effectively serve those markets. Keep in mind that while market research and development of a marketing strategy are discussed individually, truly, you never really end your market research and are ideally continually updating and adjusting your marketing strategy based on your most recent research.
The thought of performing all the needed market research on your own can be overwhelming. However, there are numerous resources available for you to draw upon that keep up to date on information you may want, such as market/product and consumer trends. The Penn State Extension Ag Entrepreneurship blog often features articles that discuss trending products that farm and food business owners may be interested in. USDA Agricultural Marketing Service (AMS) is dedicated to providing market research and assistance to US agricultural producers. AMS offers a wide range of ag marketing information from information on milk marketing orders to finding a farmers’ market. Information on the National Organic Program (NOP) can also be found on the AMS site. The Ag Marketing Resource Center is an electronic, national resource for producers interested in value-added agriculture. Browse commodities and products, investigate market and industry trends, study business creation and operation, read research results and locate value-added resources.
For guidance in the development of marketing strategies and a marketing plan, there are also several sites to refer to. Both Penn State Extension Farm and Food Business and the Center for Profitable Agriculture with University of Tennessee Extension are information sources with an emphasis on developing value-added agricultural ventures and marketing concepts.
The marketing strategy is determined by the 4 Ps of marketing - product, price, place, and promotion. For each product, you should be prepared to describe it's characteristics relative to each "P." Whether you decide to pursue commodity, retail marketing, or a combination, Penn State Extension Farm and Food Business Marketing has a collection of resources to assist.
Briefly, "product" refers to a description of the product or service that you are marketing and selling to the customer. You should also be able to detail the features and benefits the product/service offers the customer.
While seemingly straightforward, there is an art to product pricing. Not only do you need to know and understand the cost of production for your product, but you'll need to determine how individual product prices can determine how customers view the product and it's place in the larger marketplace.
The third P, place, addresses the market channel and outlets that will be used to get your product to the customer. You will need to investigate distribution options and requirements such as self-distribution or the use of packers or brokers. In addition, you have numerous market outlets to consider that can be classified as either direct or wholesale markets. With each there are advantages and disadvantages to your specific business situation. Iowa State has a publication on Evaluating Marketing Outlets Using Whole-Farm Records that discusses using whole-farm records to determine markets.
The final "P" is promotion. Commonly mistaken as solely advertising, promotion encompasses much more; from advertising to networking to public relations. Promotion is everything your do to make your business and products known with the goals of both promoting goodwill and repeat sales.
The information you gather and compile during market research and your resulting marketing strategy should all be brought together into a marketing plan, an integral piece of business plan. Guidance on, and templates for, the development of a marketing plan can be found several places. Two to highlight are the Kansas State marketing plan template and this article on Developing a Marketing Plan from the U.S. Small Business Administration.