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Marketing

The information here just touches on a few of the basics to give you a flavor of the mindset changes that need to take place when moving from "selling a commodity" to "marketing your product".

Fresh market vegetable grown in the field or in High Tunnels are usually available in many parts of Pennsylvania from the end of February through the end of November. They traditionally are sold in specific (weight or volume) cardboard boxes or plastic containers. Five basic marketing alternatives are available to the vegetable and small fruit grower: wholesale marketing, cooperatives, local retailers, roadside stands, and pick-your-own operations.

In wholesale marketing, producers often contract with shippers to market and ship the cucumbers for a predetermined price. If you do not use a contractor and ship your own crops to a wholesale market yourself, your product will be subject to the greatest price fluctuations. Marketing cooperatives generally use a daily pooled cost and price, which spreads price fluctuations over all participating producers. Local retailers are another possible market, but you must take the time to contact produce managers and provide good-quality horticultural crops when stores require them. Roadside stands (either your own or another grower's) and pick-your-own operations provide opportunities to receive higher than wholesale prices for your horticultural crops, but you may have some additional expenses for advertising, building and maintaining a facility, and providing service to your customers. With pick-your-own operations, you save on harvest costs, but you must be willing to accept some waste. Depending on your location, processors may or may not be a marketing option. Processors are less likely to contract with small-acreage growers (those with less than 5 acres).

STEPS TO MARKETING YOUR PRODUCT

The concept of marketing a product directly to the consumer can be an intimidating and entirely different process to most producers who have very little experience with this marketing method. The marketing plan must begin early as you determine what you are going to produce. You are no longer selling your product on the open market. You need to focus on what are your customer needs and how you will deliver a product that the customer wants.

Complete a market analysis

This step is the research phase that will help you determine the opportunities and challenges for your product. Many good products fail because the market analysis step was either overlooked or not extensive enough? Some of these products are later successful for other entrepreneurs due to sufficient market analysis. This step is where you define the target market at which you will focus your marketing efforts. It is where you need to find answers to lots of questions. Some of which are:

  • What is the market potential for organic strawberries (your product) in the area?
  • How fast is the fee hunting (your product) market growing?
  • What does your typical customer look like?
  • Where are your customers located?

Demographic data and psychographic data help identify the target market. Demographic data indicate the location, age, income level, spending habits and family composition of the potential customer. Psychographic data deal with their hobbies, beliefs and lifestyles. Using this type of information helps determine the marketing strategies of price, promotion and placement. Another important part of the market analysis is the competitive analysis. This is where you identify your competition and determine their strengths and weaknesses. You determine if the market is already saturated. It helps you identify what it is about what you offer that is better than the competition. The competitive analysis will provide you with information to help you produce a better product so it will have a greater chance for success in the marketplace.

Develop a marketing strategy

The marketing strategy is that part of the planning process where you determine the action steps to overcome the challenges identified in the market analysis. Here you build on the 4 P's of marketing: Product, Price, Promotion and Placement.

Product

All information regarding your product must be familiar to you. The benefits,features and unique characteristics that set it apart from the competition. To help the consumer identify with your product you may want to use a catchy name so that it is easily remembered by the consumer.

Price

Pricing a product is a new concept for a former commodity producer. Most are used to being a price taker or in other words getting told the price they receive for their product. Now you are the price maker. When you market your product, it is now up to you to determine the asking price. You must price your product at an amount high enough to generate a profit including total production/marketing costs . However, you must also make the price attractive enough to encourage customers and generate sales. Pricing is an art, not a science. You must be constantly alert to changes in the marketplace and changes in your business that could signal a need to adjust the product price.

Promotion

Everything you do with your customer to encourage them to purchase your product is promotion. It is not merely advertising but includes public relations and networking. One way of encouraging consumers to purchase your product (if it is a food item) is to provide easy to make, appetizing recipes. You can network with your customers at point of purchase locations by offering samples of your food product. The whole concept of promotion is to catch and hold the public's attention and get them to buy your product. The Internet has created another avenue for promotion and more questions to answer like: Are you going to develop a web site? What search engines are you going to register with? Are you going to cross link with other related web pages?

Placement

Getting your product to the customer when and where they want it is placement. This is often referred to as distribution. Distribution often represents 15% to 50% of the final price of the product. Often businesses do not have the resources to individually deliver the product to the customer. They must therefore rely on an established distribution channels made up of retailers, wholesalers, distributors, agents, brokers or cooperatives. You must determine the distribution partner that best fills your needs and your customer's needs. Some non-traditional distribution channels are: u-pick operations, farmers markets, classified ads, consignment selling, community- Many books have been written on marketing strategy. The information here just touches on a few of the basics to give you a flavor of the mindset changes that need to take place when moving from "selling a commodity" to "marketing your product".