Beginning Market Research
Conducting market research will help you identify your primary and secondary target markets. Following that, you will use the information to develop a marketing strategy that effectively serves those markets. Keep in mind that while market research and the development of a marketing strategy are discussed individually, in reality, you never truly end your market research and are ideally continually updating and adjusting your marketing strategy based on your most recent research findings.
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 you up to date on information you may want, such as market/product and consumer trends. 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 on developing marketing strategies and a marketing plan, several websites are also available for reference. Both Penn State Extension Business Management and the Center for Profitable Agriculture with the 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 its 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 also need to determine how individual product prices influence how customers perceive the product and its place in the broader 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. Additionally, you have numerous market outlets to consider, which can be classified as either direct or wholesale markets. With each, there are advantages and disadvantages that are specific to your business situation. Iowa State has a publication titled "Evaluating Marketing Outlets Using Whole-Farm Records," which discusses the use of 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 encompasses everything you do to make your business and products known, with the goals of promoting goodwill and generating 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 the business plan. Guidance on, and templates for, the development of a marketing plan can be found in 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.
