Developing a Marketing Plan for Specialty Crops Wen-fei Uva Dept. of Applied Economics and Management Cornell University Modified by Georgia Agriculture Education Curriculum Office June, 2001

Past Growers and manufacturers created a product and then tried to sell it - A Supply Push Strategy Today Successful businesses are market-driven, Provide what the customer wants & needs - A Demand Pull Strategy Future Mega Players, Niche Players, and Former Players

Max Brunk (1983) Marketing is Not Just Selling! To Market is to Create Value; To Offer a Product or Service Which Someone is Willing to Pay. The Key is

Five Steps of Developing a Marketing Plan 1. Strategic planning to identify marketing opportunities 2. Target only the segments that you can satisfy in a superior way 3. Develop a marketing mix (4 Ps) to support the product’s positioning 4. Implementing the marketing strategy 5. Control phase

Strategies you will utilize to achieve your goals. Budget Calendar Responsibilities Deadlines List of tools Media List Events / Activities A Marketing Plan is a Road Map Products PricePlace Promotion Target Market

Characteristics of Strategic Planning - Identify Marketing Opportunities Looks at the “Big Picture” Leads to Changes Considers Environmental Forces in the Industry Anticipates the Reactions of Competitors Looks at a “Longer” Time Horizon A Written Plan

Determine Your Target Markets  Can’t be all things to all people  Limited personal and business resources  Choose 1 to 2 market segments to focus marketing effort It is not necessarily the current customers Which consumer or business segment is the most desirable and profitable Which segment you have a competitive edge

Questions to Determine Target Markets Is the segment attractive?  profitable and with growth potential Who are the competitors in that segment? Do you have a competitive advantage in that segment? Is the competitive advantage sustainable? Can competition easily enter the market to get a “piece of the action”? Where is the future market?

Be the Best at One of the Three Areas The Best Product The Best Total Costs –Lower price –Help customers reduce total costs The Best Total Solution/Best Value Provider –More benefits, customerizing, convenience, fast service, extra guarantee Positioning for a Competitive Edge

Developing Marketing Strategies Be UniqueDifferentiation - Be Unique –Supply something in short supply –Supply existing products or services in a superior way - better quality, adding value & services –Supply a new product or service - product design, new variety, color, shape, organic –Branding Vertically/Horizontal Integration - grower/shipper, direct marketing, cooperative, alliance Identify New Markets - niche markets, new buyers Reduce Risks - diversification, buying insurance, self- insurance, contract pricing

Determine Your Product genericAgricultural products and services are often generic. DifferentiateDifferentiate your products/service is the ONLY way to enhance sales and prices. Give your customer a REASON to buy your products

What are your products and services? What are the benefits of your products and services? What makes them different from your competitors’ products and services? Are they compatible with the existing product mix? Questions help you to determine the product strategies

Physical Characteristics: features, performance, durability, packaging Availability: stores, by phone, fax or internet Service: delivery, installation, training, maintenance, repair Image: symbol, event, media Price: very high to very low Five Basic Ways to Differentiate Your Product How About Quality and Customer Satisfaction?

Pricing Questions How much do your competitors charge? How much are customers willing to pay? Does your product have additional value for which price may be raised? If you slash prices (below competition), how will you maintain profitability? What is your cost to produce the product?What is your cost to produce the product?

Profit Costs and Revenue Variable Costs Fixed Costs Price (Revenue) Contribution Break-even Shut-Down Point

Lowest Price Having the “Lowest Price” in the town image can’t get you higher prices for higher quality. Remember VALUE Having a “VALUE” image = Quality + Service + Information + Price

Wholesale channels –through a wholesaler, terminal markets –through a retailer, food service –through a processor –marketing cooperatives Direct-to-consumer channels –Home-based shopping: e-commerce, mail order –Store-based shopping –CSA, U-pick –Businesses Select Place/Distribution Strategies Depend on the target market’s needs, and where you have a competitive edge. Know Your Customers’ Needs and Wants

Five Promotion Tools Advertising –The medium will reach the target audience –The medium is appropriate for the message conveyed Sales Promotion Activities –Coupons, in-store displays, trade shows, samples, in- store demonstrations, and contests. –To supplement and coordinate efforts in the advertising and personal selling efforts. Public Relations –Publicity is uses non-paid communication presented by the media. Create an image. –A broad effort to influence public’s attitudes toward the firm or it’s products. - Create an image. Sales Personnel & Direct Marketing

Who is the target? The role of promotion $Provide product information $Stimulate demand $Differentiate products & build a brand image $Remind current customers about product benefits $Counter competitors $Respond to the news $Smooth out seasonal demand fluctuation Multi-media approach Which Promotion Strategy to Use? Be Small But Don’t Have to Look Small

Implementing and Control Phase Determine Goals & Objectives –What is it we want to achieve? - This year? Over the next 3 years? –Measurable and quantifiable –How reasonable are those goals? –Don’t set yourself up to fail! Budgeting Action Plan: –Who is responsible? –What tasks are they responsible for? –When the tasks are to be completed? Monitor, Evaluate, and Revise the Plan

PLAN BEFORE YOU PLANT! Minimize Risks, Maximize Profit, & Ensure Success Thank you!