How to Niche Market Aquaculture Products LaDon Swann Mississippi-Alabama Sea Grant Consortium Auburn University LaDon Swann Mississippi-Alabama Sea Grant Consortium Auburn University

In the many areas there are No well established markets for aquaculture products like there are for other agriculture products

You MUST know where you your product will be sold before you stock your first animal.

We Will Discuss Selecting a speciesSelecting a species Product formProduct form PricePrice PromotionPromotion PlacePlace Selecting a speciesSelecting a species Product formProduct form PricePrice PromotionPromotion PlacePlace

MarketingMarketing ProductionProduction

Develop a Budget Compare marketing costs against anticipated returnsCompare marketing costs against anticipated returns

MarketsMarkets

New Fish Farmers Sell within 50Sell within 50 mile radius mile radius Sell within 50Sell within 50 mile radius mile radius

Large scale processing facilities are nonexistent in areas new to Aquaculture

Selecting A Species Selecting A Species

Selecting a Species Choose marketable species Choose marketable species

Selecting A Species Choose species with production information available.Choose species with production information available. = Carp Lobster

Selecting a Species Competition Native wild Foreign wild Farmed domestically Farmed internationally

Selecting a Species If possible, provide variety

The Four P's in Marketing · Product · Price · Promotion · Place · Product · Price · Promotion · Place Mind your P’s But watch your Q’s (Quality Assurance)

Product

ProductProduct Refers to market size and the degree of processing

ProductProduct Live fishLive fish Fish in the roundFish in the round Live fishLive fish Fish in the roundFish in the round Fish in the Round

Product-ProcessedProduct-Processed DrawnDrawn DressedDressed Headed & guttedHeaded & gutted DrawnDrawn DressedDressed Headed & guttedHeaded & gutted Headed and Gutted DressedDressed

Product – Processed ChunksChunks SteaksSteaks ChunksChunks SteaksSteaks

Product – Processed FilletsFillets –Flank fillets –Butterfly fillets NuggetsNuggets DebonedDeboned FilletsFillets –Flank fillets –Butterfly fillets NuggetsNuggets DebonedDeboned FilletsFillets NuggetsNuggets

Product - Processed Value-added Value-added –Breaded –Canned –Sticks –Smoked Value-added Value-added –Breaded –Canned –Sticks –Smoked SmokedSmoked CannedCanned

PricePrice

“Customers don’t want to pay full price for anything and they want to see how much they are saving.”

Price - Where to Start? The lowest price is equal to the cost per pound, including fixed and variable costs.The lowest price is equal to the cost per pound, including fixed and variable costs. The highest price is what you could talk desperate people into paying.The highest price is what you could talk desperate people into paying. The lowest price is equal to the cost per pound, including fixed and variable costs.The lowest price is equal to the cost per pound, including fixed and variable costs. The highest price is what you could talk desperate people into paying.The highest price is what you could talk desperate people into paying.

PricePrice SkimmingSkimming DiscountDiscount Loss-leaderLoss-leader PsychologicalPsychological Perceived valuePerceived value Cost-plusCost-plus Return on investmentReturn on investment CompetitiveCompetitive PenetrationPenetration Cost-plusCost-plus Return on investmentReturn on investment CompetitiveCompetitive PenetrationPenetration

PricePrice Cost - plus Cost - plus IF % gross = profit: IF % gross = profit: Cost - plus Cost - plus IF % gross = profit: IF % gross = profit: Price = unit cost = $1.00 = $ percentage Price = unit cost = $1.00 = $ percentage 1-0.2

CompetitiveCompetitive –Following the price set by another producer SkimmingSkimming –High Price to start, then price drops Penetration PricingPenetration Pricing –Selling price is less than production cost in an attempt to attract new customers. CompetitiveCompetitive –Following the price set by another producer SkimmingSkimming –High Price to start, then price drops Penetration PricingPenetration Pricing –Selling price is less than production cost in an attempt to attract new customers. PricePrice

PsychologicalPsychological –$2.99 vs. $3.00 per pound Loss LeaderLoss Leader Discount PricingDiscount Pricing –Discount prices for large volume sales. PsychologicalPsychological –$2.99 vs. $3.00 per pound Loss LeaderLoss Leader Discount PricingDiscount Pricing –Discount prices for large volume sales. PricePrice

Promotion

“Did you know that every unsatisfied customer transaction wipes out the total profits on 5 to 7 satisfied customers?”

PromotionPromotion Depends upon: Depends upon: –Scale of operation –Resources available –Availability of product –Location of farm Depends upon: Depends upon: –Scale of operation –Resources available –Availability of product –Location of farm

PromotionPromotion Must be targeted to your audience.Must be targeted to your audience. –Income level UpperUpper MiddleMiddle –Marketing location RestaurantsRestaurants Farmer’s marketsFarmer’s markets Must be targeted to your audience.Must be targeted to your audience. –Income level UpperUpper MiddleMiddle –Marketing location RestaurantsRestaurants Farmer’s marketsFarmer’s markets

PromotionPromotion Aimed at consumer Aimed at consumer Clear Clear Concise Concise Focused Focused Aimed at consumer Aimed at consumer Clear Clear Concise Concise Focused Focused

PromotionPromotion Wholesale: Wholesale: –Is the buyer’s responsibility Wholesale: Wholesale: –Is the buyer’s responsibility

PromotionPromotion Direct retail:Direct retail: –Is the producer’s responsibility Direct retail:Direct retail: –Is the producer’s responsibility

PromotionPromotion Generic Generic Personal Personal Generic Generic Personal Personal

Promotion - Generic Catfish Cookbook produced by The Catfish InstituteCatfish Cookbook produced by The Catfish Institute

Most Effective Promotional Methods NewspapersNewspapers SamplingSampling In-store DemonstrationsIn-store Demonstrations In-store AdsIn-store Ads CouponsCoupons Radio / Recipe cards (tie)Radio / Recipe cards (tie) TV / Mailers (tie)TV / Mailers (tie) NewspapersNewspapers SamplingSampling In-store DemonstrationsIn-store Demonstrations In-store AdsIn-store Ads CouponsCoupons Radio / Recipe cards (tie)Radio / Recipe cards (tie) TV / Mailers (tie)TV / Mailers (tie)

Promotion - Newspapers Farm-raised Clams. Raised free of contaminants, highly nutritious, priced to sale. Saturday 8-12 a.m. State Road 38 and 900 East in Danville. Farm-raised Clams. Raised free of contaminants, highly nutritious, priced to sale. Saturday 8-12 a.m. State Road 38 and 900 East in Danville.

Promotion –In Store Demos Provides high visibility of product.Provides high visibility of product. Requires large quantities of product.Requires large quantities of product. Provides high visibility of product.Provides high visibility of product. Requires large quantities of product.Requires large quantities of product.

POP Materials RemindRemind InformInform PersuadePersuade MerchandiseMerchandise

Seafood Month Should Last All Year

Place

PlacePlace Depends on:Depends on: –Location of farm –Method of promotion –Species –Ability to process Depends on:Depends on: –Location of farm –Method of promotion –Species –Ability to process

RestaurantsRestaurants SupermarketsSupermarkets Specialty storesSpecialty stores Live haulersLive haulers RestaurantsRestaurants SupermarketsSupermarkets Specialty storesSpecialty stores Live haulersLive haulers Place - Direct Wholesale

Fast food Fast food Family style service Family style service Atmosphere service Atmosphere service Fast food Fast food Family style service Family style service Atmosphere service Atmosphere service Place - Restaurants

$15.47 $30.00 Family Style · Atmosphere Service

Place – Direct Retail Farm side Farm side Farmers' markets Farmers' markets Roadside stands Roadside stands Farm side Farm side Farmers' markets Farmers' markets Roadside stands Roadside stands

RegulationsRegulations Focus on permits toFocus on permits to –Retail market at farm, farmer’s markets, and roadside stands –Set up small-scale processing facility. Focus on permits toFocus on permits to –Retail market at farm, farmer’s markets, and roadside stands –Set up small-scale processing facility.

InspectionInspection Hazard Analysis Critical Control PointHazard Analysis Critical Control Point HACCP HACCP Hazard Analysis Critical Control PointHazard Analysis Critical Control Point HACCP HACCP

SummarySummary Must be able to answer the questions regarding:Must be able to answer the questions regarding: –Species –Product –Price –Promotion –Place Must be able to answer the questions regarding:Must be able to answer the questions regarding: –Species –Product –Price –Promotion –Place