Marketing and Sales: Risks and Opportunities for Small-scale and Resource-limited Producers Presented by: Dan Krotz, ISED Jim Barham, USDA Adam Diamond, USDA

Presentation Overview  Analyzing Marketing Strategies  Managing Risk  Alternative Marketing Channels  Advantages and Disadvantages

Analyzing Marketing Strategies Existing Products Existing Products New Products New Products Market Penetration Market Penetration Product Development Product Development Existing Markets Existing Markets New Markets New Markets Market Development Market Development Diversification Ansoff Matrix

Market Penetration Existing Products Existing Products New Products New Products Market Penetration Market Penetration Product Development Product Development Existing Markets Existing Markets New Markets New Markets Market Development Market Development Diversification  Brand identity  Selling a “story”  Labeling/Packaging  Display/Signage  Positioning  Advertisements  Tastings, Recipes  Cooking demonstrations  Other product promotions Marketing Strategy Increase customer base in existing market EXAMPLE: Farmers Market as Existing Market

Product Development Existing Products Existing Products New Products New Products Market Penetration Market Penetration Product Development Product Development Existing Markets Existing Markets New Markets New Markets Market Development Market Development Diversification Marketing Strategy Introduce new products to existing market  Value-added products (transforming an existing product into a new product)  Introducing an entirely new product EXAMPLE: Farmers Market as Existing Market

Market Development Existing Products Existing Products New Products New Products Market Penetration Market Penetration Product Development Product Development Existing Markets Existing Markets New Markets New Markets Market Development Market Development Diversification  Other Farmers Markets  Community Supported Agriculture Schemes  Buying Clubs  Restaurants  Grocery Stores  Institutional Sales (e.g., schools, hospitals, corporate cafeterias, etc.) Marketing Strategy Capture new markets with existing products EXAMPLE: From Existing Farmers Market to

Diversification Existing Products Existing Products New Products New Products Market Penetration Market Penetration Product Development Product Development Existing Markets Existing Markets New Markets New Markets Market Development Market Development Diversification  Tobacco farmers transitioning to organic fruit and vegetable production for sales in grocery stores  Immigrant/refugee farmers growing green peppers for Chipotle (a restaurant chain)  New dairy farmer producing goat cheese for sales in specialty/gourmet food stores  Banana farmers transitioning to fruit/vegetable production for sales in tourist markets (e.g., hotels, cruise ships, restaurants). Marketing Strategy Entering a new market with new products EXAMPLE: New and Transitioning Farmers

Marketing Strategies and Managing Risk Existing Products Existing Products New Products New Products Market Penetration Market Penetration Product Development Product Development Existing Markets Existing Markets New Markets New Markets Market Development Market Development Diversification Risk Low High

Managing Risk Existing Products Existing Products New Products New Products Low Risk Market Penetration Low Risk Market Penetration Product Development Product Development Existing Markets Existing Markets New Markets New Markets Market Development Market Development Diversification High Risk Diversification High Risk Greater Uncertainty = Greater Risk The element of risk increases the further the strategy moves away from known quantities – the existing product and the existing market  Market Penetration: Least risky strategy, hence most often used. Both production practices and customers/buyers are better known.  Market Development: Growing risk with greater market uncertainty  Product Development: Growing risk with greater product uncertainty  Diversification: Highest level of risk with both product and market uncertainty