1. Marketing, part 1 Building a Sustainable Business Week 2 Mark Cannella

2. Re-Cap Session 1 One thing you learned about business planning or yourself? Values – Vision – Mission – Goals - SWOT

3. 5 P’s of Marketing Product People Price Place Promotion Anytime one of these “P’s” changes, it should trigger a review of all the other “P’s”

4. Product A bundle of attributes (features, functions, benefits, uses) capable of exchange and/or use Products exist to satisfy an individual or an organizational objective Know your audience and be able to communicate your “product” effectively

5. Usage: the physical use of a product Service: an intangible benefit (can be measured but not easily) – The brand experience Some Examples of Each…. Satisfying Needs

6. Product Features Taste Color Size Raw materials Style Purpose Value Nutritional Claims 3 rd Party Acreditation Reputation Social Value Life cycle Classification Place of Origin Quantity Image

7. Place What type of buyers do you have the capacity to serve? Where are the buyers that demand YOUR product (how many do you need)

8. Place- Distribution Strategy Inventory Capacity: Can we store items with minimal shrinkage Distribution Alternatives –Direct to Consumer (by the unit) –Intermediary (cases, pallets, tons)

9. Place- Distribution Strategy Successful Outlet Selling Price Matches Cost to Serve What is Missing? Logistics (order, delivery) Product Match Terms of Payment Alignment with Mission Risk and Uncertainty Investment Required Promo Effort Time/Labor to Serve Sales Volume

10. Price A variety of strategies can be used to set prices, “Are you a price maker or price taker?” Pricing must balance your internal costs and customers willingness-to-pay/market demand

11. Pricing Strategies 1.Competitive Pricing: What are others charging? a.Relative Pricing/Signaling: Setting above or below similar products. 2.Cost Oriented: Know your costs 3. Penetration Pricing vs. Skimming a. Breaking into a competitive market: Penetration b. No competition: Skimming 4. Examples Today: Carrot vs. Eggs vs Sheep Cheese

12. Pricing Strategies 3. Penetration Pricing vs. Skimming a. Breaking into a competitive market: Penetration b. No competition: Skimming 4. Examples Today: Carrot vs. Eggs vs Sheep Cheese

13. Strong Marketing Plan -The 5 P’s need to be connected -Common Pitfalls: -Overestimating “local” markets (over diversification vs. competitive expansion) -The mis-match of “middle class” values and “upper-class” products -Failing to recognize how your operations/technology/systems impact on your capacity to serve certain markets

14. Broilers PlaceProductPriceAttributes Direct to Customer Whole Birds?“family farm” Free-range? Hormone Free? To RetailBoneless Breast Parts (Less than 20% poultry sold as whole birds) “local” means more than “organic” from recent surveys

15. Fluid Milk PlaceProductPriceAttributes Direct to Customer ½ gallon$7- $10/gallon Raw St. Albans Coop cwtVariable $21.09 (Oct 2012) Protein: $3.72 Butterfat: $2.11 Butterfat $0.43 Cell Count Premiums PPD:distance

16. Red Potato PlaceProductPriceAttributes Direct to Customer Quart container $3.99/eachPretty, well washed, “new potato” Distributor.5 ton or 1 ton delivery: $780/TOrganic

18. Pricing Strategies Examples Today: Eggs

19. Market Research Paperword Ranks Highest Perceptions on Plastic, right or wrong Do it right! full size stickers or blank cartons

20. Market Research Currently collecting responses from retail grocers in New England. Attributes that Matter Whole Birds and Parts Service Required Demand and Price Considerations

22. Market Research 19 stores responding as of 10/12/12 –Range from 900 sq feet to 33,000 sq ft –How they define local: in state or up to 30-100 mile radius –A good deal of variation between small and large stores

23. Market Research Meat Chicken: -Cuts as a Percent of all chicken sales -Whole (15%), Boneless Breast (41%), Legs and Thighs: 28% -Average Number of Weeks Product Required -15 - 20 weeks (range of 2 – 52 weeks) -Demand: -7 of 8 stores indicated a need for more local suppliers of chicken parts -Largest Constraints to Sell more Chicken -Price (7 responses), Supply (4), Cooler Space (2)

26. Market Research Eggs: -Weekly Sales -Range from 50 dozen to 2,000 dozen per week -9 out of 12 stores sell farm run, ungraded eggs -Average Number of Weeks Product Required -Range of 2 – 52 weeks, but the most common response was 10-15 weeks -Volume required to be a viable supplier: -50 dozen: this is for stores selling 400-900 dozen per week they indicate -Some stores indicate 5-10 dozen (small stores)

28. Next week Marketing, Part 2 Define target customer/market region Define your competition Market research – Primary & Secondary Consumer trends to consider Wrapping up the marketing chapter

29. Next week Marketing, Part 2 Readings: pages 106-126 Worksheets: 4.1 – 4.8