Planning Your Strategy will never know what great things ... · greater value. What Do Customers ... Variable EstimatedCosts $1,549.50 Fertilizer Pesticides Transplants Labor Fuel

Profitable Greenhouse Production of Local ProduceTheresa Nartea, Virginia Cooperative Extension

Title: Write Your Own Marketing PlanAuthor: Theresa J. Nartea, [email protected]

Purpose: To engage small farms to write out their own marketing plan 1

Planning Your Produce Marketing Strategy

Theresa J. Nartea, Assistant ProfessorExtension Specialist‐Marketing & Agribusiness

Virginia Cooperative ExtensionVirginia State University, Petersburg, VA

Plan Your Market

You will never know what great things you can do until you really try.

Norman Vincent Peale

Marketing is like a Pizza

Photo Credit: http://www.vammencamping.dk/billeder/billeder/mad/pizza/pizza3.jpg




Learning Objective: Make Your Marketing Pizza

• UnderstandMarketing Strategy (crust)

• DiscussMarketing Worksheets (sauce)

• Share Educational Info (toppings)

What is Marketing Strategy?

Marketing Strategy Actively Identifies Targeted Customers and Meets Identified Customer Needs for Desired Products & Services and Passionately Pursues Customer Loyalty

Customer Loyalty / Retention

Strategic Marketing Flow Chart

• Customer Needs

• Define Market

• Company Capabilities

• Competition

•Market Dynamics

• Collaborators

Market Analysis

•Market Segmentation and Selection

• Segment Targeting

• Product Positioning

Market Selection

• Product

• Price

• Place

• Promotion

Marketing Mix

• Awareness

• Interest

• Purchase

Get Customers

What does the market look like?

Who do I pursue to and how?

What do I sell, where do I sell it, how do I

sell it?

How do I keep

customers?

4 Ps of Marketing




Class Folder

Let’s Go Through Marketing PlanWorksheet Handout

Define Specific Goals

I want to sell 25 percent more

heirloom tomatoes than last year by September 1.




Why Do I Have To Define My Product?

So you can haveCompetitive Advantage

in your marketplace

What is Competitive Advantage?

The advantage gainedover competitors by offering consumers a

greater value.

What Do Customers Value?

• Price• Product Benefits• Customer Service




Strategy to Thrive, not just Survive

Differentiation FocusUnique/Rare Products, Made to Order, Recipes, “Over the Top” Customer Service & Satisfaction

DifferentiationVirginia Grown, Local,

Organic, Artisan Products

Cost FocusLower Cost Discount on

Specific Products

Cost LeadershipLowest Cost Product

Available

Top Consumer Trends

Recession Proofing

Thinking Green

Buying Local

Reference: Trendwatching. (2010). 11 crucial trends for 2011. Retrieved from http://trendwatching.com/trends/pdf/trendwatching%202010‐12%2011%20TRENDS%202011.pdf

Top Three Food Trends

Locally Sourced Meats & Seafood

Locally Grown Produce

Sustainability“Farmers, Foresters, and Agribusinesses‐The Original

Environmental Stewards.” 2010 Critical Issue for Virginia Agribusiness Council

Reference: National Restaurant Association (2010). Chefs survey: What’s Hot in 2011. Retrieved from http://www.restaurant.org/pdfs/research/whats_hot_2011.pdf

Putting Trends Together

Recession Proofing

Thinking Green

Buying Local

Ranking #13 on Food Trends:

Reduced Prices for

Mini‐MealsHalf Portions

Smaller Portions&

Value Meals

Ranking #3 on Food Trends:

Sustainabilityof, relating to, or being a method of

harvesting or using a resource so that the

resource is not depleted or permanently damaged

#1 Locally Sourced Meats & Seafood

#2 Locally Grown Produce

#10 Farm Branded Ingredients

#12 Locally produced alcohol




Define Product‐Part 1• What do you have to sell?

– List each product

• When is it available?– Month, Weeks, Days, Times

• What amounts do you have? – Ounces, Pounds, Tons

Define Product‐Part 2

What are your Unique Selling Points?

• Rare, Heirloom, Hard‐to find • New Variety• Delicious, Tasty• Healthy• Premium Quality• Local• Farm Raised, All‐Natural

What are your Ultimate Benefits?

•Personal Health•Personal Fulfillment

•Emotional Well‐Being

•Environmentally Conscious

•Nostalgic Memories




Products Need a Story

http://www.backyardfarms.com

Make A Simple Logo

More ideas at: http://buntonlogo.com/egallery1.htm

Photo Credit: http://99designs.com/logo‐design/

Photo Credit: http://www.bradfitzpatrick.com/

Farm Signs are Vitalhttp://www.stockrainbow.com/

http://www.eatmyfish.com/

How do customers find you?

1% Radio1% TV4% Phone book11% Newspaper29% Word of Mouth54% They Saw the Sign!Claus, R. James, Susan L. Claus and Thomas A. Claus, 2005. The economic context of on‐premise business signs and how to establish value in the marketplace. The Signage Foundation, Inc.




Other Promotional Items

Small Batches: http://www.vistaprint.com/Large Batches Bid: http://www.printindustry.com/

Customer Identification Handout #2

Who is the FACE of your Customer?

•Young Adults (18‐24) • Organics Purchasers• Natural Foods Purchasers• Food Allergy Sufferers• Older Adults (40+)• Mothers of children 0‐18




What Are Customers Thinking? (Psychographic)

How Can I Eat Healthier? I am

Concerned about…Aging,

Cancer, High Blood Pressure,

Heart Attacks, Diabetes,

Getting Fat, Looking My Best,

Feeling Happy…

D. Piraro, (2011, February 16). 4 is for fun. [Web log post]. Retrieved from http://bizarrocomic.blogspot.com/2011/02/4‐for‐fun.html

Solve a Problem: Grow Superfoods

a food that is considered to be very good for your health and that may even help some medical conditions

Definition

Macmillan Publishers Limited. (2011). Superfood definition. Retrieved from http://www.macmillandictionary.com/dictionary/american/superfood

Consumer Perception of

Childs, N. M., & Poryzees, G. H. (1998). Foods that help prevent disease: consumer attitudes and public policy implications. British Food Journal, 100 (9). 419‐426. ISSN 0007‐070X

Over half (55%) of US adults believe in the disease‐preventative

properties of natural foods such as fruits, vegetables and cereal grains. Consumer belief in the nutraceutical

foods category has increased significantly.




Photo Credit: http://www.digitalbuzzblog.com/2011‐mobile‐statistics‐stats‐facts‐marketing‐infographic/

Consider How Customers Access Info


Women purchase the majority of foods for household consumption.






Consider that most of your farm customers will tolerate about one hour of driving. Focus on large populations up to 50

miles away.

http://factfinder.census.gov/

Be sure to also look up racial, income, and

college education statistics




Look Up Prices in One Place!

http://www.marketnews.usda.gov/portal/fv

Run a Custom Report

Run a Custom Report

Run a Custom Report




21,000 US Retail Grocers Report Prices!http://www.ams.usda.gov/mnreports/fvwretail.pdf

Pricing Check

http://www.harristeeter.com/

Be Observant of e‐Pricing

Breaking Even, not Going BrokeWhat do you need to know: High Tunnel Tomatoes

1,000 square feet (1/2 high tunnel) planted 6 feet apart

Variable Costs$1,549.50FertilizerPesticidesTransplants

LaborFuel

Estimated Yield833 pounds

119 Plants Large Size Tomatoes

Fixed Costs$155.25EquipmentBuilding

HoophouseInsuranceTaxes

Selling Price Direct: $1.12/lb. wholesale; $3.00/lb. directhttp://www.localharvest.org/

http://www.rodaleinstitute.org/Organic‐Price‐Report http://www.vdacs.virginia.gov/marketnews/fruitveg.shtml

Review High Tunnel Economic Budget




Step One: Unit Contribution MarginVariable Costs:

$1,549.50

FertilizerPesticidesTransplants

LaborFuel

833 lbs (170 plants X .7) x7 lbs./plant)

$1,549.50

Unit Variable Cost: 54¢

Current Selling Price (per Unit) – Unit Variable Cost = Unit Contribution Margin

$3.00 ‐ $0.54 = $2.46

$1.12 ‐ $0.54 = $0.58

Break Even Point, in Units

$3.00 price

$155.25

$2.46

63 lbs. large tomatoes

$1.12 price

$155.25

$0.58

268 lbs. large tomatoes

Fixed Costs ($155.25)Unit Contribution Margin

Target Profit

$3.00/lb price

$155.25 + $1,500

$2.46

Sell 673 lbs.

$1.12/lb price

$155.25 + $1,500.00

$0.58

Sell 2,854 lbs.

Fixed Costs ($155.25) + Target Profit ($1,500.00)Unit Contribution Margin

A Farm Value Menu?

Photo Cred

it:http://fastfo

od.ocregister.com

/files/20

10/02/extra‐value‐men

us.jp

g




Hint:

Think about your customers and how a mother thinks…

“If I buy 2 apples for $1, then I will have 2 snacks, one for each child. So I need to buy $5 of apples or 10 apples so I can have lunch snacks for the week.”

Let’s Try It Together!

How you can do a Value Menu3 tomatoes = 1 lb. (see fruits & veggies buying guide)1 lb. of tomatoes (retail)1 = $1.93

(see retail price report)

So write it like this: 3 for $2.00

1 USDA Agricultural Marketing Service. (2012). National fruit and vegetable retail report. Retrieved from http://www.ams.usda.gov/mnreports/fvwretail.pdf

Wholesale to Retailers & Restaurants

Shenandoah Valley Produce AuctionPhoto Credit: http://farm6.static.flickr.com/5239/5891918678_f3f74dc22d.jpg




Roadside Farm Stand

Farmers Market

Community Supported Agriculture

Photo Credit: http://www.stateconservation.org/california/images/csa.jpg; http://www.samcoren.com/wp‐content/uploads/2010/08/farm‐share‐community‐supported‐agriculture‐massachusetts‐enterprise‐farms.jpg

Agritourism

http://www.tnvacation.com/agritourism/produce‐plants/gardens‐greenhouses‐florists/




E‐Commerce: Internet Sales

http://www.localharvest.org/fresh‐tomatoes‐in‐season‐lbs‐C20893

E‐Commerce: Online Grocery

http://www.relayfoods.com

E‐Commerce: Online Coop

http://flf.luluslocalfood.com/about/about_cycle.php

Did you ever consider the idea of working together?




Coopetition blends competition with

cooperation to enhance marketing relationships (Osarenkhoe, 2010).

Osarenkhoe, A. (2010). A study of inter‐firm dynamics between competition and cooperation – A coopetition strategy. Journal of Database Marketing & Customer Strategy Management, 17, 201‐221. doi:10.1057/dbm.2010.23

Supply Chain: Production Indonesian Case Study, 2010

Farmer• 100 farms

Farmer Group • 13 farmer groups

Processor• One (1) company

Retailer• 19 retail customers

Mariman, Feifi, D., Martini, S., Astuti, R., Suharjito, Hidayat, S. (2010). Added value and performance analyses of edamame soybean supply chain: A case study. Operations and Supply Chain Management, 3 (3), 148‐163. ISSN 1979‐3561 *Case study location is Bogor, Indonesia.

Farmer• Grow• Work together in Farmer Groups

Farmer Group • Pick Up from Farms

• Aggregate • Deliver • Liaison

Processor• Buy from Farmer Groups

• Sort/Grade• Process• Sell to Retailer

Retailer• Place orders with Processor

• Sell B2B• Sell B2C

Supply Chain: ParticipationIndonesian Case Study, 2010

Farmer• Crop failure

• Rejected crop

Farmer Group • Supply• Quality control

• Price Negotiation

Processor• Obligation to farms

• Shortage• Excess• Retail contracts

Retailer• Low risk• Can buy from another processor

Supply Chain: RisksIndonesian Case Study, 2010




Farmer• Profits divided by farmer groups

Farmer Group • 10‐15%

Processor• 25‐30%• Paid farmer group‐‐one week after receive goods

Retailer• 15‐20%• Paid processor 30 days after receive goods

Supply Chain: Profitability Indonesian Case Study, 2010

Farmer• Improved crop inputs = increased quality & high yield

Farmer Group • Assist farms with crop inputs

• Aggressive contracts

Processor• Offer different products

• Bulk• Package1. Fresh2. Frozen

Retailer• Point of Purchase (POP) displays

• In store cooking demos

Supply Chain: Value AddedIndonesian Case Study, 2010

A Few More Marketing TipsAlmost Done…




Develop Advertising Methods

CardBrochure

SignWeb

LeadsCustomers!

A Business Card Example

FRONT•Product clearly indicated•Unique “Virginia Raised”•Contact •GPS Coordinates

BACK• Action oriented• Come to our harvest• Call for pre‐order

A Business Card

http://www.vistaprint.com/

Free Car Magnet Sign

http://www.vistaprint.com/

http://www.victorystore.com/magnets/car_magnet/images/car_magnet.jpg




Farm Banner & Signs www.vistaprint.com

Free Local Harvest Web Listing

www.localharvest.org

Try a Local Harvest Online Store

www.localharvest.org

http://www.yellowpages.com

Yellow Pages Web Listing




http://maps.google.com

Google Map Web Listing

List on Virginia Grown

http://www.vdacs.virginia.gov/vagrown‐directory/participationform.shtml

Explore Low Cost Websites

• Facebook, Twitter, and Blogs are websites

• Self List Directories are webpages

• Wix.com; Vistaprint.com, and

smallfarmcentral.com

http://www.smallfarmcentral.com




Help Customers Make Healthy Choices

This picture shows the nutritional balance of fresh tomatoes. Each spoke is a different nutrition category. Dietary fiber is colored green. Protein is blue. Vitamins are purple. Minerals are white. Yellow is saturated fat, cholesterol, and sodium. Tomatoes are high in vitamins and minerals!

http://nutritiondata.self.com

Consider Educational QR Signage

Photo Credit: http://4.bp.blogspot.com/‐uUWVuSapn8o/TtKhdAEXxtI/AAAAAAAAAQI/o3ydXGQjXjc/s1600/qkies2_600x479.jpg; http://4.bp.blogspot.com/_NaaaxF1JRY0/TGNLLNf6x1I/AAAAAAAAAOs/SzsZKem7_j4/s1600/Food+Coop+QR+Code.jpg

Making QR Codes is Easy

http://www.interactive‐studios.net/barcode/createcode.aspx

Consider Credit Cards!

I would lose one‐fourth to one‐half of my

business if I didn’t accept credit cards.

Sit Dog Sit Pet sitting Service Customers used to ask me if I take credit

cards, I’d say “No” and they would leave.

BBQ2U Catering




Smartphone Credit Card Acceptance

https://squareup.com

Smartphone Credit Card Acceptance

http://payments.intuit.com/

Wrap Up

• Marketing is a Strategy• Marketing is like a Pizza (crust, sauce, toppings)• Fail to Plan, Plan to Fail• Practice, Implement, Revise• You are in Control

Always Maintain Hopefulness,

Especially when the Going is Hard.

Norman Vincent Peale




Go Make Your Pizza!

Photo Credit: http://www.vammencamping.dk/billeder/billeder/mad/pizza/pizza3.jpg

Documents

Planning Your Strategy will never know what great things ... · greater value. What Do Customers ... Variable EstimatedCosts $1,549.50 Fertilizer Pesticides Transplants Labor Fuel