Market Planning and Market ing What You Pr oduce Duncan M. Chembezi & E’licia L. Chaver est Small Farms Research Center Roadmap t o Success f or Small Farmers and Ranchers 5 t h Nat ional Small Farm Conf erence, Springf ield, I llinois, Sept ember 15-17, 2009
Plan Ahead, Do Your Homework Small f arms, by nat ure are limit ed resource operat ions � t ime, labor, scale, and capit al are limit ing P lanning ahead helps avoid mist akes and wast ing resources P roducers who t ake t he t ime t o develop and f ollow t hrough wit h business and market ing plans have t aken a giant st ep t owards prof it abilit y.
Developing a Business Plan Keep it simple. You need an out line of why you are in business, your obj ect ives, and how you will get t here. A mission st at ement : purpose of your f arm operat ion (1 or 2 sent ences) A st at ement of goals, obj ect ives, and st rat egies: a snapshot of your f arm operat ion (what you want t o do and how you are going t o do it )
Developing a Business Plan A product ion plan: det ails t he product ion process on your f arm (be det ailed, include product ion goals, all input s) A f inancial plan: helps t o est imat e how much money you will need (balance sheet , income st at ement , cash) St af f ing and organizat ion plans: det ails who does what , also if out side labor is needed, where t o f ind t hem and what t hey will do in t he operat ion
Developing a Business Plan Management and contingency plans: details what to do when something happens outside your best laid plans (provides some f lexibility) Develop a marketing plan: a critical part and of ten omitted part of the business plan
Developing a Market ing Plan A market ing plan should include element s of t he f ollowing: Result s of market research: compet it ors, buyers, suppliers, and t rends Market ing obj ect ives : goals t hat help you mark your way, t ypically short t erm (less t han 2 years), and measurable/ at t ainable St rat egies t o reach obj ect ives: t he process of get t ing your product f rom t he f arm t o t he cust omer (product , price, place, promot ion)
Developing a Market ing Plan Develop a realist ic budget : est imat e accurat ely t he cost of market ing (planning here helps you t o search out less expensive alt ernat ives Develop an act ion plan: t his is how you are going t o carry out your market ing plan Measure, measure, measure: monit or t he progress of your market ing plan
Market ing St rat egies � Let ’s look at t he 4 P ’s of market ing � P roduct : needs t o st andout , why buy your product over someone else’s? � P rice: you need t o cover cost s t o make a prof it , you need t o f ind t he right price � Place: where you market has much t o do wit h how you market ; pat t ern market ing plan t o f it t he market � P romot ion: can mean t he dif f erence bet ween success and f ailure of market ing
Your market has much t o do wit h how you market your product
Market ing Skills- Packaging P resent ing product : has much t o do wit h market ing t he product Feasibilit y: not needed f or all market s Fancy vs. Basic: should ref lect t he market P reservat ion: can ext end shelf lif e I dent it y: f arm name or logo on product Communicat ion: recipes, inf o t ags, et c.
Piling up produce can help sell it Paint ed basket s can help t oo.
Direct Market ing When a f armer sells commodit ies in a t radit ional market place t he main concer ns ar e pr oducing t he cr op, selling it f or a good pr ice, and t hen get t ing paid. I n direct market ing f armers have t hese same concerns plus t he added responsibilit y of market ing.
Direct Market ing P rof it s: pot ent ially higher Cash f low: cust omer pays you direct ly Market ing cont rol: can produce what you want and set your own prof it s Diversit y: works well wit h small f arms
Direct Market ing Volume: less product is usually sold t han wit h ot her market ing vent ures Time: requires more of a t ime commit ment P eople skills: you are dealing direct ly wit h people (need t o always wear a happy f ace) Market ing skills: it s compet it ive, you are going t o have t o sell your product
When it comes to marketing When it comes to marketing strategies, there is no strategies, there is no substitute f or having a substitute f or having a good, quality product. good, quality product. Your reputation as a producer Your reputation as a producer depends on the quality of your depends on the quality of your product. product.
Farmers Market s Fast est growing f orm of direct market ing Preparat ion: requires lit t le preparat ion by producer; public enj oys convenience St art up: minimal cost s and market ing skills are needed Direct int eract ion: best f eat ure is cont act bet ween cust omer and producer Weat her: at it s mercy f or rain, heat , & cold
Farmers Market Comf ort : you are out in t he weat her all day Time: you will spend t he bet t er part of a day at t he market Direct compet it ion: compet ing producers are all t oget her in a small area Regulat ions/ policies: you have t o be able t o f ollow rules set by market management
Farmers Market s require a day’s commit ment out doors
Pick-Your-Own Has long been a successf ul direct market ing vent ure Cust omer pays t o pick: if it was j ust t hat simple, ever yone would be doing it Cost reduct ion: biggest advant age (t ransport at ion, handling, st orage), labor f or harvest ing is of f set by t he cost of people movers Cust omers buy more: PYO pickers t ypically purchase more t han ot her market s Lack of privacy: you are allowing t he public on your f arm
Pick-Your-Own Liabilit y I nsurance: insurance companies get “t wit chy” about PYO and having people roaming your f arm Damaged crops: cust omers and t heir kids will pick- over and damage crops Bad weat her: will chase away cust omers; t his can be a problem wit h limit ed season crops Labor cost s: need cashier s and people mover s P rice: PYO pr ices ar e of t en lower ; cust omer s expect compensat ion f or t heir labors
Roadside Market s At t ract ing repeat cust omers: t his is key t o t he long t erm success of your market Save cost s: t here is cost savings in t ransport at ion, packaging, and middlemen “Cat chy” signs/ displays: are necessary f or at t ract ing cust omers t o st op at t he st and Overhead cost s: are higher due t o t he f acilit ies
Roadside St ands should look neat and clean wit h f resh, ripe produce
The appearance of your f acilit ies and grounds ref lect on your management skills.
Roadside Market s P lanning and Zoning: government red t ape Locat ion: key t o success (needs t o be near enough t o main roads t o at t ract cust omers and repeat ers Facilit ies and buildings: f irst t hing people see of your market (you want t o put t he best possible look on your st and)
Communit y Support ed Agricult ure CSA’s are new, f ast -growing direct market ing vent ure Members purchase shares of t he f arm’s harvest and accept product ion risks As t he crop mat ures, it is harvest ed and divided up among shareholders Shareholders get a f resh supply of produce and support local agricult ure (urban-rural linkage)
Communit y Support ed Agricult ure Shareholders have input int o what is grown , variet ies, and how it is grown Fees are paid in advance, t his guarant ees t he f armer a market f or everyt hing produced, t he crop is sold bef ore it is plant ed Advanced payment creat es working capit al f or t he f arm operat ion
Communit y Support ed Agricult ure CSA’s allow bet t er of f -season plant ing CSA’s help t o spread out risks, everyone shares in t he good and bad t imes Shareholders sign a cont ract acknowledging t he risks t o ant icipat ed yields CSA’s have reduced labor cost s (cust omers help wit h product ion)
Wholesale Market ing Direct market ing is not f or everyone P rof it s: selling direct ly t o t he ret ailer, bypassing t he middleman, is best P roduct ident it y: you can develop your own logo or packaging t o enhance t he product Opport unit ies: t hey are out t here, if you are int erest ed (specialt y crops) Specialt y crops: ret ailers are especially int erest ed in crops not produced by t he larger f arms
Wholesale market ing requires you t o t ransport your product t o t he ret ailer.
Wholesale Market ing Transport at ion cost s: you will have t o deliver your product t o t he ret ailer Special handling and grading: some r et ailer s have part icular requirement s and st andards f or pr oduct s; t hese var y by r et ailer Special packaging: some r et ailer s ar e ver y “picky” about how you deliver product Limit ed diver sit y: less diver sit y is r isky Pooled pr oduct ion: small f armers will need t o work t oget her t o meet product ion demands
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