1	"Marketing Alternatives" Marketing Alternatives Julie Fox, Ph.D., http://directmarketing.osu.edu Southern Ohio New & Small Farm College 10 March 2009
2	Overview Marketing Direct Marketing in Ohio Marketing … what it is & how you can be good at it Planning & Promotion Tools Resources
3	Marketing Your Farm … Direct Marketing Works in Ohio Ohio’s Changing “Farms” Established Farms Diversifying increasing number of small acreage farms (1 – 179 acres) 75 percent of Ohio farms New Landowners
4	Direct Marketing in Ohio 140+ Farmers Markets (USDA) 600+ Farm Markets (ODA) 115 Wineries (Wine Assn.) 90+ CSAs (OEFFA) 8+ Produce Auctions Other Grocery Stores & Institutions Cooperative Marketing, Chef-Grower Networks,… Local/Regional Food Initiatives
5	Direct Marketing … as it relates to agriculture Direct marketing is interactive … beyond mass marketing Direct Marketing, as it relates to ag. “selling direct to consumers - individuals, families, restaurants, tour groups, big companies and others.” - North American Farmers' Direct Marketing Assn.
6	Marketing is … … everything - Jay Conrad Levinson … tactics, strategy, culture Tactics: advertising, public relations, … Strategy: to position and compete based on what’s happening in the market Culture: everyone in the organization values the customer and operates based on buy-in to strategies … process / function Art (Creative, Emotional, Bond with customers) Science (Hypotheses, Test, Evaluate)
7	Marketing “Combination” Marketing is not only much broader than selling, it is the whole business seen from the customer’s point of view. - Peter Drucker
8	Direct Marketing Trends a. ‘Local' Foods Community Supported Agriculture Farmers’ Markets On-Farm Bakeries & Coffee Shops b. Recreation & Tourism Experience Economy c. Niche Markets d. Using the Internet Social & Mobile Media
9	Marketing in Today’s Experience Economy…$ More than product procurement - Example Agrarian Economy Commodity Extracting commodities chicken Industrial Economy Flavored Manufactured goods chicken Service Economy Fast food Delivering services KFC Experience Economy Medieval Stages experiences Times Personal and memorable way
10	Products What do you sell? Various crops and livestock Fruits & Vegetables Meat and other animal products Trees, shrubs, flowers, herbs & other nursery & agroforestry products Value-added foods & nature-based products Other products
11	What do you sell? Services/Experiences Farm tours Pick-Your-Own Mazes Hay Rides Games/Play Areas Specialty Gardens Educational Demonstrations School tours, Other bus tours Corporate parties, Weddings, Birthday parties, Working vacations
12	What do you sell? Services/Experiences Recreation and hospitality enterprises Food sales/service: local & regional cuisine Restaurants, Farm & Farmers Markets, Tasting Lodging: Bed & Breakfast, Cabins & Cottages Recreation: Hunting or fishing for fee, trail riding, wildlife watching Gifts: arts & crafts; other local/regional specialties Festivals, Events & Other Attractions featuring natural resources, heritage and historical sites, etc.
13	Product/Services Breadth/Depth Product Mix Packaging & Pricing Bundling
14	Product/Service Pricing Observing trends in other markets Information USDA Terminal Market http://marketnews.usda.gov/portal/fv Wholesale Shipping Points http://www.thepacker.com/MarketTrends/MarketTrends-Home.asp KY Produce Auction Report – weekly http://www.uky.edu/Ag/HortBiz/ KY Farm Market Report – weekly price highlights from 3-5 markets for major product http://www.uky.edu/Ag/HortBiz
15	PYO One rule of thumb- 10,000 people within 25 mile radius to support 1-acre of PYO strawberries 10 acre PYO operation in Iowa has only 15,000 in county, but savvy marketing draws 4,500 visitors from a 50-mile radius
16	Pricing Approaches Market supply and demand factors Product Availability Customer Availability Strategies Cost + (fixed & variable expenses / perennial crops - overhead) Skim, Market Rate, Cost Plus Other (lost leader, bundling, …) For unique products (value) Customer willingness-to-pay Willingness to drive …
17	Places Where do you sell? Roadside stands Farm markets & Pick-Your-Own operations Farmers markets and public markets Mail order, Internet-based sales & CSA – Community Supported Agriculture (Delivery) Auctions, Festivals & Other Events On location sales calls (delivery) Restaurants, Specialty Grocers, Institutions Other… A product or service provides customer satisfaction only if it is available to the customer when and where it is needed.” - Lambert, Stock & Ellram, Fundamentals of Logistics Management, 1998
18	People Who buys/influences? Who purchases or influences the purchase of products/services? Consumers Chefs/Restaurants Schools, Institutions, Municipalities Businesses Specialty Retailers Other The more you learn about your buyers (formerly or informally), the better you can “delight” them and attract buyers similar to them
19	What do you know about Your Customers? Demographics – Who/Where are they? Age, Gender, Income Level, Education, Marital Status, Household Type, Location, Occupation… Psychographics – What is important to them Activities, Interests, Opinions – Lifestyle Customer Type – Awareness/Relationship Preferences & Behavior Non-customers Perceived barriers?
20	Demographics Matter
21	Psychographics Matter Influences where, when, how & why they buy You can improve your labels, positioning & timing Needs (such as good health) Values (such as simplicity) Cultures (modern, religious, liberal, conservative, artistic, environmental) You can better price based on buying styles Price, fads, quality, latest, luxury, convenience You can find more customers based on: Interests/Hobbies (such as sports, reading, fitness, workaholic, travel, cooking, gardening)
22	Customer Type Matters
23	Preferences & Behavior Matter Be a better competitor … Improve your profitability How much do they spend – on what – when? How do they pay (order)? What else do they want? Willingness to pay/drive? Short-term – Behavior compared to your goal? Long-term – Loyalty Ladder / Are they profitable? Focus energy on opportunities based on: General consumer trends What’s going on in your area
24	Consumer Trend Example Food Customers
25	People - Decision Process Customer View of Value
26	Marketing Strategy Buying Behavior
27	Promotions - Marketing Yourself & Your Farm First Impressions … Reputation What do people think of when you are seen? What do people think when they first meet you? What do people think of when you are heard? What do people think of you online? What do people think of when your name is spoken? Think about the things that represent you & how it influences others
28	Promotions Be Remarkable Why, how and when you lead the customer to purchase (Taylor, 1965) Image, Positioning, Branding, Competitive Advantage (marketing is nothing w/o branding / branding creates recognition, familiarity, predictability, trust…) Targeted approaches for advertising, public relations and other communication strategies Merchandising - signage, displays, … The customer experience & hospitality Meaningful sales transactions Ongoing Customer Relationship Management Cooperative marketing
29	Promotions Communication Options Newspaper, Magazines, Direct Mail,… Yellow Pages & Other Directories Internet (Web, Email, …) Billboards & Signage Radio, Cable TV Specialty Advertising (caps, pens, mugs …) Cards, Brochures, Catalogs, Newsletters (print) Events (sponsorship, displays, badges, folders, bags…) Public Relations, Presentations & Networking (member) Uniforms … Packaging Inserts Loyalty Programs Strategic Partnerships Other – Word of Mouth, Telephone, Door to Door,…
30	Promotions Community & Public Relations Get involved in community activities Help sponsor community events Acknowledge referrals Press Releases (pre-write press releases for every week of busy season) Short (max. 2 typed pages double-spaced) News worthy, local appeal, tied to news Visual appeal (newspaper, broadcast) Contests Media link on website with story ideas Deliver samples of ‘first picked’ to five most popular media outlets along w/media packet – other influential people Be an “Expert” Speaker (speak to civic organizations (30-60 days before busy season) Have an answering machine message Cross Promotions &Cooperative Marketing
31	Selling …they come – get them to spend add on sales start with employees buttons “do you want fries…” tis w/ tat product selection the newest “new ways” for the “old stand-bys” product placement educate employees be specific not “wishy-washy” “how” & “why” signs
32	personal selling visit principals five most highly probably elementary schools about tours create a great on-farm marketing piece for customers plan sales section of employee manual; set orientation/training date
33	Promotions Ohio MarketMaker National Site State Site www.ohiomarketmaker.com
34	Ohio MarketMaker OhioMarketMaker.com Free, easy-to-use web-based resource Allows users (producers & buyers) to update individual data & search all data. Maps potential markets by demographic characteristics (census profiles of targeted markets) Maps and provides profiles of food related businesses, including producers, processors, retailer, farmers’ markets, wineries and more
35	Ohio MarketMaker Buy/Sell Forum, Case Studies & More
36	www.ohiomarketmaker.com Try It
37	Promotions - Directory Listings National MarketMaker, www.ohiomarketmaker.com Local Harvest, http://www.localharvest.org Rural Bounty, http://www.ruralbounty.com The Eat Well Guide http://www.eatwellguide.org/ Biodynamic Farming and Gardening Association CSA listings http://www.biodynamics.com/csa.html NewFarm Farm Locator http://newfarm.org/farmlocator/index.php State OEFFA (organic), http://www.oeffa.org http://ec-ohio.com/index.php (Green) ODA, http://ohioproud.org Our Ohio, http://ourohio.org Local Search State and regional farm directories Local Food Directories. (2006). ATTRA The National Sustainable Agriculture Information Service. http://attra.ncat.org/attra-pub/localfood_dir.php
38	Promotions - Social Media Top 10 Opportunities (image/tags) 1 ‘Basic’ Communications 2 Forums & Blogs 3 Podcasts (Sharing audio+) 4 Sharing Photos & Videos 5 Social Networking Sites/Professional… 6 Collaborative Tools 7 Online Events 8 Virtual Worlds 9 Mash-Ups More… Social Bookmarking & Tagging, Widgets, Gaming, Polls & Surveys, …
39	Promotions Bringing Ideas Together Example: Contests gets your message out at other retail locations easy to sign up cooperators added value for customers inexpensive
40	Promotion Incentives to Buy Other corn maze coupons to local charity boards; charity auctions; volunteer groups plan samples (tasting); demonstrations (how to carve a pumpkin); contests (best photo) print and market gift certificates
41	Creating the experience / Story –What’s Unique -Memorable?
42	Your story…
43	Promotions (Benefits vs. Features…Relationships) Who? Right Audience/s What? Right Message Attention—Interest—Desire—Action (Lavidge and Steiner, 1961) When Right Time, Frequency (4-9x), Consistency Where Right Place, Media Choices How Much Right Budget (leftover money, % of sales,…
44	Promotions Manage all points of contact with your farm, products and services!
45	Challenges Buyer Demographics Psychographics (values, attitudes, interests, …) Prospect, Customer, Friend, Fan, … Decision Process Other Influences
46	Your Plan Marketing Plans (Story) Section 1: Marketing Summary (opportunity/solution) Section 2: Business & Situation Section 3: People: Target Markets/Trade Area Section 4: Products & Services (pricing, packaging) Section 5: Places (distribution) Section 6: Promotions (competitive advantage) Section 7: Sales Forecasts & Assumptions Section 8: Measures of Success
47	Personal Goals Direct Marketing To make $? To expand an existing business? Diversification/Risk Extended Season/Cash Flow Volume As a way of life? For social interaction? Other reasons?
48	Planning & Management What you want? What is the current situation? Existing (“Audit”) –what is / is not working Develop objectives, goals and plans
49	Marketing “Audit” Who do you serve? What do you know about them? What do you market? Products/Services – Benefits How do you communicate? Level of effectiveness Comments
50	the tough questions… external - customers… what is your customer really buying? what is the buying experience – from contact to ‘see you again soon!”? how does it make customers feel? what is important to your customers? what do customers like? how do customers perceive you?
51	the tough questions… internal - the farm… what is the wow about your farm? what is the biggest strength of the farm? what does the farm value? what do family members/employees believe about the farm?
52	Plan Business, Industry, Situation
53	Plan - People
54	Plan - Products & Services
55	Plan Promotions
56	Plan Strategies
57	Marketing Measures Sales (Units, Timing, $ – gross/net) By the hour, day, week, week in a month, month, season, year – How much did you sell… didn’t you sell? People Customer mix, Frequency of visits/purchase Products (pricing, packaging) New Product, Cross-sell (or bundle products) Extended Season, … Product profitability Places Promotions Awareness, Trial Source and cost per lead, Conversion of lead to sale % Other KEY DRIVERS (impact profitability, goals)
58	Plan Sales Forecasts & Assumptions
59	Plan Measures of Success
60	Decision Making The Decision Environment Amount, Quality, Evaluability, Time constraints High degree of uncertainty due to change & multiple factors Intense emotion, commitment, responsibility, etc. Potential Biases Frame Blindness: Wrong question/problem Confirming Evidence: Seeking only info. to supports pt. of view Status Quo: favoring alt. that perpetuate existing situations Sunk Costs: Making choices in a way that justifies past choices – continuing to invest regardless of new information Multiple choice affect (willingness to pay – 1,2,3 option/s) Is decision framed in terms of + (gain) or - (loss) Group Failure To Do (Hammond, Keeney, & Raffia, 1998) Be aware of biases / Question assumptions Seek multiple perspectives / Make incremental decisions
61	Resources Business Planning Tools (note) Business Plan Template Cash Flow Projections Worksheets Profit & Loss Statement Worksheets Loan Calculator http://tobaccodiversification.osu.edu
62	Resources Agencies & Organizations USDA Farmer Direct Marketing, http://www.ams.usda.gov/directmarketing Direct Marketing Business Management Series, http://www.attra.ncat.org/attra-pub/directmkt.html SARE Direct Marketing Resource Guide, http://www.sare.org/publications/dmrg.htm AgMarketing Resource Center , http://www.agmrc.org/agmrc/default.html http://www.nafdma.com/FMC
63	State Resources Governor’s Food Policy Council Food System Assessment Agriculture Viability Healthy Food Access Market Connections Amalie Lipstreu Senior Program Manager Sustainable Agriculture, ODA ALipstreu@agri.ohio.gov http://www.agri.ohio.gov/divs/FoodCouncil/foodcouncil.aspx#tog
64	State Resources Listserv of local food and farming locfood@osu.edu Ohio Department of Agriculture www.ohioproud.com Ohio Farmers’ Market Managers Network http://ohiofarmersmarkets.osu.edu To help local entrepreneurs preparing value-added foods: www.foodindustries.osu.edu OSU Local Food Research http://sri.osu.edu/ Tourism, http://industry.discoverohio.com
65	Resource: General Marketing Associations & Publications American Marketing Association, http://www.marketingpower.com Direct Marketing Association www.the-dma.org Promotion Marketing Association, ww.pmalink.org Marketing Research Association, www.mra-net.org
66	Next Steps Find customers - Your plan/habits to know: Current Customers / Prospects (who you sell to/who else you want to sell to) Consumer & Community Trends – Opportunity Competition (who sells to them now?) Reach customers Your marketing strategies & tactics to reach ‘targets’ Create the experience & Measure what matters Keep customers Customer relationships (CRM) / Loyalty Ladder Market in 3-D: function, process, relationship benefits Remember … Life Changes – yours & the customers
67	Contact Julie M. Fox, Ph.D., fox.264@osu.edu Direct Marketing Specialist The Ohio State University South Centers College of Food, Agricultural, and Environmental Sciences - Extension & OARDC 1864 Shyville Rd. Piketon, OH 45661 Tel: +740.289.2071 Fax: +740-289-4591 http://directmarketing.osu.edu Julie Strawser, strawser.35@osu.edu (ext. 223)