Marketing Impacts Your Farm Business Success
The marketing of your cattle or beef has a direct impact on your overall business success. In fact, one of the biggest mistakes made in running a business is producing a product without researching if there is an actual market for it. Success comes in finding ways to encourage the market to choose your product first. Marketing is an ongoing process of understanding your customers/buyers needs and striving to fulfill those needs better than your competition. Marketing is everything that happens before and after the sale that facilitates both current and future sales transactions with your customer/buyer. Unless you have a good knowledge of the sector you operate in, and how your product fits into that sector, it is difficult to focus on anything other than production. Changing consumer demands, local and global competition and other market forces have resulted in the business of agriculture moving from being focused on production to being market focused.
Understanding the marketplace is the first step in positioning a successful product for profit. Market research or an analysis of the marketplace is vital before starting a new business, introducing a new product, maintaining your existing business, or discovering why the demand of your product is declining. Knowing and anticipating your customer's/buyer's needs is important. The challenge for producers is to stay ahead of the curve to anticipate and prepare for marketplace changes.
Through the market planning process, the five P's of marketing need to be considered. The task is focusing on the answers from the marketplace/customer to the various questions posed. The opportunity becomes establishing a customer relationship as opposed to just making a sale. Here are the five P's with some sample questions with cattle or beef being the product:
- Product - How does your product satisfy the customer's needs?
- Positioning - What is unique about your product compared to your competitor and how does this create a target market for you?
- Place - What is the place or distribution channel that makes your product available to the customer? Are there alternatives?
- Price - The price of the product must balance the value or benefit to the customer with profit or return to the seller and be competitive with the competition. What are the price risks and are there opportunities to manage price risk?
- Promotion - What information and methods can be used to promote your product?
Marketing should focus on the objective(s) you want to achieve in your marketing plan. Market planning will consider what and how much is produced, when it will be available to market, where it will be sold, and the cost to produce it. Understanding the strengths and weaknesses of the marketing channels available is a key step in market planning. These factors impact the business plan through the cash flow. A marketing plan is like a road map since it provides the details, responsibilities, and actions for marketing your cattle or beef. This minimizes the guesswork and emotion when making key marketing decisions.
So what can be done to facilitate marketing? Besides the prior items discussed, the following list has seven action points to consider:
- Develop and maintain an understanding of your market trends, impacts, and how it functions
- Explore and evaluate alternative market opportunities
- Assess your marketing skills and abilities to define your training needs
- Determine your cost of production and profit margin
- Foster and build relationships within the value chain
- Develop a network of market information resources and services
- Benchmark and monitor your marketing plan
If you are looking for marketing resources, check out the marketing
section at www.ontario.ca/agbusiness.
Further marketing resources are also listed under the Grow Your
Farm Profits section.
For more information:
Toll Free: 1-877-424-1300
|Author:||John Bancroft - Market Strategies Program Lead/OMAFRA|
|Creation Date:||10 July 2009|
|Last Reviewed:||06 March 2012|