Marketing

Lara L. Worden Area Agriculture Agent NC State Cooperative Extension Serving Catawba, Cleveland, Gaston, & Lincoln Counties

What is Marketing?
Transactional Marketing
transaction for profit a sale is one time event increased profits = increased sales & lowered costs seeks to grow a business by cultivating loyal, repeat customers and by word of mouth advertising to help recruit new customers

Relationship Marketing

What is Marketing?
Marketing is EVERYTHING you do to promote your business, from the moment you conceive of it to the point at which customers buy your product or service and begin to patronize your business on a regular basis.
The key words to remember are everything and regular basis.
- Jay Conrad Levinson

Guerrilla Marketing

What is Direct Marketing? Direct marketing is selling directly to the end consumer.

The Marketing Mix

The 4Ps and the 4Cs

The 4 Ps of Marketing
Product
Place Price
needs to standout, why buy your product over someone elses?

where you market is has as much to do with how you market cost of production, break-even analysis, competition, what will the market bear

Promotion
everything you do to sell your product; can mean the difference between success and failure

The traditional 4 Ps of Marketing matter. They are the four areas in which a producer can make changes. But the challenge is to get beyond them to the 4 Cs.

The 4 Cs of Marketing
Product = What the customer wants/needs

What does the customer want???

Place = Convenience

Customer
Price = Cost to User Promotion = Communication

Customer Wants
or even tomorrows

Not yesterdays buzz, but todays

i.e. Food Buying and Healthy Living Trends 2011
Local Food Rocks! i.e. Rediscover the Butcher, the Baker, & the Cheese Maker Fresh is Better! (follow European counterparts) i.e. Renewed interest in Food Preservation Canning Comeback! i.e. Chefs in Schools Serious about feeding our youth healthier, better quality foods!

The wrap-around, the bundle No confusion, no contradictions

Farmers Market Growth: 1994 - 2011

Convenience to the Customer

When they want it, the way

they want it, how they want it ready to use Time is a lot more than money these days Beyond placement to instant accessibility

Cost the Value that the Customer sees being met

Yes built on

Costs/Competition/Communication/ Breakeven/What the market will bear, but Can you express/sell the Benefit of your product? (Benefit to the customer)

Features vs. Benefits

Size, Quality, Varieties, Price, Types, Materials

Features Benefits

Health, Convenience, Social Status, Security, Time Savings

PEOPLE BUY BENEFITS, NOT FEATURES!

Communication
When is a tomato more than a tomato
Understand and communicate back to the customer the attributes the customer is looking for; Advertising and Word of Mouth matter Display and Merchandising matter Image projection matters!!!

Online Newsletters/Blogs

Displays/Image Projection are Important!

Where to Start???
1. Determine what people want (the new buzz; DO NOT produce what everybody already has; e.g. produce in off season) 2. Find or create products that satisfy their wants 3. Select the most effective means of communicating with people about the product and its benefits 4. Develop strategies that will create a desire for the product in prospective customers who have not actively expressed their wants

Defining the Market

1. Identify your customer profile 2. Identify your market area 3. Determine the number of people in your market area who potentially match your customer profile. 4. Determine the market potential for your business in your trade area.

Customer Profile:
Demographics
Age Gender Location Education Occupation Income Level Martial Status Kids?

Customer Profile: Psychographics

Needs and Values Buying Styles Cultures
Security, esteem, love, acceptance, understanding, beauty, good health, status, success, simplicity, altruism
Price, fads, quality, technology, luxury, convenience

Modern, traditional, artistic, religious, liberal, conservative, environmentally aware Early/late adopter, passive or active, work or pleasure

Attitude Towards Technology

Interests

Sports, reading, fitness, cooking, travel, gardening, outdoors, online activities

Age Subcultures
GI or WWII Generation (before 1933) accounts for 10% of population, mostly over age 79 Swing Generation (19341945) 12%; 67 to 78 Baby Boomers (1946-1964) 25%; 48 to 66 Generation X (1965-1976) 17%; 36 to 47 Millennial Generation (1977-1995) 25%; 17 to 35
American Generations by Susan Mitchell, 1998

GI WWII Generation
Born before 1933 10% population today In 2012: 79 years plus In 2015: 82 plus Characterized as frugal spenders Less likely to try new things Less formal education, but more affluent

Swing Generation
Born 1933 to 1945

Only 12% of population In 2012: 67 to 78 In 2015: 70 to 82 Small segment caught between two powerful forces Some have prospered; others have not

Baby Boomers
Born 1946 to 1964 25% of population In 2012: 48 to 66 In 2015: 51 to 69 Larger discretionary income; buy more save less; health conscious Largest generation, raised by younger stay at-home mothers & Dr. Spock (Not Mr. Spock)

Generation X
Born 1965 to 1976 17% of population In 2012: 36 to 47 In 2015: 39 to 50 Well educated, event or experience focused Technology drivers Tend to be big spenders

Millennial Generation
Born 1977 to 1995 25% of population In 2012: 17 to 35 In 2015: 21 to 38 Children of Baby Boomers & Gen X Most culturally diverse Busy, wealthy, the next economic powerhouse

Market Area & # of People

Eight Steps to

Identifying a Market Handout

Google Claritas City-Data.com U.S. Census Bureau

Use the Internet

You are Where You Live - CLARITAS

http://www.claritas.com/MyBestSegments/Default.jsp

You Are Where You Live - CLARITAS

CITY-DATA.COM

Gastonia, NC

Gastonia, NC

Buying is a function of income

Median Household Incomes in counties within 50 miles
Focus in these income zones

Union ($60,074) Mecklenburg ($55,587) Lincoln ($47,859) Gaston ($42,110) Catawba ($43,303) Cleveland ($37,889)

http://factfinder.census.gov/home/saff/main.html?_lang=en

US Census, NC Quick Facts

Location, Location, Location

Proximity to customers Neighborhood Convenience Safety (lighting, off-street parking, etc.) Accessibility (ADA) Visibility Foot traffic, vehicle traffic Other complementary businesses nearby Size / floor plan requirements Lease or own Zoning restrictions Landlord restrictions Costs (property, amenities, required improvements)

What do you know?

Who would buy a similar product or service? Can you describe them in terms of measureable variables, including age, income, education, home value, gender, ethnicity, or zip code? Do you know how often they purchase or use the product?

What do you know?

Do you know why they use the product? How often do they use the product? Daily, weekly, monthly? How much of the product do they use (light, medium, heavy)? Why do they use the product? Health? Prestige? Comfort?

Production Adoption Stages

Early Majority Late Majority

% Using
Innovators Early Adopters

Time

Laggards

Who is willing to pay what price?

There is always a small group of customers who consume/buy a substantial amount of product

Can you identify light (occasional), medium (regular) and heavy (very frequent) consumers of your product?

Call this the 20/80 Rule 20% of consumers buy/use 80% of product. Call them the Heavy Half

Adoption and Use

Are more of the heavy users among the innovators? Are more of the medium users among the early majority, some in the late majority? Are more of the light users among the laggards? Are there some who will never buy/use your product?

Where are my competitors?

Why Analyze the Competition?

Because You Might:
Learn more about what the customer really wants (or doesnt want) Discover unserved niche markets Learn how theyre dealing with new laws, trends, and technology (e.g., green, social networking,
Get ideas for marketing, merchandising, and product mix Obtain valuable advice, support, and information
demand-driven manufacturing)

Because You Will:

Determine whether you have a COMPETITIVE ADVANTAGE

SWOT Analysis
Strengths
What are your business strengths? Competition strengths?

Weaknesses
What are your business weaknesses? Competition weaknesses?

Opportunities
What opportunities are available for your business?

Threats
What threats might you encounter?

From the Internet!

www.localharvest.org

Am I the only one selling it?

COUNTY: www.localharvest.org

No stone unturned!

http://www.ncagr.gov/NCproducts/index.htm

No stone unturned!

http://www.foothillsfresh.com/

ASAP Local Food Guide http://www.asapconnections.org/

Piedmont Grown

http://www.piedmontgrown.org/

In Review
The customer is the central focus of marketing
Identify the ideal market area Is there market potential???
Location, location, location Who is going to buy your product? Who are your competitors? Where are your competitors? How is your product unique? Demographics, psychographics, age, zip code, etc.

Marketing Wisdom
Dont underprice your product(s) Dont try to satisfy all customers Play the role of educator Quality is the #1 job!

The Raw Product

Local, organic, log-grown fresh picked Shiitake mushrooms

The Shiitake Queen

Farm Location: Gastonia, NC (Gaston Co.) Production: 800 pounds per year Goal: Sell 100% of production through direct sales to customer

We need a marketing plan!

Step 1: supply

Step 2: demand

Who are my competitors?

From the Internet!

www.localharvest.org

Farms: 2 w/in 25 miles 5 w/in 50 miles 3 w/in 100 miles

From the Internet!

www.foothillsfresh.com

Where are my customers?

From the Internet!

www.localharvest.org

They shop at Farmers Markets

Within 50 miles there are 58 farmers markets

www.localharvest.org

They eat at fine restaurants that serve local grown foods

Within 50 mi- 2 listing

Also check: yellowpages.com http://maps.yahoo.com local chambers of commerce

Using these searches:

*200 sit down restaurants

*69 caterers

Is there Demand?
Who wants mushrooms?
In the U.S., per capita consumption is 3.65 pounds of mushroomsMushrooms are the sixth leading vegetable in farm receipts, consumers are primarily whites and asians.1
1Lucier,

G. and A. Jerado. Vegetables and Melons Outlook. VGS-304. Washington: US Dept of Agriculture. 2009.

Is there Demand?
Who wants mushrooms?
A heavy user segment is larger families (i.e. households with children under 18 years living at home), as they buy fresh mushrooms significantly more often than their counterparts without children.1
1Fresh

Mushroom Consumer Segment Study. The Mushroom Council. 2005.

Is there Demand?
Who wants mushrooms?
The U.S. is the worlds second largest mushroom producing country behind China. Pennsylvania, California, & Florida are the largest mushroom growing states.1 Popular Mushrooms: White button Crimini Portabella Shiitake Maitake Oyster

1Mushroom

Council Research Report. 2004

Is there a niche?
Niche #1: Foodies! www.foodnetwork.com 2,955 mushroom recipes; 608 are shiitake related/asian inspired.1 Niche #2: Natural Health- Mushrooms (shiitake) may play a role in breast cancer prevention and treatment.2 May have health benefits for immunity and cancer recovery.2
1From: 2From:

www.foodnetwork.com, 2011. http://my.webmd.com/content/article/20/1728_53385..htm

Potential Customers
Population (Within Gaston Co.): 199,673 PRIMARY ETHNIC MARKET White (79%): 160,4891 Asians (1.2%): 24021
1 US

Census, NC Quick Facts, 2005 - 2009.

http://factfinder.census.gov/home/saff/main.html?_lang=en

Where do they live???

Median Household Incomes in counties within 50 miles
Focus in these income zones

Union ($60,074) Mecklenburg ($55,587) Lincoln ($47,859) Gaston ($42,110) Catawba ($43,303) Cleveland ($37,889)

http://factfinder.census.gov/home/saff/main.html?_lang=en

US Census, NC Quick Facts

Results
Competitors? 10 or fewer farms direct marketing mushrooms within 100 miles Customers? Asian & Caucasians with children at home that have above average incomes and are health conscious Market? Farmers markets & restaurants in Gaston, Lincoln, Union, & Mecklenburg counties