Better Decisions: Will you sell it if you sow it?

Sunday, October 5, 2008

Only by making continual efforts to understand your buyer's needs or what is affecting the marketplace can you keep ahead of the curve in today's fast-changing business world

by DORENE COLLINS

Finding out consumer wants and needs are crucial, whether you are a multinational company producing consumer goods or a farmer serving the agri-food sector.
Billions of dollars are spent annually to find out how to market goods and services effectively to consumers, and market research firms seek out consumer input through informal observation as well as comprehensive surveys and focus groups. 

Agriculture production in Canada has evolved to be one of the most efficient and productive in the world. However, the ability to find suitable markets is just as important as producing high quality agri-food products. The movie "Field of Dreams" contained the famous statement: "If you build it – they will come." Many of us still use that thinking today in growing or starting a farm business venture. A better script might be: "Will you sell it if you sow it?" Or is there a market for the products produced on your farm?

In today's competitive marketplace, producers have to balance the time they spend on production, finances and marketing. Gone is the era when producers could count on a consistent market or buyer for their product or service. Changing consumer demands, local and global competition along with other forces have resulted in the business of agriculture moving from being production-focused to market-focused.

So how do producers keep ahead of the curve and become savvy marketers in order to anticipate and prepare for market changes? First of all, you need to make continual efforts to understand your buyer's needs or what is affecting the marketplace. Secondly, seek expert advice and resources to help make wise marketing decisions, and thirdly develop and adhere to a written marketing plan.

Sound challenging? It's easier than you think.  Here are some key planning principles from "Growing Your Farm Profits – Planning for Business Success," a business assessment and action planning program developed in partnership between the Ontario Soil and Crop Improvement Association and the Ontario Ministry of Agriculture, Food and Rural Affairs (OMAFRA).

Planning Principle No.1. Make sure there is a market or market potential for your product or service. Market research and training are positive steps. Talk to other producers, attend related training sessions, conduct informal research by using a number of different tools, including publications, the Internet, related associations and individuals. 
Planning Principle No. 2. Build networks and relationships to capture profitable marketplace opportunities.

Marketing is all about relationship building. Begin with your own marketing team on the farm through to the end user. Your team should know that you are looking for new opportunities. Meet and discuss your plans and ideas so that each team member can keep an eye out for opportunities that are well suited to your operation.

Building strong business relationships with buyers, distributors, retailers and consumers will be a valuable investment of time and energy and give you the edge both in determining where industry opportunities exist and in anticipating threats to your existing business.

Customer relationship marketing is also vital to ensure that the consumer becomes loyal to your product or service. Loyal customers are often responsible for 80 per cent of your sales and are great ambassadors for your product or service. Listening to your customers and interpreting their comments, thoughts and ideas can result in subtle changes to your business which can yield significant results.

You can build better relationships whenever you have contact with any of your marketing partners. Involvement in trade associations, local business associations and the local community are great ways to be connected. Look for opportunities to talk with other business people, so you become aware of potential opportunities and threats that might concern your own business.

Planning Principle No. 3. Benchmark to remain competitive and profitable in the marketplace.

Marketplace acceptance and subsequent sales affect every aspect of your business. In developing a marketing plan, you must look at your current success in the marketplace and future opportunities, so you can adapt to new marketing strategies or enhance existing ones.

Benchmarking and feedback from the marketplace (financial outcomes, consumer surveys, product and service placement and testing) can tell you if you are on the right track or if you need to contract additional marketing expertise to grow the business.

Calculate your profit margin per unit of product or service. Monitor your sales volumes and compare them to previous experience. Track sales differences between different market channels. Ask or survey your customers about how you can improve your product or service delivery. And find out why people prefer your competition's products or services.

There are resources available to help you do this.

Visit the OMAFRA Business Management Unit website at: http://www.omafra.gov.on.ca/english/busdev/agbusdev.html
Subscribe to our OMAFRA Agricultural Business
Update Newsletter at: http://www.omafra.gov.on.ca/english/
busdev/news/index.html#agbus

Watch for upcoming workshops on "Growing Your Farm Profits – Planning for Business Success" and "Growing Your Opportunities – Value Plus" to assist with your business planning and marketing needs. (More information can be obtained at 1-877-424-1300, (519) 826-4047 or by email at ag.info.omafra@ontario.ca 

Having a sound marketing plan for the products and services you produce on your farm will help both in the short-term and long-term success of the business. BF

Dorene Collins is Marketing and Customer Service Program Lead
with the Ontario Ministry of Agriculture, Food and Rural Affairs. Email:dorene.collins@ontario.ca