Value vs price

To many farmers and market agents, price is all that matters. Of course price is important, but these days there’s a lot more to the equation.

Value vs price
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Firstly, there’s competition.

Be it on the market floor or on the retail shelf, branding separates producers and their products as never before. Secondly, there’s the age-old issue of value for money. Research shows that price at retail level is no longer the main buying decision for consumers.

If they want to maximise their investment in a product, buyers need far more than just a good price – they need value in the form of better shelf-life, improved flavour, more variety and food safety, to mention only a few characteristics.

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The buyer’s ideal is a brand or product that gives him or her the best value at the best price. You can always find cheaper products on a market, but the old saying ‘Goedkoop koop is duur koop’ (buying cheap is expensive) holds true. You definitely won’t be getting value for your money.

Even for buyers who are not reselling to the consumer, the test of value versus price applies. Be they exporters or caterers, they need to compare price against value.

If, for example, their purchases on the market have to be transported over long distances, shelf-life becomes a key requirement. This implies good quality as well.

These buyers remain sensitive to price because of the added transport cost, but in the end they have to weigh that against the value they’re getting for their investment. They will probably pay a higher price in the interest of getting better quality and shelf-life.

Good reputation

Top brands on a market illustrate this well. They sell for premium prices because buyers know they are getting a value-for-money product. In many cases, the price is hardly a factor – the reputation of the brand and its value-for-money proposition swings the deal.

Those who believe that price is the ultimate objective need to revisit their ideas about fresh produce marketing.

Michael Cordes is an agricultural journalist, consultant, trainer and former farmer.