The production skills of our farmers are legendary. Yield levels achieved by South African producers in this water-stressed region of the world say it all. But while high levels of production are vital, a business, like a table, stands on four legs, and the weakness of any one results in a wobble or even a collapse.
In addition to production, there are finance, people, and marketing to be managed, and bitter experience has shown that the marketing leg is the one that most often is the cause of failure.
The crucial starting point of any skilled marketing effort is the correct choice of target market. It needs research, creativity and deep understanding of the entire value chain (see Managing for Profit in the 5 July issue of Farmer’s Weekly).
Once the market is selected, much like a cordon bleu chef who carefully chooses and blends ingredients to make a great meal, the marketeer does the same with what is collectively referred to as the ‘marketing mix’.
Remember that while the quality of the physical item you produce, be it eggs, oranges, cabbages, asparagus or any other, is obviously crucial, your ‘total product’ is far more than just this.
It includes the packaging, the means of delivery, the reliability of supply, promotion, and much, much more.
Let’s have a look at the marketing mix toolbox.
The ‘four Ps’ checklist
Way back in the 1960s, it was recognised that marketing was a much more complex activity than simply selling.
Prof Jerome McCarthy at the University of Notre Dame in the US coined the term ‘marketing mix‘ to refer to all the options available to get the job done.
He developed a checklist, which he called the Four Ps, which has stood the test of time and is as relevant today as it was decades ago. You need to use it to plan your marketing mix.
Here it is:
1. The ‘product’: the right one for the target market: This is the tangible physical item. It is the branding, packaging and contents, specifically designed to fill the needs of the customer.
Remember, the product needs to be attractive to all members of the supply chain, not just the final consumer. How does the transporter see it?
What about the wholesaler, who will have to break down the pallet, and the retailer, who will have to extract the item from the bulk pack and dispose of the packaging? Each one of them is a customer with different needs, and each one has to be satisfied.
2. The ‘place’: a shortcut term for the route to reach the target market: How does the product get into the hands of the consumer? The choice of outlet (wholesale, retail, direct) and the choice of transportation and storage are all part of this. Choose carefully and select a route consistent with your product.
For example, note the people shopping at Fruit & Veg City and the way the store merchandises its products.
Then visit a Woolworths store and do the same. They have very different target markets and match their marketing mix to the target.
3. ‘Promotion’: telling and selling to the customer: This addresses the way you communicate with customers. It’s not only advertising, but the full range of communication methods such as social media, sales point promotions, sponsorships, corporate image communication, social responsibility, mass media, and even the sign on the farm gate.
4. ‘Price’ the right price: This must be right for the market, and it may not be the lowest. It’s not only the price to the final consumer, but covers the retailer’s margin, volume discounts, special promotional rebates, and the myriad other price-related incentives available.
You need to make use of all the tools available in the Four Ps tool box in order to make your product stand out from the crowd. It’s called ‘differentiation’.
But, do I hear you say, “I am a farmer, producing maize, milk and beef. What chance have I got to use the marketing mix to enhance my product? Surely an apple is an apple and an egg an egg, and no amount of creativity is going to change this fact?”
This must be right for the market, and it may not be the lowest. It’s not only the price to the final consumer, but covers the retailer’s margin, volume discounts, special promotional rebates, and the myriad other price-related incentives available.
You need to make use of all the tools available in the Four Ps tool box in order to make your product stand out from the crowd. It’s called ‘differentiation’.
But, do I hear you say, “I am a farmer, producing maize, milk and beef. What chance have I got to use the marketing mix to enhance my product? Surely an apple is an apple and an egg an egg, and no amount of creativity is going to change this fact?”
Peter Hughes is a business and management consultant.
