Essays /

Candidate Essay

Essay preview

MARKET ANALYSIS: MARKETING PLAN
Robin G. Brumfield, Specialist in Farm Management
E-mail: [email protected]
Website: http://aesop.rutgers.edu/~farmmgmt

Without customers, the business does not exist. A marketing strategy or plan is about defining the customer or target market and tailoring the product, pricing, distribution, and promotion strategies to satisfy that target market. Greenhouse businesses that are product oriented—those that try to sell what they can produce without first looking at customers’ needs—risk growing plants and flowers that will not sell at a price that will produce a profit. Instead, most successful greenhouses are customer oriented—they design marketing strategies around the needs of their customers.

A marketing plan is the engine that drives the business. A marketing plan describes what the firm will market and how it is unique (product); how and when the firm will market the product (distribution and packaging), to whom (target customers), and for how much (price) the firm will sell its products; and how and what the firm will communicate to the customers (promotion). This includes what has been called the four Ps of marketing: product, price, place (distribution), and promotion.

Developing a marketing plan will help managers confidently answer the following questions: 

Markets: Who are the target customers and what do they value?

Product: What product will be offered and how is it unique?

1

Competition: Who are our competitors and how will we position ourselves to compete? Are there threats from new entrants?

Distribution: How and when will we move our product to market? What market channel will we use?

Packaging: How will we present the product to the customer?

Prices: How will we price our product? What is the perceived value of our product to the consumer? Is our price in line with the market’s perceived value?

Promotion: How and what will we communicate with buyers or customers? Do we have a marketing strategy with appropriate promotional, advertising, and branding strategies in place?

Markets: Who are the Target Customers and What Do They Value?To fully define the target market and corresponding marketing strategy, the firm will need to identify the target market segment (who the customers are and what they value) and sales potential (how much customers are willing to buy). Target markets are most commonly characterized as either individual households (direct marketing) or businesses (wholesale marketing). Direct marketing tends to be more profitable than wholesale marketing because of value-added opportunities and the lack of middlemen. Market channels are discussed in Chapter 16. Developing customer profiles or segmenting the market can help determine if a market segment is large enough to be profitable. By identifying and targeting specific market segments, a firm can also develop more effective packaging, price, and promotion strategies.

Market Segments
Markets can be segmented in a variety of ways. The most common form of segmentation is by 2

demographics (age, gender, income, race, ethnicity, disabilities, mobility [in terms of travel time to work or number of vehicles available], education, home ownership, and employment status). A market can also be segmented geographically, for example, domestic and international subgroups, various neighborhoods where consumers live, or location of different stores owned by wholesale buyers. Another common way of segmenting markets is by psychographic characteristics (attributes relating to personality, values, attitudes, interests, hobbies, or lifestyles). Another important question to ask is, what are the customers’ needs? This applies whether the product is going directly to the final consumer or to an intermediary. Do they need convenience? a particular size? Sunday delivery? unique products? high-value products? large volumes?

Size of the Market
To begin a business, producers need to ask, How many potential customers are there? How often and how much will they buy? What is the total size of the market? Is the market emerging, growing, or shrinking? Will this market yield a high-enough volume of sales? Analyzing USDA statistics, visiting potential buyers, and attending industry and university educational meetings to learn and network are good places to start answering these questions no matter what market channel is selected.

3

Wholesale deliveries are usually kept to a distance that a truck can deliver and return in one day, or about 200 miles. New producers will want to visit potential customers (usually another business). These customers will probably be willing to indicate how much they would be willing to buy short-term (one to two years) through either a written contract or a verbal agreement. Projecting long-term sales potential may prove more difficult. Projecting sales potential can be even trickier for direct marketers. As a general rule, 75 percent of direct market customers of a business will live within 20 miles of the business. Using this rule of thumb, a simple way to project direct market sales potential is to locate the business on a county map and draw 25- and 50-mile-radius circles around it. The manager can count how many towns or cities fall within the circles and add up the number of potential households in the nearby cities. These households represent the core potential customers. Then, with a feel for the number of potential customers, the manager can estimate the potential value of sales per household. This is the sales potential. The next step is to estimate the number of customers in each segment and project their weekly, monthly, or annual purchases. These sales estimates can come from household or county purchasing records (available at the public library), from the firm’s own surveys of potential customers, from in-person interviews, or from secondary sources, such as New Strategist Publications’ Household Spending: Who Spends How Much on What. Many businesses find it useful to hire a marketing consultant to develop surveys, lead focus groups, or conduct telephone interviews. The local Extension service or state Department of Agriculture may be able to assist in locating qualitative and quantitative information for a customer profile. They may have already done some studies that could be helpful. The Small Business Administration may also provide assistance. The Sustainable Agriculture Research and Education (SARE) program has a

4

competitive grant program for farmers and may be willi...

Read more

Keywords

/). /~farmmgmt 0.40 000 098 1 1.12 1.91 1.92 10 100 11 12 126 13 13.65 14 15 15.9 16 17 170 18 19 1986 1990 1991 1995 2 2.43 2.63 20 200 2007 2008 2009 2010 22 227 25 27 3 3.24 3.4 3.69 30 308 31 311 316 32 340 356 357 359 363 37 383 4 417 44 444 45 454 47 48 491 5 5.6 50 510 53 545 57 6 63 632 64 660 664 668 676 685 6th 7 71 73 739 748 75 8 81 83 836 9 91 924 953 954 956 abil abl access accord account activ actual ad adapt add adjust administr advanc advantag advertis aesop.rutgers.edu aesop.rutgers.edu/~farmmgmt affect afford age agre agreement agricultur aim alloc almost alon alreadi also altern although alway america among amount analysi analyz and/or annual anoth answer appeal appear appli approach appropri area around arrang articl ask assist associ attempt attend attitud attract attribut avail avenu averag awar away back bar bargain base basi basket becom bed beef begin behind below-cost bench/bus/subway benefit best better big billboard billion biodegrad bit block blog bloom books/directories bound box brand bring brochur broiler brumfield [email protected] budget build built bulb busi buy buyer calcul call campaign candi candid cannot capit capita captur car card care carri case cash categori ceil cent center certain chang channel chapter character characterist charg cheaper check choic choos circl citi clean clear close closer club code color come commerci commit commod common communic communiti compani compar compet competit competitor concentr concept concern condit conduct confid conscious consid consider consist constant consult consum consumpt contact contain continu contract control conveni cooper core corn correspond cost cost-ori cost-plus could count counti coupl coupon cours cover cream creation critic crop crucial cultiv current custom cut cycl dairi date daunt day day-end decis decreas deer deer-resist defin deliv deliveri demand demograph demonstr depart depend describ design detail determin develop differ differenti difficult direct disabl disadvantag discount discretionari discuss diseas display distanc distinguish distribut diversif do-it-yourself dollar domest done draw drive durabl e e-mail e.g earli eas easier easili ecofriend educ effect effort either elsewher emerg emphasi employ encourag end engin enjoy enough enter entertain entir entrant entri environment equal especi establish estim ethnic even event everi everyth exact examin exampl exceed excess exchang excit exclus exercis exist expect expenditur expens extens extra extrem facebook fail fair fall farm farmer farther feel fewer final find firm first fit fix flexibl floor floricultur florida florist flower fluctuat flyer focus foliag follow food forc form forth found four four-hour free frequent frequent-buy fresh fulli function fund g gain garden gender general geograph give go goal good grade grant green greenhous greenjean ground group grow grower growth guarante hand handl hang hear help herbac high high-enough high-qual high-valu higher higher-qu highqual hire hobbi home homeown horticultur hour household housepl howev idea ideal identifi imag imagin impact import improv in-person includ incom incorpor increas incred independ indic individu indoor industri inform initi insect instal instanc instead integr intend intens intent interest intermediari intern internet interview invest invoic involv jersey keep kept key kid kind know knowledg label lack land landscap larg large-scal larger largest last later launch lawn lead learn less let librari life lifestyl limit line list littl livabl live local locat logo long long-term look low lower lowest luxuri made magazin mail maintain mainten make manag mani map mari market market-entri mass match materi matter matur may mean media medium meet messag method mid mid-siz middlemen might mile mile-radius million minim minor mistak mobil money month moreov morn move mrs much multi multi-unit must name nation near nearbi need neighborhood network new newslett newspap next nich note number nurseri nutriti obtain offer often one open opportun option oregon orient other outdoor outlet outset overinfl own owner ownership pack packag paid pamphlet part particip particular pay payment peak penetr peopl per perceiv percent percentag percept perenni perform period perish person phenomen pick place placement plan plant plastic player plus poinsettia point point-of-purchas posit possibl postharvest pot potenti predatori prefer premium prepar present preserv press prestigi prevail price price-competit primari probabl problem process produc product profession profil profit program project promis promot propag properti proposit protect prove provid ps psychograph public publish purchas pursu qualit qualiti quantit quantiti question quick race radio radius rais rang rank rapid rate rather rational reach readi real realist reason rebat receipt receiv recess recognit recommend record recov recycl reduc reduct refer reflect relat relationship releas reli reliant remain remind remov renter repres requir research resist respond respons result retail return reuseabl right risk robin rule run sacrif sale sampl sare satisfi satur save say scale schedul scheduling/handling scope season secondari section secur see segment select self self-reli sell seller send sequenc serv servic set sever share sheet ship shipment short short-term show shown shrink signag similar simpl simpli sinc site situat size skill skim slow small small-scal smaller smell social sod soil sold someon someth somewher sourc soybean space special specialist specif speed spend spent spite sponsor sporad staff stand start state statist status stay step still stock stomach storag store straightforward strategi strategist strength strive structur struggl studi subgroup subject success summari sunday suppli supplier sure survey sustain switch tabl tailor take taker talk tap target task tast teach telephon televis tend term testimoni thing think thorough threat thumb thus time top total touch town tradeshow travel tremend trend tri trickier trip truck true truli tweet twist twitter two type typic u.s unconnect undermin uniqu unit univers unlik unlimit unusu upon upscal us usda use usual valu value-ad vari variabl varieti various vehicl verbal versatil version versus vision visit volatil volum want war way weak web websit week well well-capit whether wholesal whose wide widespread will willing wilson wine within without won word work worker worth would written www.garden.org www.sare.org www.sare.org/). yard year yet yield youtub