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Re-Cap Session 1
One thing you learned about business planning or yourself?
Values – Vision – Mission – Goals - SWOT
5 P’s of Marketing
• Product• People• Price• Place• Promotion
Anytime one of these “P’s” changes, it should trigger a review of all the other “P’s”
ProductA bundle of attributes (features, functions, benefits, uses) capable of exchange and/or use
Products exist to satisfy an individual or an organizational objective
Know your audience and be able to communicate your “product” effectively
• Usage: the physical use of a product
• Service: an intangible benefit (can be measured but not easily)– The brand experience
• Some Examples of Each….
Satisfying Needs
Product Features• Taste• Color• Size• Raw materials• Style• Purpose• Value• Nutritional Claims• 3rd Party Acreditation
• Reputation• Social Value• Life cycle• Classification• Place of Origin • Quantity• Image
Place•What type of buyers do you
have the capacity to serve?
•Where are the buyers that demand YOUR product (how many do you need)
Place- Distribution Strategy
• Inventory Capacity: Can we store items with minimal shrinkage
• Distribution Alternatives– Direct to Consumer (by the unit) – Intermediary (cases, pallets, tons)
Place- Distribution Strategy
Successful Outlet
Selling Price Matches Cost to Serve
What is Missing?
Logistics (order,
delivery)
Product Match
Terms of Payment
Alignment with
Mission
Risk and Uncertainty
Investment Required
Promo Effort
Time/Labor to Serve
Sales Volume
Price• A variety of strategies can be used to set prices, “Are you a price maker or price taker?”
• Pricing must balance your internal costs and customers willingness-to-pay/market demand
Pricing Strategies1. Competitive Pricing: What are others
charging?a. Relative Pricing/Signaling: Setting above or
below similar products.
2. Cost Oriented: Know your costs
3. Penetration Pricing vs. Skimming a. Breaking into a competitive market: Penetration
b. No competition: Skimming
4. Examples Today: Carrot vs. Eggs vs Sheep Cheese
Pricing Strategies
3. Penetration Pricing vs. Skimming a. Breaking into a competitive market: Penetration b. No competition: Skimming
4. Examples Today: Carrot vs. Eggs vs Sheep Cheese
Strong Marketing Plan
-The 5 P’s need to be connected
-Common Pitfalls:- Overestimating “local” markets (over diversification vs.
competitive expansion)- The mis-match of “middle class” values and “upper-
class” products- Failing to recognize how your
operations/technology/systems impact on your capacity to serve certain markets
BroilersPlace Product Price Attributes
Direct to Customer
Whole Birds ? “family farm”Free-range?Hormone Free?
To Retail Boneless Breast
Parts
(Less than 20% poultry sold as whole birds)
“local” means more than “organic” from recent surveys
Fluid MilkPlace Product Price Attributes
Direct to Customer
½ gallon $7-$10/gallon
Raw
St. Albans Coop
cwt Variable$21.09 (Oct 2012)
Protein: $3.72Butterfat: $2.11Butterfat $0.43Cell Count PremiumsPPD:distance
Red PotatoPlace Product Price Attributes
Direct to Customer
Quart container
$3.99/each Pretty, well washed, “new potato”
Distributor .5 ton or 1 ton delivery:
$780/T Organic
Market Research
• Paperword Ranks Highest• Perceptions on Plastic, right or wrong• Do it right! full size stickers or blank cartons
Market Research
Currently collecting responses from retail grocers in New England.
•Attributes that Matter•Whole Birds and Parts•Service Required•Demand and Price Considerations
Market Research
• 19 stores responding as of 10/12/12– Range from 900 sq feet to 33,000 sq ft– How they define local: in state or up to 30-100
mile radius – A good deal of variation between small and
large stores
Market Research
• Meat Chicken:- Cuts as a Percent of all chicken sales
- Whole (15%) , Boneless Breast (41%) , Legs and Thighs: 28%
- Average Number of Weeks Product Required- 15 - 20 weeks (range of 2 – 52 weeks)
- Demand:- 7 of 8 stores indicated a need for more local suppliers of chicken
parts
- Largest Constraints to Sell more Chicken- Price (7 responses) , Supply (4), Cooler Space (2)
Market Research
• Eggs:- Weekly Sales
- Range from 50 dozen to 2,000 dozen per week- 9 out of 12 stores sell farm run, ungraded eggs
- Average Number of Weeks Product Required- Range of 2 – 52 weeks, but the most common response was 10-15
weeks
- Volume required to be a viable supplier:- 50 dozen: this is for stores selling 400-900 dozen per week they
indicate- Some stores indicate 5-10 dozen (small stores)
Next weekMarketing, Part 2•Define target customer/market region•Define your competition•Market research – Primary & Secondary•Consumer trends to consider•Wrapping up the marketing chapter
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