Professional Documents
Culture Documents
This section should convice the reader that you know how and where to sell your product.
3. Sales Methods
Discuss advertising and promotion policy; sales force management; sales staffing manufacturing representatives or company sales force; sales area; distribution and sales methods factory direct, dealers or wholesalers; how the sales methods will ensure projected sales levels are attained.
5. Marketing Budget
Show the budget with dollars allocated for advertising, travel, sales balances and commissions, promotional materials, trade shows, samples.
6. Key Assumptions
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Marketing Plan
Market Goals and Objectives At the beginning of this year, White Tablecloth Restaurant in Big City signed a one-year agreement to take no less than $2,500 of Cattle Producers Marketing Coop meat products per month. $ 2500.00 x 12 = $30,000
Marketing Coop has doubled the number of farmers markets it will be attending and estimates at least an 85 percent increase in sales over last year. $37500.00 x 185% = $69,375 Total Restaurant and Farmers Markets: $99,375 The coop is also visiting with All Foods Markets regarding the possibility of moving over $100,000 in product annually through their market in Big City.
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Overall Marketing Strategy The companys strategy is based on being the best at providing what the consumer feels is best for them. Our Only Choice Is What Is Best for You and Your Family is the motto of the cooperative a message owners feel sells the venture to its customers and its member/owners alike. A goal is to capitalize on consumer needs, wants and fears. The company also is building a seamless marketing process that takes the flagship beef products from the pen to the platter, while being guided along multiple inroads of direct and representative marketing routes. The planned advertising slant will be towards making the business and its members good neighbors to their customers, regardless of who they are. Marketing Strategies Farmers markets to build one-on-one relationships and name recognition in the greater Midlands trade area. These markets also utilize sweat equity and create cash flow. Representative sales, such as restaurant and grocery, to build tonnage. Live cattle commodity pass-through contracts to liquidate producer overrun and off-grade. Livestock. Specialty foods and crafts division to supplement owner/member incomes. Willingness to take any seat at the table as long as it is profitable. Pricing Strategy The companys fresh meat products must arrive at the market wearing a label that reflects savings when compared to actual value. Once consumer allegiance is established, there may be some room to move prices upward relative to the competition. Pricing will be such that Marketing Coop products initially reach the consumers hands somewhere in the mid to upper portion of the top one-third of the range for similar products. Dealers and distributors will be encouraged by a pricing system that allows them a margin somewhere in the 33 percent range. Handcrafted items and specially prepared foods will be priced at whatever the local market will appropriately handle.
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Promotion Strategy The promotional goal is to maintain a level of visibility in order to constantly keep moving increasing volumes of product into an expanding trade territory. First, Marketing Coop will concentrate on the core of the greater Midlands area, then move outward in the most opportune directions as they arise. Although present contacts in the grocery and restaurant business are primarily local, the company will use those relationships to gain referrals to more distant markets. Marketing Programs Marketing efforts will focus on getting very close to the consumer and identifying those issues most important to them, and then providing an answer via tailored food products or handcrafted items. The packaging for this years farmers markets activities will include a new company logo, a picture of the farm families who own the cooperative and seasonal gardening tips. Also, there will be instructions on how to use the biodegradable bags made from recycled products to mulch gardens and flowerbeds to slow weed growth. Two of our members have established themselves as weekly regulars on local radio shows. The weekly syndicated radio program Whats New to Eat responded to our letter of suggestion and invited Bernice Aguila to record a feature each week on how to prepare various ethnic dishes that contain Marketing Coop meat cuts. Plus, Andrew Michaels is going to be a panel member on the Buy Local First radio program in Big City. We have signed on as a half-time sponsor for Cy Country College football. Although the schedule is not finalized, the Mobile Cooking and Catering committee is lining up a full season of weekend sampling demonstrations and special events appearances. At least one of the plans underway is to host a High School Tailgate Night at every school in the Midlands region and donate the proceeds to area public day care centers. The company is also continuing the practice of weekly press releases to all greater Midland newspapers regarding issues that speak to the advantages of purchasing certain products ultra-fresh, locally grown foods, produced and processed by local labor using minimum artificial inputs. Finally, Cattle Producers Marketing Coop has purchased 350,000 printed napkins to be made available to Midland area sports booster clubs, church groups, service clubs, businesses or any other interests that may be hosting a picnic, employee gathering or public dinner.
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Future Products and Services The company is exploring the addition of other processed items to offer via the convenience store market. The coop also has studied and quantified how ready access to a commercial kitchen might add to product lines and perhaps even create a source of employment for some of the cooperative member/owners and their families. Pies and baked goods displaying eco-labels and health aspects appear to be promising. Also, the heat-and-serve complete meal market appears to hold some promise. There is the possibility of some contract food preparation done on a scaled basis in a commercial kitchen. Factory and special events catering, improved live cattle marketing agreements, other meat products, narrow niche ethnic preferences and member/owner services are all subjects that are either under study or on the hot list for consideration.
Sales Methods Cattle Producers Marketing Coop sells its products to an ever-growing consumer group. Originally geared toward the local farmers market purchasers, the market has grown to include a much larger geographical area, in addition to a broadening specialty response. The company is selling ultra-high quality and specially tailored attributes in a market segment filled with competition for the middle-of-the-road buyer. The companys approach is to take its product image to higher market ground and make the most of the image of family farmers doing their honest best to make a living in a fair and ethical manner. The focus has enabled the company to discover voids in the market, then add product as needed to fill those voids. Marketing Coop has worked hard to research specialty food providers, emulating their practices and positioning the company to operate in a similar fashion. Last year, the company conducted sidewalk surveys at five of the farmers markets attended by the group. Although selling under the name of Golden Meadow Products at the time, it was clear that consumers identified the group with high quality and excellent value. Changing the name to Cattle Producers Marketing Coop is expected to allow the newly formed value added cooperative to draw those consumer opinions to an even wider assortment of food products and handcrafted items. The restaurant trade has been explored and Marketing Coop is now identified as a brand name on the menu of White Tablecloth Restaurant in Big City, IA. The establishment of approved commercial kitchen space will open up new opportunities for partially prepared food items, some with special marinades. Marketing Coop tells all buyers of its product that they are not just customers; rather, it relates to them that they are very special and the company wants to feed them just like a member of the family.
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The coop has an owner/member speaker bureau that is providing programs for area service clubs and special events; and it has been training for on-site cooking demonstrations and working with the Head Chef at the White Tablecloth Restaurant to develop new recipes. The company also has assured potential grocery retailers that it will be available to greet customers and provide weekend parking lot lunch activities to help them draw customers. To set itself apart, the company puts its face with the food and stresses authenticity and concern for the consumer. This past summer, all buyers at the Big City Farmers Market received free compact discs that held pictures of each of the member farm families and short narratives about how they depend on the production of a quality product for a livelihood. Eight years ago, it was a loosely assembled group wishing to sell beef. Today, Marketing Coop represents a formally organized marketing organization that is offering consumers the part of Americana most desired. The company is selling quality, taste, security, value and environmental safety. It is selling the Cattle Producers Marketing Coop brand. Experience so far has been that once the coop establishes relationships with its customers, it can often move prices to a premium over other suppliers. Once the consumer is honestly assured that the company offers the best, they will select its products with greater enthusiasm and less price sensitivity. The keys to viability are to establish a fluid market that will pay a fair price for goods produced on the farms of the companys member/owners. In order to do so, the focus over the next five years will be on the creation of three different levels of marketing options: consumer direct, distributor/restaurant, and grocery. Each of those categories can presently be divided this way. Consumer Direct Farmers markets Counter sales at locker Catering There is yet another sales category that might best be described as a service for the member/owners of Marketing Coop. That is commodity grade live cattle markets. Marketing assistance will be a break-even consulting service for the owner/ members. Distributor/Restaurant White Tablecloth Restaurant Grocery All Foods Market, Inc.
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Sales Forecast It is presently forecast for the groups sales to grow by 266 percent over the next 12 months due to: 1) a doubling of the number of farmers markets to be attended, and 2) the written commitment by White Tablecloth Restaurant to take no less than $30,000 in product this next year. The All Foods Grocery account is showing promise. Marketing Coop is following up on several details with the top level management and hopes to get a confirmation for delivery dates in the very near future. Samples of Marketing Coop products were provided to the executive officers during the last visit with favorable reaction. Not included in these sales figures is any incidental income that Marketing Coop may receive from services provided to the owner/members, such as Live Cattle Marketing Consultation fees. Instead of actually being a market for large volumes of live cattle, Marketing Coop will first be a seeker of markets for live cattle. Centralized management and quality control may foster opportunities to pool production and secure equitable delivery contracts with major packers. Sales Programs The owners/members of Marketing Coop have each completed the following matrix as a way of identifying how their sweat equity might best be applied to an overall marketing effort.
Categories and Skills Business Accounting Hiring/firing Purchasing Marketing Cold call sales Telephone sales Production management Processing Safety Supply chain management Quality Supervision Cash flow management Account management Experience? Yes No Comments
When quantified and totaled, the results indicated adequate available talent for a scaled up farmers market effort and any in-store cooking demonstrations or friendly consumer contacts at barbecue events or outdoor catering efforts. Cold call sales and telephone sales are areas that may need to be outsourced if the group wishes to concentrate on one-on-one sales and door-to-door, routestyle deliveries.
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Direct sales to the consumer provide the greatest gross returns to Marketing Coop. However, direct sales rely on a large amount of sweat equity and account for virtually all expenditures of volunteer time and effort. The General Manager, along with one or two available Board Members, will make all sales calls on commercial buyers. A commissioned sales incentive program is under consideration for meat brokers and others who have inquired about adding Marketing Coop meat and specialty products to their sales brochures and gift catalogs. Strategic Alliances There are opportunities for building strategic alliances with several other suppliers of unique handcrafted items and organic, or minimum input, food products. Some of these include: Eastern Colonies Crafters Guild Famous Organic Food Marketing Coop Home on the Free Range Meats Big City Community Supported Ag Ranch We Want One-of-a-Kind Buyers Club Everybodys Favorite Everything Exchange Approached properly, these interests may be willing to enter into a mutually beneficial agreement in which they would add non-competing Marketing Coop items to their product lines and allow the cooperative to do likewise with their goods.
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Milestones The following table lists important milestones with time periods for actual or expected dates of completion. The milestone schedule indicates that Cattle Producers Marketing Coop, a value added cooperative, has come about as a result of deliberate and thoughtful planning, organization and research.
Summer 1998 Idea Brainstorm Considered concepts with help of facilitator. Winter 1998 Organize Cooperative Selected business structure for the group. Elected Board of Directors. Winter 1999 Marketing Realities Hired part-time sales consultant and made first sales calls to measure real market demand. Spring 1999 Research Possibilities Inventoried capabilities and available markets with help of ISU and other service providers. Spring 2000 Capital Borrow Complete business plan and apply for financial assistance. Summer 1999 Feasibility Practicalities Quantified what efforts are most likely to generate cash first.
Fall 1999 Capital Equity Defined needed member cash and sweat equity investment.
Summer 2000 Production Manufacture Create and market products under brand name.
Financial Plan - Marketing We have forecast a relatively rapid growth for Cattle Producers Marketing Coop. Although it may seem ambitious based on historical sales of the assorted participants in Golden Meadow Products, the rate of early growth estimates are bolstered by the expanded product lines and a doubling of farmers market sales efforts.
Past Performance
January $12,000 July $26,275 February $12,000 August $30,000 March $12,500 September $20,000 April $12,750 October $11,000 May $16,350 November $11,000 June $23,500 December $12,000
We are also encouraged by letters received from All Foods Grocery and White Tablecloth Restaurant (copies enclosed), although each provides incentives to continue with an aggressive sales effort. We are also encouraged about the possibilities now being presented in the convenience foods and specialty baked items.
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And finally, the owner/members of Cattle Producers Marketing Coop have agreed to put up 50 percent equity in the form of initial cash investment. The owner/members are entering into this venture as a well-informed group that understands that their cash and near-term sweat equity may well be the keys to the long-term success of this venture. Sales Literature The coop currently is working on a line of brochures and sales materials to assist in marketing and efforts toward prospective new wholesale and retail accounts. Newly designed labels indicate the direction of the company. Possible advantages of developing a Web site are being explored, but questions remain about how best to draw consumers to it.
Test Marketing The last three years of sales have been test marketing and development sales. The company learned about its customers, who they are and what they want. Marketing Budget Advertising .................................................................................................................. $0.00 Travel ........................................................................................................................ $250.00 Supplies ................................................................................................................... $100.00 Business Cards (Misc. Expense) .......................................................................... $50.00 Key Assumptions One assumption made by the company is that consumer demand for natural beef product will continue in the future. Another assumption is that large competitors will not enter the natural beef market for at least three to five years since the market is yet to be fully defined. Yet another assumption is that consumers will continue to appreciate Marketing Coops attempt to provide a face with its food and to provide detailed quality information about how the cattle were raised.
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Marketing Plan
Your research should center on your product, customer, competition and production potential.
What ever happened to the business that believed the world needed a better mousetrap simply because it could build one? The company pumped time, money and energy into creating a great mousetrap. In the end, its efforts failed. Customers didnt buy the better mousetrap. Why? Because the old style also caught mice, and it cost a lot less. In short, the world really didnt need a better mousetrap! Businesses that set their goals without first looking to their customers needs often end up paying a price. Along the same lines, businesses that focus solely on improving productivity and designing new products around new technology suffer from a product orientation. They sell what they produce rather that make what they can sell to satisfy a customer need. Similar results happen when businesses focus on internal operations at the expense of getting out and knowing their customers. Most successful businesses have a strong customer orientation and design most of their marketing strategies around the needs of their customers. These activities include carefully researching and segmenting individual customer markets. Successful marketing is not a single activity you do. It is a collection of strategies and tactics at varied levels and targeting varied end-results.
Credit
Adapted from NxLeveL Manual, Marketing Research and Analysis, by U.S. West Foundation.
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Marketing Plan
A Marketing Primer
A basic understanding of the scope of marketing and the questions raised therein can help any new enterprise immensely. You may be well versed in the terminology and concepts of marketing as they relate to agricultural production. What applies under that umbrella will still be important to many of you. But the scope of your marketing considerations enlarges when you become part of the processor or other start-up business framework. So what is this thing they call marketing? It is something different to every person. It is studying. It is analyzing. It is making decisions about how to reach your goals. Your strategic business plan and your marketing plan go hand-in-hand. You probably cannot successfully carry out either effort without the other. Right in your business plan, you will deal with the basic outline of how you will market your goods. But a more expanded marketing plan can provide that necessary information as well as take you on to the levels of how you carry out your strategies and who is going to perform certain tasks. To establish a full fledged marketing plan, keep a couple of things in mind: 1) You have to be noticed you cant get lost in other peoples bigger picture. 2) Good marketing and image creation evolve. According to the experts, the average customer/consumer is exposed to no fewer than 1,500 different images each day; 50 percent of those are forgotten in less than 24 hours. After two weeks, only 5 percent of those images are remembered. Remember that over that two-week period, each day brings in another 1,500 images, some of which reinforce the previous days images, some of which are new. Its easy to get the feeling you are on a racetrack and all the other cars are accelerating and passing you by repeatedly. Actually, you stand as good a chance as anyone of being the remembered (and acted upon) image if you are smart about it. A key element in marketing is:
Be consistent, frequent and on target with your messages all the messages you send out.
Be consistent, frequent and on target with your messages all the messages you send out.
As mentioned earlier, you will need a marketing plan. It is a working document one that changes as your business plan changes. This plan is one of building on what you know about yourself, defining steps to reach goals and turning one success into a group of them.
Unbreakable Rules
There are two common-sense, cardinal rules to continually keep in mind. We have addressed these in earlier chapters of this manual. They continue to apply. Rule 1: Know your customer(s). Rule 2: Know your competition. Marketing is not just about sales, although making good sales at the right time and prices is always a factor. Instead, marketing is everything you do in terms of addressing your Marketing Plan - 261
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customers and in relation to your competition. These activities probably will lead to improved sales as an outcome. In your previous working endeavors, you and others have been focused on one or two of the components in what marketing gurus frequently call the Four Ps of Marketing. they are pricing, product, place and promotion. Roll these together and then add something we will address later image or positioning. None of the factors can be considered in isolation from the other. And all are considered in relation to the two basic rules of knowing customer(s) and knowing competition. Sound complicated? It can be, but it doesnt have to be. Your best approach is to have as much information as possible about clients, potential clients, competitors and, of course, your own product and business capacity. This means doing research, as was addressed in an earlier chapter. In the Market Research chapter, types of research information, methods and expected outcomes were discussed. There are a couple of cautions to keep in mind. You do not want to limit those you query to those who are a built-in market for your product or supporters of your ideas. Supportive attitudes and answers can make you feel good, really good, for a very short period of time. Depending on your product and sales goals, you need to know what a chunk of the rest of the world thinks. All that feel-good information can cause you to build a marketing and business plan that will not take you to the success you want.
Political Factors
Potential customers Information about customers Known customers Information about potential customers
Economic Factors
You also need to know the climate in which both you and your customers are operating. You may be able to do this simply with a meeting among you and your partners, associates, etc. Or, you may wish to consider surveying or questioning others for this information. This is called environmental scanning. While it may not seem relevant at the time of beginning your operation, you do not wish to be caught by surprise by events that occur over which you do not have control. You need to know where you are sitting in the larger scheme of things. Marketing Plan - 262
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You should know about the current political climate as it relates to your product. What factors in the economy (regionally, nationally or world-wide) could affect your situation or your customers buying ability? What trends related to your product area exist? You may be able to do all of the information gathering yourself or with your own staff or partners. Probably, it will be money well invested to hire some assistance in this area. You have a big job simply in using the findings of research to make your product, production and sales decisions.
Image
Is this important? You bet it is. There are volumes written in fancy, ad-agency driven jargon about what you must do in terms of creating an image for your company. The not-so-good news is some of it is helpful and you should always be learning new techniques to put a spotlight on your company and products. The really good news is that it all boils down to an old adage: Put your best foot forward. How that is done is up to you, your business peers and the budget you can or wish to devote to image marketing. So, what is this thing called image? Quite simply, it is the way others (clients, employees, community units, competitors, etc.) perceive your company and products. And, it is the action you take to bring that about. Establishing an image, at the very least, needs to be part of your marketing plan. The image you leave with customers visually or by any contact conveys reliability. It conveys your savvy as a company and your respect for a customer. Your image conveys knowledge you have done your homework.
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While establishing an image can often mean gaining a visual identification, such as with a logo, it is not limited to that. Image is a part of everything you do all written materials, your ways of dealing with customers and other business people, what is noticed about you (in person or in product) at every interaction. Go back to the idea that what your customer thinks about you is everything. Maybe you are dealing with packaging issues. For that you need a logo, an appearance. That visible image should be a part of everything that is viewed by customers (and competitors). Its a reminder that these people (you) are the ones with the best product, the friendliest service, the quickest delivery, etc. Image must make sense. It must be consistent in visual approach as well as in the way you handle customers. Image must be believable and accurate. What short phrase describes your interactions with customers or your product? You may want to develop a tag line and use it everywhere. A well-defined image also becomes important in dealing with the community(s) in which you work or do business, with governmental agencies, lenders, and on down the line. You are defining yourself with your presence and also what you think of your customers.
A well-defined image also becomes important in dealing with the community(s) in which you work or do business, with governmental agencies, lenders, and on down the line. You are defining yourself with your presence and also what you think of your customers.
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Stress authority. This is another way your research pays off. Someone else may be able to give you a testimonial or words of wisdom that fit the message you want to spread. If possible, use statistics. Was there something recently in a trade magazine or newspaper? Always get a second opinion and always have someone else proofread for you. Any written piece that is done in-house by you or associates should be tested on potential customers or recipients. If you use an agency to do the piece, then make sure that activity is included in what you are getting. Remember when we talked about all the messages that people receive everyday. This is your chance to be one of them. Pretend you have only five seconds in someones vision, then a decision will be made as to whether or not to read further.
Press Releases Too many smaller enterprises believe that getting media notice is a matter of the media somehow magically knowing there is a story there and then seeking it out. Information about your business, your new products, your new hirings, etc., is probably not going to get passed on as a news tip by someone else. But you can and should be your own press agent, especially in terms of dealing with smaller market media such as smaller community weekly newspapers. You can send a press release representing your company by simply putting a bold PRESS RELEASE at the top of the empty portion of your letterhead stationery. What you write should address these factors: What has happened. Who was involved (include addresses). What it means (perhaps a quote from the company owner). What happens next (if a new product, when available and where). As an entrepreneur, you should know the value of being recognized in the press or by any media. It helps to be noticed (free advertising), but it also helps to establish your company or product credibility. These are some points to remember: You use press releases only when you have something that deserves to be noticed. This is not the forum for most opinions or issues stands at least not associated with marketing your company. Focus on what makes your news newsworthy. Something different is generally more interesting, therefore more interesting to media. Are you hiring new people during an economic downswing? Are you introducing another new product line? Have you expanded into a non-local market? If a photo applies, supply it. Be available once you have sent out a media release. You will have blown an opportunity now and maybe next time as well if you arent around to answer questions or take advantage of something the media may wish to expand on. Dont feel defeated if your first media release doesnt create interest. Continue to send releases. If nothing else, your local media will know you exist. Who can predict when that might turn to your advantage? Proofread everything that goes out. NO MISTAKES!
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Exhibit 3B has a sample form that will work for many items of news about your product or company. You will want to add paragraphs to flush out the story angle for the media. If they want more, they will contact you. Your media contacts list does not have to be lengthy or detailed. They do need to be accurate and give contact information if the media wish to pursue it further. Trade Shows Trade shows may be one of the best means available to get word out about your new venture. You will find them taking place in your region, at the state level and nationally. Finding the right trade shows to benefit your business and spending the resources to make yourself noticed when at the show will help you gain the best return on your investment. You should check out the possibilities of exhibiting through grocery, agricultural, food processing and specific meat associations. Instead of going just to observe and learn, you now must gear up to attend as one of the businesses hosting the show. Some basic questions should tell you which shows are worth your effort. Talk to the group putting on the trade show. What is the breakdown of the shows attendance: General interest, purchasers of products, middle traders or vendors, academics, restaurateurs? What amount and type of pre-publicity is sent out and to whom? What goes into the informational packets that are available to other vendors, sponsors or attendees? What are other displays of similar products like? There are many questions to ask about setup, timing, expectations of you and your staff, logistics, etc. Answers will help determine if the project is do-able. Right now, however, you are interested in getting the most bang for your buck. Remember, too, that going to only one trade show each year or season is not the best use of your resources. It is expensive to buy exhibit space, pay staff and prepare a display that is effective. If you are going to get into this arena, look for at least two outlets over a years time. Your goals in making this effort can be quite simple and highly successful: Gain exposure. Build interest. Gain a list of potential customers. Make valuable contacts in your product business arena. In order to have these things happen, however, you and your exhibit have to be noticed and competitive. That means planning ahead and preparing a booth that attracts visitors. Most businesses need some graphic design and construction assistance with this. The associations sponsoring the shows will detail the amount of space that is available for what cost. You will need to construct a display that will fit within the allotted space at each show (or be adaptable to fit). Several companies produce ready-made, easily folded up and transportable display units. Most are for tabletops, which can help you save costs on the display itself as well as give you additional table area for demonstration, product literature, samples, etc. You will need either large, blown up photos or some type of graphically attractive word
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use to bring in interested passers-by. Of course, part of your package will be identification of your company. That could be a super-large logo on one of the display panels. What would attract potential customers to your display? Your research should help you out here. Just as that research brought you to certain conclusions about how to discuss your product and company, it also will lead you to those words that will entice lookers. Consider what benefits the customer wants and can find in your product, then splash it big on your signage. What are your differences from other products or companies? (Go back to doing worksheets if you need to do so.) Then spend some time finding out what the other booths (especially those with similar product lines) will be like at the show. While you want to be different and stand out, you need to be on a par with them or stretch beyond them in terms of presentation, attraction characteristics, size, and use of technological bells and whistles. Yes, it is costly; but it is better to spend a little more than to get no return on investment for what you are spending. A few other items to put on your list of things to do: 1) Have printed materials available for passers-by to take with them. These should not just repeat what is in your display signage. 2) If your budget can stand it, this is the place where trinkets and gadgets can do you some good. Let those that stop by your booth leave with a reminder. 3) If you do not like the trinkets way of thinking, consider this: Make available a more substantial gift item (or several) and put a big bowl or box on your display table. Ask for individuals business cards or let them fill out a card-size slip of paper. Then do a drawing for the item(s) at the events end. You will have to make it a prize that has some worth to those attending. But you will have gained a ready-made list of contacts. 4) This is a good time to consider milking the media. As well as finding out what media coverage is being handled by the sponsoring agency, determine if you have any news from your own company. If so, send out a relevant press release a week ahead of the trade show adding that you will be among those present at the trade show event. Perhaps a follow-up call to the media will create the impetus for a oneon-one meeting with a reporter, ag experts, columnist, etc. A Web Site Very few new facets in our lives and businesses have had the energy, following and potential of the Internet and, in particular, marketing and selling through a Web site. Some businesses (of all sizes) swear by it as a marketing tool. Others, quite simply, dont feel it has added much to the bottom line. In very recent years, costs associated with creating and servicing a Web site have decreased, at least in the sense that you can get fancier display for your investment. But keep in mind that marketing activity and investment must have purpose. A Web site may boost your image as a company but some companies still find it has little impact on business.
What would attract potential customers to your display? Your research should help you out here.
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When is Web site development something to consider using in your marketing strategies? Ask yourself some questions similar to those you must ask to develop your overall marketing strategy. What percentage of my customers and potential customers use computers, the Internet and Internet selling/buying mechanisms (E-commerce)? Do I/we wish to use the Web as an avenue of sales, information or both in reaching customers? Where are my customers located? What geographic areas do I want to add to my customer circles? What is the competition doing? Will a Web site alter perceptions about your company compared to perceptions about other companies doing similar things? If you wish to conduct sales activity through your Web site, there are other things to consider as well. You will have to have in operation a means by which to receive payment (credit card, purchase order, etc.), since no cash or checks can change hands. People use E-commerce to speed up the process of making purchases. Are you able to deliver? Is staff available to process orders in a timely way? Are you up to speed on requirements for shipping in response to Web-based purchases. If your customer base is local, a Web site may be of less value to you. Your time may be spent more productively in dealing with these customers through printed messages, local advertising and one-on-one associations. If you are trying to increase sales to a broader area regionally or nationally and you have sales and shipping details worked out a Web site may be of more value to you. If you are looking at International sales, it is perhaps a strategy that is necessary. In some cases, your product sales increases will depend on a learning curve among potential buyers. For example, perhaps your meat product is one that is becoming known for health value or for its value in an eating trend of another type. A Web site may be a way to increase knowledge (again consider the geographic factors) among the public. Web browsing has become a favored, fun activity for many, especially the young (who are the longer-term customers). You can put information about benefits, ways of using a product, trend growth, etc., on your Web site that will in a broad way emphasize why buying your product is a good thing to do. Throughout much of agricultural production, increasing public awareness and knowledge is considered critical to future business. Where a Web site is linked is as important as using lively graphics on it. If you decide to proceed with developing a site, consider how a customer will come across the site if the exact site address is not known. These hyperlinks are critical for expanding image and sales, but dont mean as much to existing customers. You will have already let them know exactly where to go to find you on the Web. A Written Plan You need to find the time to write down a plan that expands upon the marketing section of your business plan. As you build the plan, you will continue to do these things: Look at where you are now and ask why. Plan to maintain those positions, then expand them to fit your newer goals. Define the stumbling blocks that exist between your company and the type or volume of business you want.
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The simplest marketing plan follows a format something like this: List overall goals, probably at least three or four; under each goal, list strategies that can help you achieve that goal; under each strategy, list a few actions that will be taken to finish out the strategy. Also, you will want to list a person(s) who will be responsible for an action or strategy.
Most plans for new companies can safely list one-year goals. You may wish to set up a two-year set of achievable goals. Strategies and actions are given deadlines within the larger timeframe. If you can live up to the promise of continually revisiting the marketing plan to be sure it is on target or to rework it, you might consider doing a six-month plan as well as a two- or even five-year plan. It is a document that will be revisited and revised regularly. Sample marketing plan worksheets that can get you started are available in Exhibit 3C.
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Press Releases
(your company letterhead or stationery)
Press Release
_______________________________________________________________________
(List any pertinent information, such as national or community statistics, recent quotes, a quote from a local politician, etc.)
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Exhibit 3-C
Effective
Who Is Responsible? GOAL 1: Strategy A: Task: Task: Task: Task: Strategy B: Task: Task: Task: Task: Strategy C: Task: Task: Task: GOAL 2: Strategy A: Task: Task: Task: Strategy B: Task: Task: Task: Strategy C: Task: Task: Task: GOAL 3: Strategy A: Task: Task: Task: Strategy B: Task: Task: Task: Strategy C: Task: Task: Task:
Marketing Plan
Notes
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Marketing Plan
Internet Marketing
The Internet is quickly becoming a booming market option. Many companies use Internet marketing as a significant market channel. Consider these Internet facts. Each generation has a new advertising technology . . . radio age to TV age to Internet age. 500 million people have Internet access. Almost 50 percent of the U.S. household are on line. 98 percent of all large companies have Internet access. Internet on-line sales are growing. Christmas sales for 1999 were up 1000 percent from 1998 on some sites. There are 32 publicly traded Web sites, such as America On Line (AOL) or Yahoo. Total sales for the 32 sites were $4 billion, but only five sites accounted for 75 percent of the total sales. The most successful sites were Amazon.com, Priceline.com, Egghead.com, Value America and Ebay. Several companies (such as Arthur Andersens Enterprise Group, National Small Business United, Zdnet, Boston Consulting Group and the Yankee Group) have done studies focused on small firms of 100 employees or less. Selected findings from the various surveys include: The percentage of small businesses with access to the Internet doubled from 21.5 percent in 1996 to 41.2 percent in 1998. Small businesses that utilized the Internet had higher revenues when compared with those that did not; $3.79 million versus $2.72 million. Internet sales account for less than 1 percent of total retail sales in the U. S. economy. On-line retail marketing is growing at a 200 percent annual growth rate. Traffic online has been doubling every 100 days; but only 5 percent of customers who visit the Web site become customers. The most common use of the Internet by small companies was for e-commerce. In a study of 1010 small firms by IBM and the U.S. Chamber of Commerce, 30 percent were found to have used the Internet for promotion/advertising, 37 percent for on-line ordering and 29 percent for receiving orders. Internet sales are only a fraction of total consumer spending; $1.3 billion to $4 billion out of $2.5 trillion in consumer spending in 1997. Access Media International estimated that small business gained $3.5 billion in consumer sales in 1997 and predicts that number will reach $25 billion in 2000. Some analysts predict that by 2000, one-third of all business-tobusiness transactions, the largest component of e-commerce, will be conducted over the Internet. Those revenues are predicted to grow to $327 billion in 2002, with businessto-consumer sales topping $17 billion in 2001. The Yankee Group has identified three phases that small- to medium-sized companies go through over time in their Internet development. Three phases are: 1. Brochure-ware sites: Companies use the Internet primarily to advertise products. The firms gather customer prospect information and provide customer feedback and information requests. 2. Pre-commerce sites: Firms use the Internet to create immediate orders off the Internet. However, on-line transactions are not part of these sites. 3. Simple commerce sites: In this advanced stage of e-commerce, businesses accept orders and payments over the Internet. The sites are primitive compared to bigger company sites with little in security features. Marketing Plan - 279
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Internet sales are only a fraction of total consumer spending; $1.3 billion to $4 billion out of $2.5 trillion in consumer spending in 1997.
Forrester Research, Inc., has divided the on-line retail market into three categories based on type of goods purchased. 1. Convenience items: Low cost items such as books, music, apparel and flowers. Consumer items are expected to generate $32 billion worth of sales by 2003. Product selection and ease of shipping will keep customers ordering. 2. Replenishment goods: This group will account for a projected $19 billion in sales by 2003. Items included are high frequency purchases like groceries, personal care, prescription refills and specialty foods. With the exception of specialty foods and refills, consumers will be slow to adopt this purchasing due to distribution issues. 3. Research purchases: These are information driven purchases, such as travel arrangements, computers and automobiles. Airline tickets are the most often purchased item, accounting for almost two-thirds of the $56 billion spent in this category. Research has shown consumers start with ordering of convenience items and that it takes a year before moving to the next category of items.
Disadvantages 1. Managing upgrades. 2. Assuring Web site security. 3. Avoiding being a victim of fraudulent activities on-line. 4. Costs required to maintain a site. 5. Finding qualified consultants. 6. Finding and retaining qualified employees. 7. No market for old computers.
Food Companies
Few food companies to-date have been successful with only using the Internet as their marketing avenue. Producers considering marketing over the Internet should consider some of the following: Businesses which succeed most often on the Internet are those that are unique, commonly used and affordable. When marketing livestock on the Internet you must be slaughtering and processing from a federally inspected plant, unless you only sell to clients in your state. Unique businesses succeed on-line only if people can find them. Promote your Web site by submitting it to several search engines repetitively and
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linking with other high-traffic, related Web sites. Link (with permission) to many applicable Web sites, but be cautious about having too many links that quickly redirect consumers away from your site. Dont link to your competitors, but check out your competitors Web sites. Hiring a professional Web site designer is often a good idea. Before doing this, check references and on-line work samples. Do-it-yourself design programs can be limiting and may create Web sites that look like many others. Promote your Web site off-line by sending out cards and putting your Web address on every promotion piece. Find a reliable service. For information, look up http://www.extension.umn.edu/mainstreet or contact Rae Montgomery at (612) 624-2773, rmontgomery@extension.umn.edu. Washington State University also has a Web site, which offers resources for farmers wanting to market their products. Their Web site provides information on the pros and cons of Internet marketing, tips for success, links to other farmers sites, resource lists for more information and a glossary of Internet terms. The site location is www.agecon.wsu.edu.
A short glossary for new Internet users: Browse: a program through which you view the Internet (i.e., Netscape or Internet Explorer). HTML-Hyper Text Markup Language: the language used to create Web sites. ISP-Internet Service Provider: Provides dial-up access between your computer and the Internet. Link or Hotlink: a word or graphic you can click on to be taken to a new Web page. Search engine: a Web site whereby you can locate Web sites for any particular topic by entering keywords. (Example: www.yahoo.com) Server: the unit that houses your Web site. Submission: registering your Web site with a search engine. If you are ready to go on-line you will need: A computer with a modem. The modem needs to be fast enough to handle the Internet or e-mail and to perform desktop publishing. ($600 and up) Consider a second phone line to avoid busy signals while you are on-line promoting or researching your Web site. The cost for this second line will vary according to your local system; usually $15-$20 per month, although it may be higher in rural areas. Consider a toll free number a risk-free way for potential customers to inquire. ($5/ month, 10 cents/minute) A user-friendly e-mail program (such as Microsoft Outlook) to manage client contact. (free - $5) An Internet Service Provider (ISP) to provide dial-up service to the Internet. ($12.95 $22.95 per month) If you use a commercial national service, make sure you have a local access number assigned to the company in your area and you will not be billed for long-distance calls each time you dial up. By looking at AOL: CNET Builder.com, you will find sites which will host your page for free. One such site is Yahoo ! GeoCities. This site provides Web page design hosts. The other hosts are mostly feebased sites, although four other Web hosts were listed who will host your site for free. Examples of fee based sites are OLM, charging $19.95 per month and Web hosting.com for $24.95 per month. Marketing Plan - 281
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If you choose to hire a designer, here is what he/she will need to create an effective Web site. Photographs representing your products and/or services. Any printed material such as business cards, brochures and catalogs are helpful for formatting and content. A storyboard that gives an idea how many pages and what each page should be about, as well as what you like and dislike.
Recommended Book
Sams Teach Yourself HTML in 24 Hours.
Resources
Hobbs, Jennifer, Internet Eclipse; jennifer@webchoce.net. Quinn, Tom, Promoting Your Business Using the Internet; Iowa State University Extension, Ames, Iowa 50011. E-Commerce: Small Business Venture On-line; Office of Advocacy, U. S. Small Business Administration; July, 1999.
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Direct marketing often takes many forms and usually includes a combination of techniques, such as selling to farmers markets, door-to-door sales, Internet marketing, direct sale to restaurants or institutions, and so on.
In his book, Hamilton notes eight things that could get you into legal trouble if violated. Selling more products produced by others than raised by you. Not carrying sufficient liability insurance. Failing to comply with labor rules when hiring employees. Conducting a commercial business in an area not zoned for such use. Allowing unsafe conditions to exist on your property. Selling processed foods that have been produced at an unlicensed facility Failing to observe farmers market rules designed to protect the safety or quality of food. Not complying with record keeping and paperwork rules for tax or labor laws. Joel Salatin, a Virginia pastured beef and poultry producer and author of several books, suggests several things to think about when deciding on the pricing of your products. First, dont under-price your product. Attributes such as sustainably produced are perceived to be superior products to consumers because they may be more environmentally friendly, humanely produced, or are produced on family farms. Patronizing local farmers ensures that the local economy is stimulated. Salatin suggests that producers set a rewarding and satisfying gross margin and then stick to it. This will allow the producer to build a customer base with clients who appreciate the product for what it is, not for what it costs. Second, dont try to satisfy all customers needs. Take into account the time and extra effort that may be needed to accommodate their requests. (Salatin, Joel. Sales Can Fail, The Stockman Grass Farmer; June, 1994, p. 31.) Finally, keep accounts receivable low. Operate on a cash and carry basis as much as possible. Direct marketing has a unique characteristic that depends on building relationships with the customers. In fact, the term relationship marketing has been used to describe the best methods of direct marketing for family farms. Salatin suggests these marketing tenets: The producer has to tell the consumers why the products are different from meat that can be bought in the grocery stores. Product quality: When the producer maintains control of the animals and raises them, it should be easier not to compromise the quality of the meat. Customer loyalty: When the consumer knows the producer personally, the relationships built between them, both emotional and physical, are not easily broken. Good sellers know and use their customers names. Loyalty helps bring in repeat customers. The greater the loyalty and satisfaction, the higher the likelihood of repeat business, even though the product may be available at the grocery store at a cheaper price. The producer has to remember that the first rule of business is that the consumer is always right, but in some cases a sale might actually cause a negative gross margin. If the consumer is not a good patron, the producer should consider not marketing to him or her.
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Following are further resources on direct marketing: Appropriate Technology Transfer for Rural Areas or ATTRA Phone: (800) 346-9140 www.attra.org Direct Marketing Resource Notebook Nebraska Sustainable Ag Society, PO Box 736, Hartington, NE 68739 Phone: (402) 254-2289 Cost: $20 Legal Guide for Direct Farm Marketing Neil Hamilton, Drake University Law School, Agricultural Law Center, 2507 University Avenue, Des Moines, IA 50311-4505 Phone: (515) 271-2947 Cost: $20 North American Farmers Direct Marketing Association (NAFSMA) Phone: (888) 884-9270 www.nafdma.com Membership fee for one year is $75. Farmer Direct Marketing Action Plan Errol Bragg, USDA Agricultural Marketing Service (AMS) Phone: (202) 720-8317 www.ams.usda.gov/directmarketing/frmplan.htm
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Some of the barriers to entry and other considerations in a CSA are: Organizing farmers to be part of a CSA. Additionally, you may have several farmers who are willing to grow produce and perhaps have other species such as poultry, eggs, lamb, etc., to provide consumers diversity throughout the year. Finding consumers who are willing to be part of a CSA. Constant and varied supply of produce and products. Seasonal aspects of CSAs are difficult to overcome. They cant compete with yearround availability in grocery stores. Need to ensure that the meat products sold have appropriate approvals. If marketing is done prior to planting and harvesting, this helps to lower risk for producers than many other marketing options. Lower risk, since participants share cost with others. Ease of facilitation if the group lives close together. Risk shared with consumer CSA members. May be difficult to organize with other farmers. May be difficult to convince consumers they should participate. May be less choice for consumers than is available at supermarket, which have a wide array of products. Variables that decrease the likelihood of someone joining a CSA are people with children under 12 years of age and people with teen-agers. The following marketing themes and trends have been found helpful for groups wishing to promote their CSAs: Connecting farmers directly with consumers. Food with a Face themes. Marketing to groups with social consciences, such as churches, environmental groups and civic groups. Lower cost per share. Marketing to individuals who want organically-grown food and who are socially conscious. Marketing to individuals who are well educated. Education level was found to be a very significant predictor of membership status, with members generally having a higher level of education. Following are further resources on CSAs: Appropriate Technology Transfer for Rural Areas (ATTRA) Appropriate Technology Transfer for Rural Areas, PO Box 3657, Fayetteville, AR 72702 Phone: (800) 346-9140 www.attra.org Bio-Dynamic Farming and Gardening Association Bio-Dynamic Farming and Gardening Association, PO Box 550, Kimberton, PA 19442 Phone: (800) 516-7797 Community Supported Agriculture of North America c/o Indian Line Farm, Box 57, Jugend Road, Great Barrington, MA 01230 www.unmass.edu/umext/csa Community Supported Agriculture . . . Making the Connection California Cooperative Extension, Placier County, 11477 East Avenue, Auburn, CA 95603 200 pages
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Iowa Community Supported Agriculture: Resource Guide for Producers and Organizers Iowa State University Extensions Sustainable Ag Program, 2104 Agronomy, ISU, Ames, IA 50011 Phone: (515) 294-1923 80 pages Iowa Network of Community Supported Agriculture (INCA) Jan Libby, 1465-120th St., Kanawha, IA 50447 Phone: (515) 495-6367 libland@frontiernet.net Legal Guide for Direct Farm Marketing Neil Hamilton, Drake University Law School, Agricultural Law Center, 2507 University Avenue, Des Moines, IA 50311-4505 Phone: (515) 271-2947 Cost: $20 List serve: CSA-L@prairienet.org www.priarienet.org
The USDA estimates there are more than 2,700 farmers markets in the U.S., with more than 20,000 farmers selling through the markets.
Door-to-Door Sales
Some meat marketers have been successful with establishing a clientele and selling meat directly to the consumer. The product is usually frozen to ensure longer life. Marketers often establish the sales through individuals whom they know or customers they have generated through farmers markets, direct mail or phone promotions. In direct sales to consumers, consider the following: Most states require salespersons to have a state-issued license or permit to sell products door-to-door. Make sure the product has been carried in a refrigerated vehicle. Bacteria multiply rapidly at about 40 degrees. The Federal Trade Commission (FTC) Cooling-Off rule gives the customer three days to cancel purchases made in your home or at a site that is not the permanent place of business or local address of the seller. The cooling-off rule does not cover sales of $25 or under. Under the rule, the salesperson must orally inform a customer of his/ her rights at the time of sale and provide two copies of a cancellation form and a copy of the contract or receipt. The contract or receipt should be dated, show the name and address of the seller and explain the consumers right to cancel. The following is a further resource on direct sales: Appropriate Technology Transfer for Rural Areas www.attra.org
Farmers Markets
The USDA estimates there are more than 2,700 farmers markets in the U.S., with more than 20,000 farmers selling through the markets. Farmers markets are typically simple in organization and very straightforward in operation. According to Neil Hamilton, in The Legal Guide for Direct Farm Marketing, there are some general features in how farmers markets operate. They include: Marketing Plan - 287
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There will be a set of regulations, developed by whoever is sponsoring the market, which vendors must agree to follow. Vendors will be required to sign an agreement concerning their participation in the market, which includes that they agree to follow the rules. Vendors pay a market fee on a daily or season basis. There is a market manager, who is responsible for running the market and enforcing the rules.
One of the important issues that can arise in the operation of a farmers market is liability in case of injury or accidents to shoppers or vendors. Many markets purchase their own insurance policies to cover some of the potential events. Some markets also require vendors to purchase policies specifically for their market activities, which list the market as an insured party. The most common way this issue is addressed is for the market agreement to require vendors to provide some proof of liability insurance. (The Legal Guide for Direct Farm Marketing, page 51.) Producers need to emphasize that they are local farmers and their products are locally grown and raised, because customers like the idea of supporting local small-scale agriculture. For pasture-raised products, its important to have photos displayed showing the clean, green aspect of pasture produced products. The customer should be able to easily understand all advertising materials Vegetables are the main items at farmers markets, so producers with meats have a marketing advantage. The following are further resources on farmers markets: ATTRA ATTRAs Farmers Market publication www.attra.org Agricultural Diversification Bureau Iowa Department of Agriculture and Land Stewardship, Barbara Lovitt Phone: (515) 281-5402
Freezer Sales
For many livestock producers, freezer meat sales have been the most successful when selling live. Freezer sales usually force the producer to become a broker for the slaughtering and processing at a government-approved facility. Before starting to market, the producer needs to form a good working relationship with the locker or government-approved facility. Several points to consider include: The largest portion of your business may come from value-added products, like sausages and other processed meats. In pricing, be sure to include the cost of handling and delivery to the facility. Make sure the buyer understands there will be loss of weight during slaughtering. Require a deposit before taking an animal to slaughter.
(From Klober, Kelly; Approaches to marketing notes from a direct sales survivor, Small Farms Today; October-November 1998; p. 48-51.)
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The following is a further resource on freezer sales: Appropriate Technology Transfer for Rural Areas www.attra.org
Mail Order
Many have found mail order to be an effective way to merchandise meat products. However, all meat that crosses state lines must have been harvested and processed at federally inspected plants. The USDA provides the following food safety suggestions. Pack it safely. Perishable foods will stay safe at a frozen temperature longest if frozen solid first. After frozen, pack your food gift with a cold source, such as a frozen gel pack or purchased dry ice. Use a sturdy box. Use heavy foam or corrugated cardboard. Fill up any empty space with crushed paper or foam popcorn. Air space in the box will cause the food and cold source to thaw faster. Clearly label your box Perishable Keep Refrigerated. The following web site contains further resources on mail order: www.fsis.usda.gov/OA/pubs/mailorder.htm
Communications with the owners, chefs and staff are imperative to have a positive supplier/buyer relationship. Boehm and Goodman recommend that you ask the restaurant when it is a good time to take orders and deliveries. Establish your communications so the following procedural issues are addressed: Does the restaurant call you, or do you call someone there? Is there a regular delivery schedule or is it on an as available/demand? Determine how problems and complaints can be resolved. Misunderstandings will occur; resolve them quickly. How are payments made? What is your credit policy? Go to staff dinners. Invite the staff to your farm. Insist on feedback, good and bad. Boehm and Goodman say these problems may occur when selling to restaurants: The restaurant business is very fluid. Success rate is rather low. Staff changes often. Menus change with customer demand, the season, the chefs and the availability of other items; thus demand for your product will change. Eventually, some of your product will be below the usual high standards. How will you deal with it? How will the restaurant deal with it? Can your processor follow your instructions? Can you keep all your customers happy? The following resources assisted with this section and may be of further help to you: Boehm, Brian Brian, Boehm, Oregon, WI (608) 835-0264. Goodman, Jim Jim Goodman, Northwood Farms, Wonemoc, WI; (608) 489-2291. r.j.goodman@mwt.net
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Financial Information
Start-up investment: You can spend from a few thousand dollars to modify an existing kitchen to meet codes up to $75,000 to build a professional kitchen. A low cost alternative is to rent a kitchen, such as from a church. However, if you do so, you will need to ensure that the kitchen has been inspected. Time until breakeven: Breakeven can be achieved in less than one year depending on the fixed investment. Annual revenues: A few thousand dollars to a few million with pretax profits in the 40 percent of gross revenue range. One caterer estimated she kept up to two-thirds of the total revenue from a catering job after paying expenses. Catering has the reputation for the best profit potential in the food and beverage industry. Catering allows for a start-up matched to your pocketbook. Kitchen facilities and items such as china, linens and other staples can be rented. It is estimated that 70 percent of the business activity is related to business activities of marketing, cooking, transporting food, serving, clean-up and arranging for help, while only 30 percent of the effort is food related. These percentages are the opposite of restaurants.
YES now serves 160 businesses five to seven breakfast items daily along with 18 lunch options. The owner maintains quality control and customer contact every day by operating a catering truck.
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corporate lunches in the boardroom, breakfast meetings, box lunches, food delivered for noon breaks and other special occasions such as the annual summer family corporate picnic or winter holiday party. This type of catering is conducted in a more business like manner, usually with one or two people in the business. Price, service and quality are the main issues and most businesses are experienced in this area, know what they want, and are working from a budget. Community Affairs These include special events hosted by city or county governments, nonprofit organizations or other groups. Often the group will need a caterer to provide food and assist with other aspects of the event. These public events are a good way to generate publicity about your business.
Soliciting Business
A good way to start is to talk with the business receptionist who handles the catering. The plant managers or top persons secretary might also be a starting point. Different departments may need to be targeted. Human Resources workers handle such things as safety award and employee luncheons; the Presidents or General Managers office handles special events and sales and marketing events for sales staff or customers. Software is available to help with all aspects of a catering business. One such software is CostGuard for Windows published by AtYourService Software, Inc., Bronxville, NY. Web site is www.costguard.com. This software has food, menu, inventory control, recipe costing and sales analysis assistance. An excellent Web site for a wide variety of information and assistance about catering is www.webfoodpros.com. This site contains several chat rooms related to various aspects of catering.
Resources
Kahn, Sharon, and The Philip Lief Group, Catering Events and Festivals, 101 Best Businesses to Start; pp. 173189; Main Street Books; Doubleday; New York, NY. 1998. Vivaldo, Denise, How to Start a Home Based Catering Business, 3rd Edition; The Globe Pequot Press; Guilford, CN; 2000. http://webfoodpros.com http://angelfire.com/in/ yeschartz
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A recommendation is to pick a product that will sell for three to four times what you pay for it. Price the product to attract customers. Use two-for-one deals, or one product for full-price and the second for half-price. Again, look at what your competitors are using for pricing strategy. Testing helps to lessen the guesswork for finding a winning combination. For simple test marketing, spend a small amount on an advertisement or mailing and check the results. As you discover the combinations of variables that yield growing response, you will begin to get the feel for the right formula to reach your targeted market. Advertising is critical to success. You may use print ads, photographed display ads or both. An ad should get attention through a good headline. Use proven headline words such as amazing, bargain, revolutionary and sensational. Actually, in the food business, you will look for stand-out words that meet the needs youve identified in your customers. These might include most flavor, quick or in seconds (when dealing with preparation aspects), healthful or pure. For a list of such words, check the book, by William A. Cohen, Building a Mail Order Business, 2nd edition (New York: John Wiley & Sons, Inc., 1985). Develop interest and sell the benefits sell the smell and sizzle of the meat. Here are some tricks to keep in mind. Show the benefits and advantages of the product. Build and maintain credibility. Use testimonials or references if available. Deliver a call to action, that is, ask for the sale. Provide incentive for the customer to order immediately. Include a toll free number to call. Use a post office box to maintain privacy. (Response to a business address is actually better than response to a post office box - but if the business address is your home you should consider possible privacy and security issues.) Accept the use of a major credit card .
Tell the recipient of a promised delivery date or alert the customer if the item has been shipped so someone is there to receive it. Do not send to a business address unless you are sure a refrigerator is available for immediate storage of the product. Do not send packages at the end of the week when they may sit in a post office over the weekend. Try for early in the week shipments.
Notes
The Federal Trade Commission has a Thirty-Day Delivery Rule. This rule states a firm has 30 days to ship an order once it is received. If you can not ship within 30 days or by your stated shipping time, you must notify the customer of the new ship date before the original date passes. In the notification to the buyer you must include a stamped, selfaddressed envelope for the customer to use to cancel the order. The following web site contains further resources on mail order: www.fsis.usda.gov/OA/pubs/mailorder.htm An Example of Opportunity Schwans is a Minnesota-based company that started in 1952 with a farmer, Marvin Schwan, who was not satisfied with the market he was receiving for his milk products. Since then, Schwan has grown his business to now include delivery in the 48 continental states plus Canada and Mexico. Mark Gaddis is head of purchasing for pork and beef items. While this is more than a catalog mail order operation, Schwans does have a catalog they leave with customers who can use it for ordering when they miss the route truck. A Conversation with Schwans In early March 2000, a member of the team authoring this manual spoke with Julia Handeland, assistant to Mark Gaddis, at Schwans Marshall, MN, headquarters. While the conversation was directed at another project, the outcome may apply to businesses like yours and is printed here. The specific question asked was: What is the process for selling products to Schwans? The answer was: 1. Send a letter of introduction and product brochure to Mark Gaddis. (Do not send samples unless requested.) 2. The brochure will be reviewed by the buyers. 3. A meeting will be scheduled or a request for samples will be made if there is an interest. Other things learned during the conversation: The product needs to be unique for it to have a chance of acceptance. USDA and HACCP certifications are absolute requirements. Everything handled by Schwans is packaged under their name. Route trucks return to customers every two weeks - portions should be of a size that promotes an order by the time the truck returns. Precooked is fine; but not a requirement and not always an advantage. All packaging is done at suppliers plants per Schwans specs. Schwans picks up its own products from the suppliers. Families are the target market. Gaddis phone number is (507) 537-8688. The general number is (888) 724-9267. Marketing Plan - 295
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Gift Giving
In addition to the catalog sales, the gift giving business offers significant opportunity to market high end products. Experts say the best approach for these types of markets is to: Pick profitable small- to medium-sized companies in the area. Schedule a meeting with the plant manager, owner or human resource director. Explain that you are able to supply a high quality gift item for them to give to employees or valued clients. Show how and why the company will benefit by giving your product. Explain that you ship all your product next day delivery then be able to do it.
Stock Yards Stock Yards is a small Chicago-based company. Most of the products it carries are beefsteaks. Contact: Nicole at (800) 621-3607.
References
Mail Order Marketing http://www.smartbiz.com Starting A Mail Order Business, Business Concepts, 1994. http://www.sba.gov http://fsis.usda.gov
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considerations for doing business with a retailer is meeting his/her gross margin goals. This can be a problem when you are supplying a value added product such as precooked or case-ready meat items.
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Ask if you can send information ahead of time. Or, in case of a negative response regarding a meeting, ask: Can I send product brochures and some information about our quality? Ask if the buyer wants you to bring samples. (Any particular cuts?) Find out if there are new products you can show them. Whatever the outcome, say, Thank you! Thank them if they say, Yes. Thank them if they say, No.
Once you have your foot in the door, keep it open for the next time.
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Marketing Plan
Federal Procurement
The federal government is a marketing possibility for any small business. For most of the federal purchasing agencies, this is an opportunity based on e-commerce. Like all other marketing opportunities, to be successful in selling to the federal government, the business must price the product competitively and be prepared to package and ship according to very specific requirements. A study of federal procurement sites, which was carried out by Federal Procurement from Small Firms, ranks 2,235 federal procurement centers on their levels of procurement from small businesses during fiscal year 1998. The review looked at contracts over $25,000. In FY 1998, the government spent $181.7 billion for goods and services in prime contracts over $25,000. Small business received just 18.3 percent of the total awarded or $33.2 billion. The study revealed the centers spending the most on contracts did the least amount of spending with small contractors. Nineteen percent of the centers, 419, did no contracting or less than 5 percent of their contracting with small business. Procurement was concentrated in engineering and management services, general construction and real estate services. Next, but a much smaller amount, were health services, business services, electronic equipment and transportation equipment. Janitorial and commissary services, once procured almost exclusively from small business, are no longer the domain of small business. What does this mean for you? Marketing to the federal government is a series of well-defined tasks. Some are done one time and some are done on a repeat basis. Although well defined, the start-up business probably should not consider government contracting until the basics of business have been well established. The basics include definition of products, product sizes, pricing, bookkeeping, shipping and delivery, and marketing. These factors all should be outcomes of your business planning process and development of a written plan. Some contracts have a selection criterion to meet called past performance. With no business history, a start-up business will have trouble meeting this criterion.
Marketing to the federal government is a series of well-defined tasks. Some are done one time and some are done on a repeat basis.
database for information about trading partners who would like to do business with the Department of Defense. The database contains trading partner information relevant to procurement and financial business transactions. CCR provides worldwide visibility to government buyers and finance officers for the purpose of streamlining contract awards and payments. Registration at this site also allows trading partners to avoid registration with multiple procurement offices. To get started with CCR registration, you must have a Data Universal Numbering System (DUNS) number. The number can be obtained by calling Dunn and Bradstreet at (800) 333-0505. The process to request a number is free of charge and takes about 10 minutes. Registration with CCR is important because the entire federal procurement system is moving to the use of the system. This means that being listed in the CCR directory will give you electronic visibility to government buyers you have not yet met. Signing up here will allow you to do business with anyone in the federal government. The web site address to get started is: http://www.ccr2000.com Another web site is: http://dodbusopps.com/html/getstarted.html This site provides helpful information on getting started with opportunities in selling to the military. It suggests reading a book, Selling to the Military Handbook, as a starting point and offers information about the book. The Small Business Administration (SBA) has two programs to assist with government procurement opportunities. PRO-NET is a program of the SBA that is an electronic gateway of small business procurement information. It is an Internet data base with information on more than 170,000 women and minority owned businesses. Government agencies as well as prime and subcontractors can use the database to identify potential suppliers. The system also serves as an electronic gateway to the Commerce Business Daily, agency homepages and other procurement opportunities. Another SBA program is SUB-NET. Prime contractors use this system to post subcontracting opportunities. Small businesses can review this Web site to identify opportunities in their area of expertise. Government agencies, colleges, universities, state and local governments also use the Web site for listing procurement needs. The Web site address: http://www.pronet.sba.gov The Bureau of Prisons also buys food products, both perishable and non-perishable. Each prison is responsible for buying its own products as are six regional offices and various training centers. The regional contracting office nearest Iowa is: North Central Regional Contracting Office Tony D. Hiscocks, Regional Chief, Gateway Complex Tower II, 8th Floor, 400 State Avenue, Kansas City, KA 66101-2492 Phone: (913) 551-1067. http://www.bop.gov The Department of Justice has an Office of Small and Disadvantaged Business Utilization. This office has the responsibility to give contracts to small, small women owned and small disadvantaged businesses. Justice buys over $2 billion in goods each year.
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The Web address is: http://www.usdoj.gov/jmd/osdbu/ The U. S. Department of Agriculture (USDA), Agriculture Marketing Service (AMS) purchases meat products for the National School Lunch program and other Federal Assistance programs. A visit to that Web site will provide a catalog to view information on how to sell products to the USDA and purchase reports. The Web address: http://www.ams.usda.gov/cp/index.htm Other Web sites that provide information for government contracting are: Electronic Posting System: http://www.eps.gov This site is a link to procurement opportunities. Defense Supply Center Philadelphia: www.dscp.dla.mil This center purchases food service items.
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Marketing Plan
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Halal Islamic Food and Nutrition Council IFANCA, 5901 N. Cicero, Suite 309, Chicago, IL 60646 Phone: (773) 283-3708 Fax: (773) 283-3973 www.ifanca.org/halal.htm E-mail: comments@ifanca.org Kosher Union of Orthodox Jewish Congregations of America OU, 11 Broadway, New York, NY 10004 Kosher hotline: (212) 613-8241 www.ou.org/ E-mail: kosher@ou.org
Resources
USADATA.com, Consultant and Market Research Reports http://www.usadata.com/market_research/sml_00/sml_771.htm http://www.ou.org/ http://www.ifanca.org/halal.htm http://www.islam101.com/history/population2_usa.html http://www.us-israel.org/jsource/US-Israel/usjewpop.html
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Marketing Plan
Breed Marketing
Each of the cattle breed associations involved in marketing works to establish its own unique consumer oriented claim to fame. Lean, tender or lean and tender seem to be the most frequent eating-satisfaction claims. Breed specifications at the packer end point frequently include grade consistency, narrowed weight parameters, progeny guarantees and source verification.
Branded Marketing
Branded marketing might be seen as either separate from breed marketing or related to it. All-natural, natural or naturally fed are claims that are frequently associated with branded marketing efforts. The relationship with breed marketing sometimes comes into play when claims about the special traits of a particular breed of cattle are dynamically coupled with claims that the livestock have been raised without hormones or antibiotics in an effort to gain still greater consumer favor. Marketing Plan - 307
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Another branch of branded marketing includes beef marketed through closed cooperatives and other forms of alliances and limited partnerships. Meat case products labeled as certified premium or farmers choice might be considered examples of this type of branded product. Here again, breed designation may or may not be part of the claim.
New Niches
In a world that responds favorably to choice, going against the old commodity model may be a very smart idea. In addition, it keeps you out from under the steamroller backlash of the dominant industry players because you are not just replacing business they had, you are possibly creating new customers for beef or bringing lost customers back. This strategy is especially strong with local restaurants in the middle to upper clientele range, where they frequently give meat items center-of-the-plate status based on the cache of breed, brand and method of production.
Futuristic?
Strategic alliances represent strides toward a true value-based marketing system. Producer and processor participation with breed and branded marketing groups will surely impact the beef market in the future. The nature of this impact is difficult to determine but it seems clear that more and more cattle are being placed into the marketing system via these alliances. The following represents a cross section of the types of producer alliances now available. Precision Beef Alliance Precision Beef Alliance, 53020 Hitchcock Ave., Lewis, IA 51544 Phone: (712) 769-2640; (712) 769-2641 FAX: (712) 769-2610 E-mail: x1hall@exnet.iastate.edu; hdevorepetty@hotmail.com www.precisionbeef.com/ U.S. Premium Beef U.S. Premium Beef, 10100 NW Executive Hills Blvd., Suite 105, Kansas City, MO 64153 Phone: (816) 891-2300, (316) 767-7041 FAX: (816) 891-2310 www.uspremiumbeef.com/ Coleman Natural Products, Inc. Coleman Natural Products, Inc., 5140 Race Court, Denver, CO 80216 Phone: (800) 442-8666 www.colemannatural.com/ Lauras Lean Beef Company Lauras Lean Beef Company, 2285 Executive Drive, Suite 200, Lexington, KY 40505 Fax: (606) 299-6822 E-mail: customers@llbcorp.com www.laurasleanbeef.com
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Following is a listing of beef breed associations, some of which offer marketing programs. American Angus Association American Angus Association, 3201 Fredrick Blvd., St. Joseph, MO 64506 Phone: (816) 233-3101 FAX: (816) 233-9703 American Beefalo Association American Beefalo Association, Box 656, Somerset, KY 42501 Phone: (606) 678-5438; (800) BEEFALO American Belgian Blue Association American Belgian Blue Association, P.O. Box 307, Sulfur Springs, TX 75482-0307 Phone: (903) 885-2275 FAX: (903) 885-2464 American Blonde dAquitaine Association American Blonde dAquitaine Association, P.O. Box 12341, Kansas City, MO 64116 Phone: (816) 421-1305 FAX: (816) 421-1991 American Brahman Breeders Association American Brahman Breeders Association, 1313 La Concha Lane Houston, TX 77054 Phone: (713) 795-4444 American Chianina Association American Chianina Association, P.O. Box 890, Platte City, MO 64079 Phone: (816) 431-2808 American Dexter Cattle Association American Dexter Cattle Association, Route 1, Box 378, Concordia, MO 64020 Phone: (816) 463-7704 FAX: (816) 463-7704 American Galloway Breeders Association American Galloway Breeders Association, 310 West Spruce, Missoula, MT 59802 Phone: (406) 728-5719 FAX: (406) 721-6300 American Gelbvieh Association American Gelbvieh Association, 10900 Dover St., Westminster, CO 80021 Phone: (303) 465-BEEF FAX: (303) 465-2339 www.gelbvieh.org/~aga E-mail: aga@www.gelbvieh.org American Hereford Association American Hereford Association, P.O. Box 014059, Kansas City, MO 64101 Phone: (816) 842-3757 FAX: (816) 842-6931 American Highland Cattle Association American Highland Cattle Association, Livestock Exchange Building, Suite 200, 4701 Marion St., Denver, CO 80216 Phone: (303) 292-9102 FAX: (303) 292-9171
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American-International Charolais Association American-International Charolais Association, P.O. Box 20247, Kansas City, MO 64195 Phone: (816) 464-5977 FAX: (816) 464-5759 American Maine-Anjou Association American Maine-Anjou Association, 760 Livestock Exchange Building, Kansas City, MO 64102 Phone: (816) 474-9555 FAX: (816) 474-9556 AmericanMurray Grey Association AmericanMurray Grey Association, P.O. Box 34590, North Kansas City, MO 64116 Phone: (816) 421-1994 FAX: (816) 421-1991 American Pinzgauer Association American Pinzgauer Association, 21555 St. Rt.698, Jenera, OH 45841 Phone: (419) 326-8711 American Red Brangus Association American Red Brangus Association, 3995 E. Highway 290, Dripping Springs, TX 78620 Phone: (512) 858-7285 American Romagnola Association American Romagnola Association, 2000 Flagstone Rd., Reno, NV 89510 Phone: (775) 475-2333 FAX: (775) 475-2697 American Salers Association American Salers Association, 7383 S. Alton Way, Suite 103,Englewood, CO 80112 Phone: (303) 770-9292 Fax: (303) 770-9302 American Simmental Association American Simmental Association, 1 Simmental Way, Bozeman, MT 59715 Phone: (406) 587-4531 FAX: (406) 587-9301 American Shorthorn Association American Shorthorn Association, 8288 Hascall St., Omaha, NE 68124 Phone: (402) 393-7200 FAX: (402) 393-7203 American Tarentaise Association American Tarentaise Association, P.O. Box 34705, North Kansas City, MO 64116 Phone: (816) 421-1993 FAX: (816) 421-1991 American Wagyu Association American Wagyu Association. P.O. Box 4071, Bryan, TX 77805 Phone: (409) 260-0300 FAX: (409) 846-4945 Ankole Watusi International Registry Ankole Watusi International Registry, 22484 W. 239 St., Spring Hill, KS 66083-9306 Phone: (913) 592-4050 WATUSI@AOL.COM Marketing Plan - 310
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Barzona Breeders Association of America Barzona Breeders Association of America, P.O. Box 631, Prescott, AZ 86302 Phone: (602) 445-5150 Beefmaster Breeders United Beefmaster Breeders United, 6800 Park Ten Blvd., Suite 290 West, San Antonio, TX 78213 Phone: (210) 732-3132 Belgian Blue Association of America Belgian Blue Association of America, P.O. Box 6111, Sarasota, FL 34278-6111 Phone: (813) 388-2258; (800) 533-2374 FAX: (813) 388-1790 Braunvieh Association of America Braunvieh Association of America, P.O. Box 1454, Topeka, KS 66601 Phone: (913) 234-9595 British White Cattle Association of America British White Cattle Association of America, P.O. Box 281, Bells, TX 75414-0281 Phone: (903) 965-7718 Foundation Beefmaster Association Foundation Beefmaster Association, 100 Livestock Exchange Building, 4701 Marion St., Denver, CO 80216 Phone: (303) 294-0847 International Beefalo Foundation International Beefalo Foundation, P.O. Box 486, Murfreesboro, TN 37133-0486 Phone: (615) 893-1005 International Brangus Breeders Association International Brangus Breeders Association, P.O. Box 696020, San Antonio, TX 782696020 Phone: (512) 696-8231 FAX: (512) 696-8718 International Red Brangus Breeders Association International Red Brangus Breeders Association, P.O. Box 690771, San Antonio, TX 78269-0771 Phone: (210) 696-8506 International Zebu Breeders Association International Zebu Breeders Association, P.O. Box 1402, Edinburg, TX 78540 Phone: (210) 318-3991 Mid America RX3 Cattle Co. Mid America RX3 Cattle Co., HC 75, Box 158, Sturgis, SD 57785 Phone: (605)347-3319; (800) 215-0763 FAX: (605)347-2207 Piedmontese Association of the United States Piedmontese Association of the United States, 108 Livestock Exchange Building, 4701 Marion St., Denver, CO 80216 Phone: (303) 295-7287 North American Corriente Association North American Corriente Association, 9101 E. Kenyon Ave., #3000, Denver, CO 80237 Phone: (303) 770-0144
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North American Limousin Foundation North American Limousin Foundation, 7383 S. Alton Way, Suite 100, Englewood, Co 80112 Phone: (303) 220-1693 FAX: (303) 220-1884 North America Normande Association North America Normande Association, 11538 Spudville Rd., Hibbing, MN 55746 Phone: (218) 262-1933 North American South Devon Association North American South Devon Association, 7383 South Alton Way, Englewood, CO 80112 Phone: (303) 770-3130 Red Angus Association of America Red Angus Association of America, 4201 I-35 North, Denton, TX 76207-3415 Phone: (940) 387-3502 FAX: (940) 383-4036 www.redangus1.org E-mail: info@redangus1.org Santa Gertrudis Breeders International Santa Gertrudis Breeders International, Box 1257, Kingsville, TX 78363 Phone: (361) 592-9357 www.sgbi.org/~sgbi Texas Longhorn Breeders Association of America Texas Longhorn Breeders Association of America, 2315 North Main St., Suite 401, Fort Worth, TX 76106 Phone: (817) 625-6241 United Braford Breeders United Braford Breeders, 422 East Main, Suite 218, Nacogdoches, TX 75961 Phone: (409) 569-8200 FAX: (409) 569-9556 White Park Cattle Association of America White Park Cattle Association of America, 419 North Water St., Madrid, IA 50156 Phone: (515) 795-2013
P.O. Box 523, Rochester, IN 46975 Phone/FAX: (219) 223-5418 World Watusi Association World Watusi Association, P. O. Box 14, Crawford, NE 69339 Phone: (308) 665-3919
Resource
http://ops.agsci.colostate.edu/~scomstoc/breeds/assoc.html
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Marketing Plan
Foreign Markets
A complete search for ways to forge connections between producers and consumers requires the consideration of foreign as well as domestic markets. Aside from being farther away from the U.S. point-of-production or processing, foreign consumers make beef purchasing decisions with the same things in mind as U.S. consumers. The major drivers of beef demand by consumers worldwide are: safety of the product quality and taste health benefits and nutritional factors ease of preparation and convenience The Foreign Agricultural Service (FAS) division of the United Stated Department of Agriculture (USDA) emphasizes that the best way to achieve export success is to formulate an export strategy based on solid information and sound assessments. Some companies begin export activities haphazardly without carefully screening target markets or options for market entry. While these companies may have a measure of success, they most likely have overlooked better export opportunities. If early export efforts are unsuccessful because of poor planning, a company may be misled into abandoning exporting altogether. The FAS Web site at http://www.fas.usda.gov/agexport/ exporter.html is designed to guide U.S. food and fiber companies, new to exporting, through the information gathering and assessment process that is needed to develop a successful export plan. In 1999, the top five export markets for beef accounted for almost 93 percent of total exports. Japan was the largest U.S. export market for beef, accounting for 52 percent, followed by Mexico with 17 percent, South Korea with about 12 percent, Canada with 10 percent, and Taiwan with 2 percent. The top five U.S. export markets for hides and skins accounted for about 80 percent of the total in 1999. Korea was the largest U.S. export market, accounting for about 31 percent of the total, followed by Taiwan with 17 percent, Mexico with 16 percent, China with 9 percent, and Japan with 8 percent. (Source: U.S. Dept. of Commerce, US. Industry & Trade Outlook 2000.) While a large share of the export business is clearly handled by the major U.S. packers, the diversity and size of the global marketplace also provides a great opportunity for niche market opportunities. A review of a partial list of the packer-members of the U.S. Meat Export Federation provides some idea of who is participating in the global beef marketplace, where they are located and the variety of world demands and destinations.
AK-SAR-BEN AK-SAR-BEN, 3101 S. 24th , Omaha, NE 68108 Phone: (402) 341-8720 This plant is halal certified. Alload, Inc. Alload, Inc., 6280 Manchester Blvd., #215, Buena Park, CA 90621 Phone: (714) 521-2000, ext. 10 Alload, Inc., is a 2-year-old trading company specializing in frozen, grain-fed choice and select short ribs, chuck rolls, fore and hind shanks, and pork bellies. It currently exports to South Korea and hopes to expand its business in this particular market. Green Bay Dressed Beef Green Bay Dressed Beef , 544 Acme St., Green Bay, WI 54308 Phone: (414) 436-6484 This establishment is EU approved for tongue, heart, kidney, liver and stomach only. Bell Export Food Groups Bell Export Food Groups, Pier 19 N, 325 N. Columbus Blvd., Philadelphia, PA 19106 Phone: (215) 829-9090 It currently represents six meat companies on the East Coast and exports to the EU, Russia, Japan, Hong Kong, Singapore, Korea, the Caribbean and the Middle East. The Bruss Company The Bruss Company, 3548 N. Kostner, Chicago, IL 60641 Phone: (773) 282-2900 This establishment is EU approved for muscle meats. Crescent Food Sales, Inc. Crescent Food Sales, Inc., 400 Port Carteret Dr., Cateret, NJ 07008 Phone: (732) 541-0200 Crescent Foods is trader of beef, pork, veal and lamb. Its major export markets are Germany, Denmark, Egypt, Korea, the Philippines, Caribbean, Taiwan, Singapore, South Africa, Hong Kong, Bulgaria and Poland. Custom Meats Corporation Custom Meats Corporation, 1802 Levee St., Dallas, TX 75207 Phone: (214) 747-9606 EU-approved plant produces specialty beef and pork cuts manufactured, packaged and labeled according to customer specifications. Custom Meats is active in the European market. Dallas Crown, Inc. Dallas Crown, Inc., 2000 W. Fair, Kaufman, TX 75142 Phone: (214) 932-3436 This establishment is EU approved for muscle meat. Day-Lee Foods, Inc. Day-Lee Foods, Inc., 13055 E. Molette St., Santa Fe Springs, CA 90670 Phone: 562-802-6835 A purveying and trading company, Day-Lee Foods exports beef, pork, chicken and variety meats to Japan, Korea, Taiwan, Singapore and Hong Kong.
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Eastern Food Exporters Eastern Food Exporters, 100 W. John Robert Thomas Dr., P.O. Box 1299, Exton, PA 19341 Phone: (610) 594-5000 Eastern Food Exporters is exporting beef and pork to Canada, Mexico, Russia, Hong Kong, Caribbean and Eastern Europe. E. Boyd & Associates, Inc. E. Boyd & Associates, Inc., P.O. Box 99189, Raleigh, NC 27624-9189 Phone: (919) 846-8000 Currently, E. Boyd & Associates, Inc., is exporting to Australia, Europe, and East and Southeast Asia. Ellison Meat Company Ellison Meat Company, 1401 Sioux Dr., Pipestone, MN 56164 Phone: (507) 825-5486 The company specializes in frozen, portion-controlled beef and pork products. This plant served as a model facility in implementing USDAs HACCP program. Ellison exports to Japan, Mexico, Thailand and Korea. Emborg Foods USA, Inc. Emborg Foods USA, Inc., 110 Crabapple Road, Suite 103, Roswell, GA 30075-3090 Phone: (770) 643-1213 The Emborg Group is involved in the retail, foodservice and commodity sectors of the food business supplying meat, dairy, seafood and vegetable products to international markets. It operates offices in Aalborg, Denmark; Hamburg, Germany; Moscow, Russia; Dubai, UAE; and Kobe, Japan. Emerald International Trade, Ltd. Emerald International Trade, Ltd., 1218 3rd Ave., Suite 1620, Seattle, WA 98101 Phone: (206) 628-3750 The company specializes in chilled beef and pork and frozen processed meats along with a variety of other food products. Emerald International currently exports to Japan, Taiwan, Hong Kong, China, Russia and Korea. ESS-Food USA, Inc. ESS-Food USA, Inc., 4601 Sheridan St., Suite 420, Hollywood, FL 33021 Phone: (954) 981-1770 ESS-Food USA, Inc., is an importing and exporting trading company handling frozen pork and beef cuts and by-products. Its current export markets are South America, Europe, Russia and the Caribbean. Excel Corporation Excel Corporation, 151 North Main St., P.O. Box 2519, Wichita, KS 67201-2519 Phone: (316) 291-2500 Farmland Foods, Inc. Farmland Foods, Inc., 10150 North Executive Hills Blvd., Kansas City, MO 64153 Phone: (816) 891-1200 Freedman Food Service, Inc. Freedman Food Service, Inc., P.O. Box 1449, Houston, TX 77251-1449 Phone: (713) 229-8000 Freedman Food is a full line distributor of meat products and a purveyor of portion food products. Mexico is its primary export market.
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Frontier Foods International Frontier Foods International, 100 Packer Ave., Philadelphia, PA 19148 Phone: (215) 334-9284 Frontier Foods International is a trader dealing in beef products. This establishment is halal certified. Global Marketing Associates 6445 Powers Ferry Rd., Suite 220, Atlanta, GA 30339 Phone: (770) 859-0911 Global Marketing Associates is an international trading company dealing primarily in frozen beef and pork. It exports to Eastern Europe, Russia, Hong Kong and China. Granpac Foods, Inc. Granpac Foods, Inc., 7124 North Marine Dr., Portland, OR 97203 Phone: (503) 286-6548 Granpac Foods, Inc., produces value added meat products, particularly oriental food type products for the Japanese market. Hanwha International Corp. Hanwha International Corp., 2559 Route 130, Cranbury, NJ 08512 Phone: (609) 655-2500, ext. 713 Hanwha purchases U.S.-manufactured goods for the Korean market, including beef and pork products. It hopes to expand into other Asian markets. Harris Ranch Beef Co. 16277 S. McCall Ave., P.O. Box 220, Selma, CA 93662 Phone: (209) 896-3081 This establishment is halal certified. H & H Meat Products Co., Inc. H & H Meat Products Co., Inc., P.O. Box 358, Mercedes, TX 78570 Phone: (956) 565-6363 Product lines include processed beef products, beef and pork chorizo, portion control products and fully cooked charbroiled and breaded products. H&H exports to Mexico and Korea. This plant is kosher certified. H. Shenson International H. Shenson International, 6029 N. 16th St., Omaha, NE 68110 Phone: (402) 455-6225 Shenson first exported beef to Japan in 1968. It specializes in portion control, slice ready and sliced red meat cuts for export to the food service industry, with beef as its primary product. This establishment is halal certified and is approved for export to Malaysia. HSI is also a Certified Angus Beef Processor. IBP, Inc. IBP, Inc., 800 Stevens Port Dr., Suite 813, Dakota Dunes, SD 57049 Phone: (605) 235-2061 International Trading Co. (Corporate Headquarters) International Trading Co. (Corporate Headquarters), 3100 Canal St., Houston, TX 77003-1698 Phone: (713) 224-5901; (800) 284-3242 International Trading Co., Ltd. (ITC), is a certified ISO 9001 facility. ITC exports processed pork and beef items and canned pork products to Japan, Canada, Mexico, Jamaica, Argentina, Saudi Arabia, Jordan, Kuwait, Bahamas and South Korea. This establishment is halal certified. Marketing Plan - 316
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J.F. ONeill Packing Co. J.F. ONeill Packing Co., 3120 G St., Omaha, NE 68107 Phone: (503) 699-8926 This establishment is halal certified and EU approved for muscle meat. Kraft Foods International Oscar Mayer/Louis Rich Exports Kraft Foods International, Oscar Mayer/Louis Rich Exports, 800 West Chester Ave. (Ra-6S), Rye Brook, NY 10573 Phone: (914) 335-7780 Oscar Mayer Exports produces processed beef and pork products for world markets. L & L Packing Company 527 West 41st St., Chicago, IL 60609 Phone: (773) 285-5400; (800) 628-6328 This establishment is halal certified. Lamex Foods, Inc. Lamex Foods, Inc., 3300 Edinborough Way, Suite 710, Edina, MN 55435 Phone: (612) 844-0585 Lamex Foods, Inc., is a trading company dealing in frozen beef and pork products. It exports to Asia, Latin America and Europe. Lays Fine Foods Lays Fine Foods, 400 East Jackson Ave., Knoxville, TN 37901 Phone: (423) 546-2511 Lays exports to Mexico and Russia. Lee Enterprises, Inc. Lee Enterprises, Inc., 6000 E. Evans Ave., Suite 3-337, Denver, CO 80222 Phone: (303) 759-9468 Lee Enterprises is a trading company concentrating on Japan, Korea and China. All beef and pork muscle meats and variety meats are traded. Local & Western of Texas, Inc. Local & Western of Texas, Inc., 8235 Douglas Ave., Suite 1105 LB67, Dallas, TX 75225 Phone: (214) 750-6633 Local & Western represents companies that have approval to export halal and kosher products, as well as offals, to the EU and pork to the Russian Federation. Loggins Meat Company, Inc. Loggins Meat Company, Inc., 1908 E. Erwin, Tyler, TX 75702 Phone: (903) 595-1011 Loggins Meat Company produces portion control steaks, marinated steaks, hamburger and breaded meat products for export to Canada, Mexico, Malaysia, Japan, Korea, Indonesia, Singapore and the Philippines. This establishment is halal certified. Long Island Beef Company Long Island Beef Company, 565 West St., New York, NY 10014 Phone: (212) 243-1120 Long Island Beef Company exports to the EU, Latin America and the Caribbean.
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Notes
Louis Dreyfus Corporation Louis Dreyfus Corporation, 10 Westport Rd., Wilton, CT 06897-0810 Phone: (203) 761-2000 Louis Dreyfus is a purveyor/trader of chilled beef sets and offals produced to Asian specifications. Its major export markets are Canada and Japan. MacDonald Meat Company MacDonald Meat Company, 2709 Airport Way South, Seattle, WA 98134 Phone: (206) 623-7993 The MacDonald Meat Company exports to Taiwan, Thailand, the Philippines, Japan, Indonesia and Singapore. MacDonald Meats is a Certified Angus Beef processor. Meat Commodities, Inc. Meat Commodities, Inc., 339 Merrimon Ave., Asheville, NC 28801 Phone: (828) 258-0120 Meat Commodities, Inc., is a beef, pork and poultry trader. Its major markets include Russia, Europe and Canada. MeatLink, Inc. MeatLink, Inc., 16247 N. 108TH Way, Scottsdale, AZ 85259 Phone: (480) 419-8013 MeatLink, Inc., is a trading company dealing with U.S. beef and pork products. The company is especially interested in the export business to Mexico, South Africa and Russia. Meta Foods, L.L.C. Meta Foods, L.L.C., 5730 Glenridge Dr., Suite 302, Atlanta, GA 30328-5398 Phone: (404) 843-2400 Meta Foods primary product lines are fresh and chilled beef and pork products and pork and beef offals. Its major export markets are Japan, Korea, Hong Kong, China, ASEAN, Russia and Eastern Europe. Midamar Corporation Midamar Corporation, 1105 60th Ave. SW, P.O. Box 218, Cedar Rapids, IA 52404 Phone: (319) 362-3711 FAX: (319) 362-4111 E-mail: midamar@mwci.net Midamar Corporation is a contract slaughter plant, warehouse and distribution center. This establishment is halal and kosher certified. Midway Provision Midway Provision, 401 South Main, Wayland, MI 49348 Phone: (616) 792-6231 Midway Provision is a trading company dealing in the sale of beef, pork and byproducts, as well as products for the pharmaceutical industry. It exports to Hong Kong, China, Taiwan, Japan and Mexico. Mirasco, Inc. Mirasco, Inc., 900 Circle 75 Pkwy., Suite 175, Atlanta, GA 30339 Phone: (770) 956-1945 Mirasco is a worldwide organization specializing in the exportation of meat products. It serves halal customers in the Middle East. The company has offices in Alexandria, Egypt; Cairo Egypt; Montevideo, Uruguay; and Mar del Plata, Argentina.
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Monfort International (Division of ConAgra Refrigerated Foods International) Monfort International (Division of ConAgra Refrigerated Foods International), P.O. Box G, Greeley, CO 80632 Phone: (970) 353-2311 Northern Beef Industries, Inc. 311 RR 620 South, Suite 103, Austin, TX 78734 Phone: (512) 263-8763 Northern Beef Industries, Inc., specializes in beef and pork offals and grinding materials. Its main export market is Mexico. Omaha Steaks Food Service Omaha Steaks Food Service, P.O. Box 3300, Omaha, NE 68103-0300 Phone: (402) 597-8100 Omaha Steaks is a purveyor and marketer of steaks, meats and other gourmet foods. It offers customized products such as Omaha Steaks Angus Beef and USDA Prime and Choice. Its export markets are the Caribbean and the Pacific Rim countries. Parker International, Inc. Parker International, Inc., 265 E. 100 South, Suite 300, Salt Lake City, UT 84111 Phone: (801) 531-6565 Parker International, Inc., is a trader of beef and pork products as well as a distributor of beef, beef offals and white cow products under its private label Cowboy brand. Its export markets are Japan, Korea, Hong Kong, Indonesia and Eastern Europe. Provimi Veal Corporation Provimi Veal Corporation, W. 2103 County Rd., Seymour, WI 54165 The company is halal certified and EU approved for offals and muscle meats. Quirch Foods Company Quirch Foods Company, P.O. Box 3366, Hialeah, FL 33013 Phone: (305) 691-3535 Quirch Foods supplies utility, no roll, select, Angus and Choice beef to its customers and operates a portion control facility to hand-cut and individually vacuum pack a variety of cuts for specific use in the foodservice sector. Quirch currently exports to Mexico, Brazil, Colombia, Venezuela, Ecuador, Peru, Suriname, Costa Rica, Honduras, Guatemala, Nicaragua and Panama. It also supplies customers in Haiti, the Dominican Republic, Jamaica, the Bahamas, Turks & Caicos Islands, Antigua, Barbados, St. Martin, St. Barts and the Cayman Islands. The company would like to further develop these markets and also would like to expand into Asia. Rain or Shine International Rain or Shine International, P.O. Box 720427, Dallas, TX 75372 Phone: (214) 219-0780 Rain or Shine International is a vertically cooperative beef export operation. Through agreements with feedlots and a custom slaughter and fabrication operation, the entire chain from cattle purchasing to feeding to fabrication is customized according to the specifications of the buyer. It exports to Mexico and Korea. Ruprecht Company Ruprecht Company, 370 North Carpenter St., Chicago, IL 60607-1223 Phone: (312) 829-4100 The company specially selects and ages top quality beef to produce steaks and chops according to individual customer specifications. Ruprecht exports to the Caribbean and to Mexico. It would like to export to Japan. Marketing Plan - 319
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R.W. Meats R.W. Meats, 5001 West 80th St., Bloomington, MN 55437 Phone: (612) 897-1134 R.W. Meats is a trader of beef, pork, lamb, veal, mutton and offals including byproducts, cuts and processing materials. Its current export markets are Canada, Mexico, Chile, Peru and Russia. Sakashita Meat Supply Corporation Sakashita Meat Supply Corporation, 1281 Cabrillo Ave. #306, Torrance, CA 90501 Phone: 310-328-0000 Main product lines include beef, beef offal, and pork products. Sakashitas export business is in Japan, Korea and Brazil. Simeus Foods International, Inc. Simeus Foods International, Inc., 812 South 5th Ave., Mansfield, TX 76063 Phone: (817) 473-522 Primary products are portion controlled steaks, breaded products, pork sausage, cooked meat products and ground beef patties. Brazil is the main export market. This establishment is halal approved for Indonesia. Simplot Meat Products, Inc. Simplot Meat Products, Inc., P.O. Box 1158, Nampa, ID 83653-1158 Phone: (208) 466-2478 Simplot Meat Products export markets are Asia, Latin America, Canada, Australia and New Zealand. Taylor Packing Company, Inc. Taylor Packing Company, Inc.. Route 706, P.O. Box 188, Wyalusing, PA 18853 Phone: (717) 746-3820 This establishment is EU approved for offals. TREX Corporation TREX Corporation, 1200 Bayhill Dr., Suite 122, San Bruno, CA 94066 Phone: (415) 589-4000 TREX Corporation, an export trading company, deals in beef and beef variety meats, pork, lamb, and cooked and processed meat items. TREX is the exclusive representative for several packers and processors and is a licensed exporter of Certified Angus Beef. It exports to Japan, Taiwan and Korea. W&G Marketing Company, Inc. W&G Marketing Company, Inc., P.O. Box 1742, 413 Kellogg Ave., Ames, IA 50010 Phone: (515) 233-4050; (515) 232-5057 FAX: (515) 233-6229 Washington Beef, Inc. Washington Beef, Inc., 201 Elmwood Rd., P.O. Box 832, Toppenish, WA 98948 Phone: (509) 865-2121 The company produces portion control, patties, corned beef, marinated items, pork chops, lamb chops and some chicken items. Specialty items are available for export, including crown cut tongues, peeled skirts, sliced oxtails, sliced short ribs, sliced feet, sliced back ribs. This establishment is EU approved for offals and muscle meats.
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Good markets for different products and specialty processing are factors on the plus side. Other cultures enjoy different tastes. Sensitivity to genetically modified (GMO) products may translate into an opportunity to supply non-GM, organic or natural food items. Another example is variety meats, which are well accepted in many foreign countries but not the U.S. When seeking value added, dont overlook the minor items and simply capitulate those opportunities to someone else. There are emerging markets close to home that may represent less challenging logistics for the niche marketer. The Mexican market is an example of a substantial market for beef that is showing a positive trend. The cruise ship industry has grown tremendously and offers a high-end market of its own to those who can offer something special in product or service. Relationships are key to all marketing. In the foreign arena this is doubly true. Work with people who know the territory and can help you interpret the culture and language. You will need a credible interface to quickly build trust. And you will need to be highly responsive to the customer. As in all markets today, you have the equivalent of one shot at the deal and that situation renews itself every day. Keep in mind several key points. Foreign markets automatically demand a different product mix than domestic markets. That offers great opportunity for market diversity. Probability is high that foreign economies will run on cycles that dont match those in the U.S., which is an advantage if you have some presence in both arenas. Currency values can offer opportunity or a hurdle. Politics are a wild card. We are in a global economy so the businesses increasingly expect to do business across borders. Digital technology can make this market possible for the smaller player.
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sponsored receptions in various countries trade shows and/or missions host buying missions
Buying Missions Buyers from countries such as Japan, Korea, Mexico and China are brought to Iowa to meet with processors. IDED helps these buyers with their expenses and provides transportation while they are in the state. Iowa companies are contacted to determine their interest, and appointments are scheduled to help them access the buyers in the visiting delegations. For more information about this program, contact: Mark Fischer, Marketing Manager Iowa Department of Economic Development, International Marketing Division Phone: (515) 242-4760 FAX: (515) 242-4918 E-mail: mark.fischer@ided.state.ia.us Export Trade Assistance Program (ETAP) Participation in international trade shows and trade missions is one of the most effective ways to enter into new international markets or expand visibility in existing markets. Trade shows offer the opportunity to meet potential buyers, test market interest and evaluate the competition. A trade mission can be a very efficient and cost effective means to meet potential distributors and buyers. Licensing agreements and joint ventures have also resulted from trade missions. The State of Iowa offers financial assistance to Iowa companies who wish to take advantage of international trade shows and trade missions to enter new markets. Through ETAP, the International Marketing Division of the Iowa Department of Economic Development will reimburse a sizable portion of a companys eligible direct expenses per pre-approved event. Eligible expenditures may include: booth space rental booth construction at show site booth equipment and/or furniture rental booth utility costs freight costs of equipment and/or exhibit materials to and from show interpreter fees at show site participation fees for trade missions sponsored by the Iowa Department of Economic Development, the Iowa Department of Agriculture and Land Stewardship, the U.S. Department of Commerce or the U.S. Department of Agriculture per diem (meals & lodging) for one employee for the duration of the event (rates calculated at 50 percent of the U.S. Department of State Standardized Regulations) To be eligible to participate in ETAP, applicants must: Employ fewer than 500 individuals. Have at least 75 percent of employees employed within Iowa. Exhibit products, services or samples of Iowa manufactured, processed or value added products or agricultural commodities in conjunction with a foreign trade show or trade mission. Have at least one full-time employee or sales agent participate in the event. Marketing Plan - 323
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Utilization of the ETAP funds are limited by the following: three events per state fiscal year participation in the same trade show not allowed in consecutive years participation in the same trade show a maximum of two times one trade show in a specific country per state fiscal year For more information, contact: Iowa Department of Economic Development, International Marketing Division Iowa Department of Economic Development, International Marketing Division, 200 East Grand Ave., Des Moines, IA 50309 Phone: (515) 242-4760 FAX: (515) 242-4918 E-mail: mark.fischer@ided.state.ia.us Web site: http://www.state.ia.us/international
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Short Courses Conferences, seminars and workshops are held to address specific export issues. Consultations with individual companies address specific product issues. A variety of short courses designed to provide the latest information in processing technology are offered to commercial meat processors throughout the year. Meat Laboratory This state-of-the-art meat laboratory supports technology and product development. The lab has full processing capabilities starting with slaughter for poultry and red meats. Further processed meats, such as franks, luncheon meat and fermented products, also can be made. The lab is available to private companies for product and process development. To request services, contact: Randy Petersohn Randy Petersohn, 194B Meat Laboratory, Iowa State University, Ames, IA 50011-3150 Phone: (515) 294-5321 FAX: (515) 294-6328 E-mail: randall@iastate.edu Market Studies New and expanding international markets for U.S. meat and meat products are evaluated. Researchers study and develop models of the livestock and meat industries of selected international markets. Models developed in these studies 1) determine relationships of price, demand and supply and 2) show possible changes in these relationships due to alternative public policies. Included in these studies are cultural characteristics that affect current and future demand as well as consumption of meat and meat products, descriptions of marketing systems, distribution, transportation, demographics and political profiles affecting public policies. Product and Process Development Every international market has unique requirements and specifications for meat products. Identification of market needs leads to development of products that are potentially successful in specific markets. Researchers, using the extensive pilot plant facilities in the ISU Meat Lab and often in cooperation with meat product manufacturers, develop formulations and processes suited to products designed for specific international markets. Value Added Utilization MERC researchers strive to add value to beef and pork primal cuts by working with industry creating new or novel further processed products that fit foreign consumers tastes. Further processed meat products not only enhance the carcass value of the livestock by taking the product out of the commodity mode, but add to economic development as well. Meat Safety and Meat Quality The safety and quality of U.S. meats are critical determinants of U.S. export volumes. MERC researchers examine ways to reduce or eliminate pathogenic contamination, extend shelf life (Linear Accelerator Facility), find objective measures of quality and convey to foreign officials and foreign buyers the knowledge that U.S. meat is safe and wholesome. Marketing Plan - 325
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Information and Technology Transfer After gathering international market information and product technology, knowledge is transferred to processors, producers and exporters. MERC produces a newsletter, U.S. Meat Export Analysis and Trade News, and holds seminars, workshops and conferences to disseminate this information. The conferences and seminars provide a forum in which key people with expertise in international meat and meat product trade share information that will lead to expansion of meat and meat product exports. For additional information, contact: Sev Johnson Sev Johnson, Meat Export Research Center Phone: (515) 294-8899 FAX: (515) 296-6272 E-mail: sevjohns@iastate.edu www.ag.iastate.edu/centers/merc/
money to help U.S. producers and exporters finance promotional activity in foreign countries. This program is not only for market development. It includes market research, technical assistance and service after the sale. The Supplier Credit Guarantee Program (SCGP), CCC guarantees a portion of payments due from importers under short-term financing (up to 180 days) that exporters have extended directly to the importers for the purchase of U.S. agricultural commodities and products. These direct credits must be secured by promissory notes signed by the importers. Two programs underwrite credit extended by the private banking sector in the United States (or, less commonly, by the U.S. exporter) to approved foreign banks using dollardenominated, irrevocable letters of credit to pay for food and agricultural products sold to foreign buyers. The Export Credit Guarantee Program (GSM-102) covers credit terms up to three years. The Intermediate Export Credit Guarantee Program (GSM-103) covers longer credit terms up to 10 years. FAS is an important stop for any company wishing to begin exporting. It has an extensive Web site at www.fas.usda.gov/. Additionally, the Midwest has a local outreach office. Scott Bleggi can provide detailed information about the programs available through FAS. Scott Bleggi, Director Scott Bleggi, Director, FAS Outreach Office, 10500 Buena Vista Ct., Des Moines, IA 50322-3782 E-mail: bleggi@fas.usda.gov or scott.bleggi@bbs.fsa.usda.gov
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As family farmers and ranchers, cattlemen share an interest in meeting the needs of consumers worldwide by providing high-quality, nutritious beef, while setting higher quality and safety standards than those required by the government. For further information, access http://www.beef.org/ or contact: Denver National Cattlemens Beef Association National Cattlemens Beef Association, 5420 South Quebec St., Greenwood Village, CO 80111 Phone: (303) 694-0305 FAX: (303) 694-2851 Washington, D.C. National Cattlemens Beef Association National Cattlemens Beef Association, 1301 Pennsylvania Ave. NW, Suite 300, Washington, D.C. 20004 Phone: (202) 347-0228 FAX: (202) 638-0607
Other Resources
This select subject directory contains a quick reference to frequently asked marketing and trade assistance resources on agribusiness, exports, imports and related topics. Additives, Food and Color - Foreign Regulations Additives, Food and Color - Foreign Regulations, Office of Food Safety and Technical Service, FAS, USDA Phone: (202) 720-2239 AgExport Connections AgExport Connections, AgExport Services Division, FAS, USDA Phone: (202) 720-7409 FAX: (202) 690-4374 Agribusiness Development Program Agribusiness Development Program, Food Industries Division, International Cooperation and Development, FAS, USDA Phone: (202) 690-1339 Agribusiness-Information Agribusiness-Information, Food Industries Division, International Cooperation and Development, FAS, USDA Phone: (202) 690-2981 FAX: (202) 690-3982
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Buyer Alert Program Buyer Alert Program, AgExport Services Division, FAS, USDA Phone: (202) 690-3421 FAX: (202) 690-4374 Calendar of Food, Beverage, Trade Shows, International/FAS Sponsored Calendar of Food, Beverage, Trade Shows, International/FAS Sponsored, AgExport Services Division, FAS, USDA Phone: (202) 690-1182 FAX: (202) 690-4374 Commodity Credit Corporation - CCC, Direct Export Sales Commodity Credit Corporation - CCC, Direct Export Sales, Commodity Credit Corporation Operation Division, FAS, USDA Phone: (202) 720-5540 FAX: (202) 720-0938 Cooperator Programs Cooperator Programs, Marketing Operations Staff, FAS, USDA Phone: (202) 720-5521 FAX: (202) 720-9361 Credit Guarantees Credit Guarantees, Program Development Division, FAS, USDA Phone: (202) 720-4216 Credit Guarantees, Types GSM-102 & GSM-103 Credit Guarantees, Types GSM-102 & GSM-103, Commodity Credit Corporation Operation Division, FAS, USDA Phone: (202) 720-3324 Dairy, Livestock and Poultry Division - Marketing/Trade Information Dairy, Livestock and Poultry Division - Marketing/Trade Information, FAS, USDA; Phone: (202) 720-8031 FAX: (202) 720-0617 Market Promotion Programs Phone: (202) 720-2461 Dairy Export Incentive Program & Export Enhancement Program Phone: (202) 720-8870 Emerging Markets Office Emerging Markets Office, FAS, USDA Phone: (202) 720-0368 Export Enhancement Program (EEP) Export Enhancement Program (EEP), Commodity Credit Corporation Operation Division, USDA Phone: (202) 720-3241; (202) 720-5540 Exporters - U.S. Supplier List Exporters - U.S. Supplier List, AgExport Services Division, FAS, USDA Phone: (202) 690-3421 Exports Certification/Regulation Exports Certification/Regulation Food and Cosmetics, U.S. Food & Drug Administration, USFDA Phone: (202) 205-4573 Animals Phone: (301) 734-3277 Marketing Plan - 330
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Food Consumption, Prices & Expenditures Food Consumption, Prices & Expenditures, Economic Research Service, USDA; Phone: (202) 694-5449 Food Manufacturing Industry & Competition Food Manufacturing Industry & Competition, Economic Research Service, USDA Phone: (202) 694-5376 Food Safety Food Safety, U.S. Food and Drug Administration Phone: (202) 205-4726 Food Safety Hotline, Food Safety Inspection Service, USDA Phone: (202) 720-3333; (800) 535-4555 Foreign Buyer/Importer Lists Foreign Buyer/Importer Lists, AgExport Services Division, FAS, USDA Phone: (202) 690-3416; FAX: (202) 690-4374 Foreign Trade Data Service Foreign Trade Data Service, U.S. Bureau of the Census, Economics and Statistics Administration, USDOC Phone: (301) 457-3041; (301) 457-2227 Frozen Foods Frozen Foods, Commodity and Marketing Division, FAS, USDA Phone: (202) 720-1034 Industry Desk, USDOC Phone: (202) 482-3346 Harmonized Tariff Schedule - Classification Harmonized Tariff Schedule - Classification, Multilateral Trade Negotiations Division, FAS, USDA Phone: (202) 720-6064 FAX: (202) 720-1139 Harmonized Tariff Schedule - Updating Harmonized Tariff Schedule - Updating, U.S. International Trade Commission Phone: (202) 205-2602 Health and Sanitary Foreign Regulations Health and Sanitary Foreign Regulations, Office of Food Safety and Technical Service, FAS, USDA Phone: (202) 720-2239 Imports Animal Health Protection, Animal and Plant Health Inspection Service, USDA Phone: (301) 734-8170 Central America, Food Industries Division, International Cooperation and Development, FAS, USDA Phone: (202) 690-2981 FAX: (202) 690-3982 Food Safety Inspection of Imports, U.S. Food and Drug Administration Phone: (202) 205-4726 Hides and Skins Imports, Dairy, Livestock and Poultry Division, FAS, USDA Phone: (202) 720-7285; (202) 720-3690 FAX: (202) 720-0617 Laws-U.S., Import Policies and Programs Division, FAS, USDA Phone: (202) 720-1330 Marketing Plan - 331
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Livestock Import Regulations, Animal and Plant Health Inspection Service, USDA Phone: (301) 734-8170 U.S. Customs Service Imports, U.S. Customs Service, U.S. Department of the Treasury Phone: (202) 927-6724 FAX: (202) 927-1393 Labeling - Foreign Requirements Labeling - Foreign Requirements, Office of Food Safety and Technical Services, FAS, USDA Phone: (202) 720-9408. Labeling - U.S. Meat and Poultry Labeling - U.S. Meat and Poultry, Food Safety Inspection Service, USDA Phone: (202) 418-8900. Market News Market News, Agricultural Marketing Service, USDA. Dairy Phone: (202) 720-7461 FAX: (202) 720-4844 Livestock and Grain Phone: (202) 720-6231 FAX: (202) 690-3732. NAFTA (North American Free Trade Agreement) NAFTA, (North American Free Trade Agreement), Asia, Africa and Eastern Europe Division, FAS, USDA Phone: (202) 720-1325; (202) 720-9469 Snack Foods Snack Foods, Commodity and Marketing Programs, FAS, USDA Phone: (202) 720-1034 Tariff-Rate Quotas Beef, Dairy, Livestock and Poultry Division, FAS, USDA Phone: (202) 720-6553 FAX: (202) 720-0617 Dairy, Import Policies and Programs Division, FAS, USDA Phone: (202) 720-9439 FAX: (202) 720-6556 Transportation Transportation, Shippers and Exporter Assistance, Agricultural Marketing Service, USDA Phone: (202) 690-1304 FAX: (202) 690-1340
Chambers of Commerce
Complete listings of worldwide chambers of commerce can be accessed on the following Internet sites: International Chamber of Commerce (ICC) www.iccwbo.org/
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Internet Sites
U.S. Department Of Agriculture (USDA) Agricultural Marketing Service (AMS) www.ams.usda.gov/ Agricultural Research Service (ARS) www.ars.usda.gov/ Alternative Agricultural Research and Commercialization Corporation (AARC) www.usda.gov/aarc/ Animal and Plant Health Inspection Service (APHIS) www.aphis.usda.gov/ Cooperative State Research Education and Extension Service (CSREES) www.reeusda.gov/ Current Research Information System (CRIS) cristel.nal.usda.gov: 8080 Economic Research Service (ERS) www.econ.ag.gov/ Food Safety and Inspection Service (FSIS) www.fsis.usda.gov/ FSIS Export Library www.fsis.usda.gov/OFO/export/explib.htm Foreign Agricultural Service (FAS) www.fas.usda.gov/ Marketing Plan - 333
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Food, Beverage, Trade Shows www.fas.usda.gov/agexport/shows/tshow.html Grain Inspection, Packers and Stockyards Administration (GIPSA) www.usda.gov/gipsa/ National Agricultural Library (NAL) www.nal.usda.gov/ NAL Reference and Information Centers General Reference Services www.nal.usda.gov/ref/ Agricultural Trade & Marketing Information Center (ATMIC) www.nal.usda.gov/atmic/ Alternative Farming Systems Information Center (AFSIC) www.nal.usda.gov/afsic/ Animal Welfare Information Center (AWIC) www.nal.usda.gov/awic/ Food and Nutrition Information Center (FNIC) www.nal.usda.gov/fnic/ Plant Genome Data & Information Center (PGDIC) www.nal.usda.gov/pgdic/ Rural Information Center (RIC) www.nal.usda.gov/ric/ Technology Transfer Information Center (TTIC) www.nal.usda.gov/ttic/ Water Quality Information Center (WQIC) www.nal.usda.gov/wqic/ National Agricultural Statistics Service (NASS) www.usda.gov/nass/ Rural Development/Rural Business-Cooperative Service (RD/RBCS) www.rurdev.usda.gov/rbs/
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U.S. Federal Aviation Administration www.faa.gov/ U.S. Food and Drug Administration www.fda.gov/ U.S. Information Agency www.usia.gov/ U.S. International Trade Commission www.usitc.gov/ U.S. Office of the U.S. Trade Representative www.ustr.gov/ U.S. Peace Corps www.peacecorps.gov/ U.S. Trade and Development Agency www.tda.gov/
Monthly Summary of Export Credit Guarantee Program Activity. Monthly ($70 domestic; $120 foreign). Shows fiscal year commitment figures for the Commodity Credit Corporations Export Credit Guarantee Program (GSM-102) and Intermediate Credit Guarantee Program (GSM-103) activities. U.S. Export Sales. Weekly, based on reports submitted by private exporters ($175 domestic; $320 foreign). Outstanding exports sales as reported and compiled with other data give a snapshot view of the current contracting scene. All countries with outstanding sales or accumulated exports are included for each class of wheat, all wheat, wheat products, corn, soybeans, soybean cake and meal, American prima cotton, all upland cotton, and cattle hides. World Agricultural Production. Monthly ($95 domestic; $160 foreign). Provides information on U.S. and world production of major agricultural products, including crop, livestock and forestry estimates, weather and production briefs, and special articles of interest to the trade.
Publications listed below are published by the Economic Research Service (ERS), U.S. Department of Agriculture (USDA), and are available via subscription from: ERS-NASS, 341 Victory Dr., Herndon, VA 22070. Phone: (800) 999-6779 (Canada and U.S.); other areas (703) 834-0125; FAX: (703) 834-0110. Food Aid Needs and Availabilities: Projections for 2005. Research report, October 1995 ($12). Stock # GFA-6. Examines the long-term prospects for global food aid needs and for food aid availabilities from donor countries. The Food Marketing System in 1996. Gallo, Tony E.; research report, August 1997 ($7.50). Stock # AIB-717. Analyzes and assesses yearly developments in the nations food marketing system, including industry growth, structure, conduct and performance of food processors, wholesalers, retailers and foodservice firms. Global Review of Agricultural Policies: Western Hemisphere. September 1994 ($12). Stock # SB-892. Describes policies that affect the agricultural sector in 25 countries in the Western Hemisphere, including policies that affect commodity and input prices, activities of government-owned companies and integration of economies in the Western Hemisphere. Industrial Uses of Agricultural Materials. Annual, issued in October ($15). Stock #IUS-1996. Examines how agricultural materials are used by industry. Covers agricultural materials in seven categories: starches and carbohydrates, fats and oils, fibers, animal products, forest products, natural plant products, and natural rubber and resins. International Agricultural and Trade Reports Five-report series includes: China, Europe, Newly Independent States and the Baltics, Apec and NAFTA. Five issues ($26 domestic; $32.50 foreign; single copies are $9 domestic; $11.25 foreign). Each report explains how basic forces are changing agriculture and agricultural trade. Also includes short- and long-term production, consumption and trade of the regions key commodities. Situation and Outlook Report Outlook for U.S. Agricultural Exports. Three issues ($17). Stock # AES. Offers the latest value and volume of U.S. farm exports, by commodity and region, as well as agricultural trade balance, import commodities and export outlook.
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Marketing Plan
Organic Markets
Organic has become a universal term to describe an array of products, practices and procedures perceived as healthy for man, animal and the environment. Worldwide, there are now almost 600 organic producer associations in 70 countries. (http:// www.nofavt.org/Organic%20faq2.htm) Each has developed its own version of the meaning of organic. Virtually all definitions tend to share a degree of meaning, yet each definition has its own unique features. It is important to gather some understanding of how various sectors of the food market place tend to interpret the term organic. Organic on the label generally implies to the consumer that: The product was grown with a dedication to agricultural practices that strive for a balance with nature, using methods and materials that are of low impact to the environment. The product was created as a result of a commitment to maintain and replenish soil fertility with the belief that the highest quality foods are grown on healthy land. The contents have been minimally processed to maintain the integrity of the food without artificial ingredients, preservatives or irradiation. Organic to the livestock producer generally means farms have been inspected to verify they meet rigorous standards that mandate the use of organic feed; prohibit the use of antibiotics; and give animals access to the outdoors. Production methods are selected based on criteria that meet all federal, state and local health regulations; work in harmony with the environment; build biological diversity; and foster healthy soil and growing conditions. Organic generally also means market animals were raised without the use of toxic persistent pesticides, antibiotics and parasiticides
(http://www.worldwise.com/sustainable_living/fact_sheets/food.html) A natural label does not guarantee the product has been organically produced and processed according to the rules of a private certification entity, although it does mean there has been a minimization of synthetic inputs and it may have been produced and processed according to those rules. In some cases, products labeled as natural have possibly originated from growing and processing operations that are phasing into organic production but have yet to achieve a certifiable status.
Domestic Market Trends for Organic Products Information gathered from various sources generally agrees that the growth rate being experienced in the U.S. is mostly representative of what is happening in other developed nations.
The upward consumption trends in the natural foods market are now significant. They are no longer products of choice for just a small group of consumers. In ever increasing numbers, consumers are seeking what they perceive as healthful, safe food, often with the caveat that it is produced in an environmentally friendly way. Companies across the spectrum of the food system are working hard to respond quickly and accurately to these preferences. (http://www.hawiaa.org) Several market studies conducted in recent years have described a sector of the market comprising about 25 percent of the U.S. adult population (between 40-50 million Americans) whose purchasing decisions are increasingly guided by their social and environmental values. Presently measured at somewhere between 3 to 5 percent of the total food market, industry analysts propose that by 2008, organic foods will make up nearly 10 percent of the total retail foods market. (http://www.hawiaa.org ) Public and private research groups register the growth rate of the natural and organic food business somewhere between 14 and 20 percent per year for the last seven to 10 years. This expansion is remarkable when compared to a growth rate for mass market foods of an average of only 3 to 5 percent from 1990 to 1997. (http://www.hawiaa.org ) Virtually all projections tend to agree that U.S. sales will continue upward at a very healthy rate for at least the next several years with some guessing the present rate-ofgrowth to continue until at least 2010.
chains in the Netherlands, Albert Heijn and Konmar. The Dutch government actively supports the organic food industry, aiming to advance market share from less than 1 percent of total food consumption to as much as 6-10 percent. In February 1997, the Dutch Government implemented a roughly $33-million action plan to stimulate production, distribution and sales of organics. (http://www.fas.usda.gov/info/agexporter/ 1997/dutch.html) Austria As there are probably opportunities for Austrian organic products on the EU market, agricultural representatives are interested in the expansion of organic agriculture. About two-thirds of organic production is sold on the domestic market and the rest is exported. Imports include mainly fruits, vegetables and feed. Of U.S. products, best opportunities are for tree nuts and dried fruits. (http://www.fas.usda.gov/scriptsw/AttacheRep/ gain_display_report.asp?Rep_ID=25546221.0) Belgium-Luxembourg Organic farming in Belgium is poised for growth with the potential for a ten-fold increase in the number of producers. (http://www.fas.usda.gov/scriptsw/AttacheRep/ gain_display_report.asp?Rep_ID=25495561.0) France Organic food is still a niche market in France in terms of value, representing 0.5 percent of total French retail food sales. However, it constitutes a growing market both for sales and the image it transmits to consumers. As a result of the French government action plan to stimulate organic agricultural production and distribution in France, sales of organic products are expected to reach FF 15 billion ($2.5 billion) by the year 2003. (http:// www.fas.usda.gov/scriptsw/AttacheRep/gain_display_report.asp?Rep_ID=25545926.0) Germany Germany is one of the worlds largest producers and consumers of organic food products. Significant opportunities exist for U.S. organic food and beverage exporters who are prepared to invest the resources necessary to properly market their product in Germany. (http://www.fas.usda.gov/scriptsg/gain_display_report.exe?Rep_ID=10006016) China The interest in Green Food is rising quickly. It is apparent that while the people are attaching importance to the construction of a more ecological environment, they are also attaching more importance to the evolution of healthy and nutritious food. (http:// www.fas.usda.gov/scriptsg/gain_display_report.exe?Rep_ID=10005512) Hong Kong Organic food sales have grown slowly since the early 1990s as local Chinese have become increasingly health conscious. Organic foods are marketed as health foods here, and therefore carry the positive health food image. Best prospects for increased sales are baby food, rice cakes, grains, fruit juice and breakfast cereal. (http://www.fas.usda.gov/scriptsw/AttacheRep/ gain_display_report.asp?Rep_ID=25606931.0) Marketing Plan - 339
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Japan Total sales, including foods marketed as no chemical and reduced chemical, are forecast to jump 15 percent in 1999 to almost $3 billion. Fresh fruits and vegetables account for more than three-fourths of the total. (http://www.fas.usda.gov/scriptsw/ AttacheRep/gain_display_report.asp?Rep_ID=25535985) Republic of Korea The market for organic products is relatively small, but has grown rapidly over the past 10 years. Current import regulations are ambiguous, but favor processed organic ingredients. A majority of consumers surveyed indicated plans to purchase more organic foods, while a third indicated a willingness to pay 50 percent more for organic products. (http://www.fas.usda.gov/scriptsw/AttacheRep/ gain_display_report.asp?Rep_ID=25606800.0) Mexico In 1985, there were virtually no health food stores in Mexico; now an estimated 500 exist, more than 90 percent of which are located in Mexico City and Monterrey. The health food industry is now a $300 million per year business at retail. Retail chains are becoming more important: Chains represent about 100 stores, or 20 percent of the total. They handle mainly imported products and sell over 80 percent of Mexicos health food imports. The major chains are Super Soya, Nutrisa, GNC, Nutrisoya and Golden Harvest. U.S. products play a major role in the Mexican health food market. (http:// www.fas.usda.gov/scriptsg/gain_display_report.exe?Rep_ID=10002682) Argentina Organic production is estimated at $20 million, of which 85 percent is exported and only 15 percent destined for domestic consumption. However, with the largest per capita GDP in Latin America and the increasing interest of supermarkets in organic products, good possibilities are opened for a larger demand of both domestic and imported organic products. (http://www.fas.usda.gov/scriptsw/AttacheRep/ gain_display_report.asp?rep_ID=25606944.0) Brazil Organic farming is growing at an estimated annual rate of 20 percent, although from a very small base. Although largely limited to crops, organic animal production is growing as well. Brazil is also exporting some organic products, such as soybeans and sugar. Imports are insignificant, and undocumented, but market opportunities exist. A final rule to regulate organic farming is due soon.
Recurring Themes
All farm operations are unique no matter what practices are being used. However, there are several points that seem to be mentioned repeatedly when discussing the transition period with groups of producers who have integrated the organic philosophy into their operations. Production methods changed dramatically. Making the change was not easy. They had to learn by trial and error. They had to discover new sources for information.
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They had to learn to think organically. There was greater integration of the farm and livestock system. There was renewed emphasis on grazing room for all livestock There was an initial dip in output, frequently followed by return to near normal levels of production plus advantage of reduced inputs. There was additional emphasis on record keeping for certification maintenance. More time was needed for marketing and procurement of acceptable inputs and supplies. Nearly as much time was spent on marketing as on production.
Once producers have identified which markets they will be selling to, it is best to go to those markets and ask which certification they need.
use of the term organic on the labeling of meat and poultry products in the absence of a uniformly accepted definition. Thus, producers may wish to continue the use of animal production claims on meat and poultry labeling. Examples of animal production claims are No Hormone Implants Used in Raising, Raised without Added Hormones, No Antibiotics Used in Raising, Corn Fed, Fed an All Vegetable Diet, Raised in an Open Pasture, and Free Range. The system FSIS has in place for evaluating the necessary supporting documentation to ensure the accuracy of animal production claims, such as producer affidavits and raising protocols, will continue to be used whenever these types of claims are made. The term natural may be used when products contain no artificial ingredients and are no more than minimally processed in accordance with FSIS Policy Memo 055. This term may be used in combination with the claim certified organic by (a certifying entity) when the conditions of the policy are met. Selecting a Certification Entity Once producers have identified which markets they will be selling to, it is best to go to those markets and ask which certification they need. When trying to think organically, always keep in mind that the central theme in the organic process is continuous tracking of product from time and place of origin to final point of purchase. Again, this is the reason many present organic producers and processors maintain certifications with one, two, three or maybe even four different private certification entities to make sure their product always has the opportunity to move into the best market while still wearing an organic label. Exemptions There may be cases where your operation is exempt. Under the Organic Foods Production Act (OFPA), as well as Iowas Organic Agricultural Products Act of 1998, farms and handling operations that sell less than $5,000 worth of product per year of total agricultural products are exempted. These exemptions do not release you from the responsibility of being able to verify the claims you might make on your product labels or in your marketing materials. Even though your operation may be of a size that is exempt from certification requirements, this does not mean that you may not have certain reporting and record keeping responsibilities when presenting or labeling a product as organic. The Iowa Act states: 47.5(11) Parties exempted from organic certification. a. Exempted parties. (1) A person who receives $5000 or less in annual gross income from the sale of agricultural products shall be exempt from fees and mandatory organic certification. (2) Final retailers of agricultural products who do not process agricultural products are exempted from organic certification in the state of Iowa. Handlers who do not process agricultural products are exempt from certification. b. The exempted producer or handler selling agricultural products as organic shall demonstrate compliance with Iowa Code chapter 190C and this chapter by implementation and documentation of the following measures:
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(1) Submit to the department a signed Exempt Party Declaration form, as provided by the department, attesting to knowledge of and compliance with Iowa Code chapter 190C and this chapter. (2) Submit a $10 processing fee with the declaration to the department. (3) Maintain records adequate to verify compliance and trace an organic product from production site to sale for consumption. Records must be kept for five years. Even if your production levels exempt you from state or federal certification requirements, you may find certification is necessary to sell any quantity of organic production to parties that must in turn guarantee an organic certification to their customers. It is a common practice amongst processors to refuse acceptance of delivery of any product claimed to be organic until the seller provides proper documentation from the preferred certification agency.
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Sustainable Agriculture Network (SAN) Sustainable Agriculture Network (SAN), Hills Building, Room 10, University of Vermont, Burlington, VT 05405-0082 www.sare.org/san/htdocs/pubs As SAREs national outreach arm, SAN disseminates information through electronic and print publications. Call (802) 656-0471 or e-mail nesare@zoo.umv.edu for questions about bulk discounts or rush orders. Sustainable Agriculture Research and Education (SARE) program Sustainable Agriculture Research and Education (SARE) program, U.S. Department of Agriculture, 1400 Independence Ave. SW, Stop 2223, Washington, DC 20250-2223 Phone: (202) 720-5203 www.sare.org Administered by USDA-CSREES, SARE studies and spreads information about sustainable agriculture via a nationwide grants program.
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Marketing Plan
Marketing Targets
Food with a Face (Relationship Marketing)
According to the International Food Information Council, the desire by consumers to know and understand more about their food is fueling an explosion of available food information. The organization studied articles regarding diet and food safety news issued by 39 print, broadcast and online media over a three-month period in 1999. The results were staggering. Some 1,260 nutrition, health and food safety stories appeared during the three months reviewed in 1999, a 53 percent growth over the same study conducted in 1997, and a 31 percent growth over the 1995 study. Now more than ever, consumers want to know more about the how their food was produced and how it was processed prior to purchase. It apparently is comforting to consumers to feel a sense of relationship with the individuals who actually produce and handle their food. The image of a humble man and his donkey gathering hand picked coffee beans one-at-a-time (a recent advertising image for a major coffee company) garners mass consumer favor. If you can put a face with your food product and create a sustainable image that favorably connects your consumer to you or your group, you can develop a relationship that will foster brand loyalty and repeat business. This is a special area of demand that remains under-served in the food market.
Prestige Marketing
In certain markets, there are merit perceptions among consumers that can be tapped to realize added value in products. Many people find it desirable to buy something different or in some way special. It may be the idea of bragging rights or just being the one to introduce others to something new or different. There may also be an element of discovery that can be tapped. Certainly, the idea that the product is a cut above mainstream fare has an appeal. In part, this comes from a need in many consumers to underscore their ability to make great choices. Instead of agreeing to pay regular market price for a very good piece of beef, a consumer may instead choose to pay extra for meat products that are marketed as succulent, tender, gourmet, outstanding, hand-cut, perfectly aged, incredibly juicy, tasty, tastier, tastiest, tender, beefy, meaty, flavorful, firm, well-marbled, robust and/or delicious. Those are among words two established specialty meat marketers are currently using to sell mail order packages of four 10-ounce filets for $65.00 and four 16-ounce T-Bones for $83.00. Shipping and postage not included.
producer benefits from the endorsement of the personal chef. The whole concept of serving the server is built on the idea of how to utilize marketing people and organizations that already exist. Doing so provides a way for the producer owned enterprise to get more feet on the street without payroll expense. In fact, this facilitates selling product and potentially working an additional service fee into the transaction. This type of approach fosters expansion of product volume more quickly than the direct in-house marketing approach. It also keeps costs lower, which results in added flexibility.
Solution Marketing
The traditional view of solution marketing in food would certainly include the home meal replacement (HMR). With the surge in households having all adult members working outside the home there is more emphasis on time management, particularly by the female member of the household. Studies continue to show the female is the primary decision-maker on food purchasing. Those decisions are leaning toward convenience, including fast, heat-and-serve entrees and complete meals. This is an area of growth for beef even though it already owns the center of the plate. The challenge is to create beefbased meal options that are attractive, tasty and work well in less than 20 minutes. Two options for the beef marketer are obvious. First, one could become a specialty supplier to a company that has a brand and marketplace slotting already in place. This is the high volume, low margin and short run approach to moving beef. Keep in mind, if the target companies already have beef suppliers, the challenge is to somehow replace them through service, price or quality. The second option is to create product and brand, then enter the retail market directly. This approach brings much higher margin but will certainly be slower to build volume. There are substantial costs involved in creating brand identity, as well as high costs in packaging and labeling in the early stages because volume will be low. There will also be the need to compete for shelf space at retail, such as slotting fees paid to the store. To some extent, fees are negotiable. Personal chefs and standard catering are also forms of solution marketing. In those situations, the extra service a company provides is the large value item in the equation. In a similar vein, the old idea of the lunch wagon at a factory parking lot or office complex is still quite viable. In fact, the idea of offering ready-to-heat-and-eat meals to workers as they exit the parking lot for home could be very well received. Most workers do not think about the evening meal until late in the day. The idea of stopping at the grocery or getting home to face the evening chore is not always a favorable one, so the opportunity is there to provide the solution through their car window as they leave. Among high beef user demographic groups, this could be an ideal place to offer beef entrees.
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Ethnic Marketing
As you look for ways to sell the whole set of products coming from the market animal it is important to take a really hard look at other cultures and the ways of their countries for outlets. Eating habits and tastes are closely tied to family customs and local/regional norms. This is known as marketing to the learned responses of your consumer. In order to target these types of markets, it is important to gain a full understanding of the preferences and practices of the groups you hope to win over as new customers.
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Marketing Plan
About Brokers
For the most part, the brokers will probably find a start-up business long before it goes looking for them. Although there is every reason to be cautious when entering into any business transaction, dont ever hesitate to listen to a brokers offer it just might be the best one you are going to get that day. In the market place, brokers provide a necessary service. Essentially, they are the professional go-betweens that move product from the producer to the processor and on to the retailer. Brokers also tend to stand at the intersection through which all types of market knowledge passes daily. Consider a broker as a source of knowledge and opportunity. There will be days when you are going to need to move product and a broker is the only one bidding. Also understand that many of the markets that you might want to enter may only purchase through brokers. A broker could be the most economical ticket into the plane, train, cruise or casino business. Of course, brokers get paid for what they do. Pay is their reward for the risk they take when they stand between buyer and seller as the one with the least control but the greatest responsibility for everyones performance. As in any business or service, there are good brokers and some that arent so good. Remember the final decision is yours on whether or not you want to participate in a brokers program. The only difficulty you are likely to encounter with a broker is if you enter into an agreement that you do not fully understand or have not asked for clarification of all the details. As with any contract, you should have it reviewed by your legal counsel before signing if there is any part you do not understand or are concerned with. Know who is supposed to perform what, when they are supposed to perform it, and who is responsible for picking up the pieces if somebody drops the ball. Know it and be comfortable with it before you sign. The following pages show a listing of the products offered to the market place by one Eastern U.S. broker. A study of the companys ad copy and product listing will illustrate how doing business with a broker might benefit a start-up company by putting its products on a much larger menu. It just could be that someone who started out shopping through this brokers list for a special imported meat product might find out about one of your products and give it a try. There are also a few good ideas planted in the copy ideas that could surely take root in other locales.
(Note: The name of this brokerage company has been changed to avoid any type of endorsement. The information is presented purely as an example of how others are selling product and why a broker may be a good person to get to know.) Chester White Company, Inc. was founded on September 25, 1950. We are soon to celebrate our 50th birthday and our company continues to grow and prosper. Auntie Bea once had a vision to start a Food Brokerage Company specializing in Dairy, Deli, Meats and Provisions. As part of her vision came a commitment not to stray from the core business at which her company would become specialists. This has not changed.
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There are many food brokers in this market and in markets across the country who claim to specialize in these areas but if you take a close look, most of them have bakery lines, or grocery lines, or frozen food lines. Some of them even have product lines which are non-foods. Worse yet, there are even some food brokers who service their refrigerated principals with just a perishables division. At Chester White Company, perishables is what we are all about. We do not handle any products which do not fall in to the Dairy, Deli, Meat & Provisions format. This is not what we are all about. This is not where our interests lie. This is not an area we have expertise in. We are the fresh and processed meat and cheese folks. It is our goal as a company to become the standard by which our customers and packers alike judge every other sales and marketing effort they come in contact with. We will constantly strive to meet and exceed all expectations regarding customer service, follow-up and professionalism. Because we specialize, Chester White Company has the luxury of being able to choose the very best packers to represent. Each packer knows that they are being represented by a company who understands their business inside and out. We feel we are privileged to sell only the very finest products in a category. This works out well for all parties involved. The real winner is our valued customer base. A customer can call this office and talk to a live person from 6:00 a.m. through 6:00 p.m. Monday through Friday. Even though our office hours are from 8:30 to 5:00, there is always someone here a little early or a little late to personally handle a question comment or an order. Our staff is highly trained and boasts of years of experience in the meat business. Several members of our company have been food industry professionals for well over 40 years. Any one who answers the phone in our office is qualified to take and process an order or obtain information requested by packers and customers alike. Our commitment to quality products and services extends to everything we do. If, in the unlikely event a customer has a problem with one of our products, we guarantee that the problem will be taken care of, in person, within 24 hours of our office being contacted. In other words, by simply dialing our toll free number, the problem goes away. We guarantee it. By sticking to our core business, the business we know best, we have grown and prospered over the past 50 years in to a brokerage company most respected for quality products, quality people, professionalism, expertise and work ethic.
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Cooper Foods Formaggio Italian Cheese Specialities, Inc. Garden-Fresh Foods, Inc.
Miami Beef Company Prima Foods RLB Food Distributors B. Rosen & Son Spring Lake American Cheese Sugar Creek Packing Company Swift & Company Fresh Pork Salem Packing Company Trois Petits Cochons Watsons Quality Food Products, Inc.
We also enjoy a professional association with H.L. Stein, specialist in the dairy industry supplying natural cheeses for pizza and other pizza
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Marketing Plan
The three factors of profits are cost, selling and the unit sales volume, in the proper proportions.
profit percentage in the left-hand column. Multiply the cost of the article by the corresponding percentage in the right hand column. The result added to the cost gives the correct selling price.
Markup Table
Margin Percent of Selling Price 4.8 5.0 6.0 7.0 8.0 9.0 10.0 10.7 11.0 11.1 12.0 13.0 14.0 15.0 16.0 17.0 Markup Percent of Cost 5.0 5.3 6.4 7.5 8.7 9.9 11.1 12.0 12.4 12.5 13.6 14.9 16.3 17.6 19.0 20.5 Margin Percent of Selling Price 17.5 18.0 18.5 19.0 20.0 21.0 22.0 22.5 23.0 23.1 24.0 25.0 26.0 27.0 28.0 29.0 Markup Percent of Cost 21.2 22.0 22.7 23.5 25.0 26.6 28.2 29.0 29.9 30.0 31.6 33.3 35.1 37.0 38.9 40.8 Margin Percent of Selling Price 30.0 31.0 32.0 33.0 34.0 35.0 36.0 37.0 37.5 38.0 39.0 39.5 40.0 41.0 42.0 43.0 Markup Percent of Cost 42.9 44.9 47.1 49.3 51.5 53.8 56.3 58.7 60.0 61.3 63.9 65.3 66.7 69.5 72.4 75.4
Formulas
Which formula to use depends on what information you have to determine the price. If you are talking to the retailer, who says he or she wants to have a 30 percent margin on sales, use formula A. If you know what contribution margin you want but need to know if the margin will give you a sales price within the relevant range and an acceptable markup to the retailer, use the formula B. Formula B: Percentage Margin on Selling Price Percent Margin = 100% Markup on Cost/(100% + % Markup on Cost)
Note: markup on the selling price is equal to the contribution or gross profit margin per product
Use this formula when you know the total cost of your product with profit and you know the contribution or gross profit margin you want to attain. For example, in the above example, we bought an item for $1.20. We wanted to have a 25 percent contribution margin based on sales price left from the sale after paying expenses. What should the price be? There are two ways to work the problem. One, look up the markup percent in the table above. The second way is to use our formula B. Percent Markup on Cost = 25/(100-25) *100 = 33.3%. Price = 1.20+(1.20*.333) = $1.60. Does this give you the desired contribution margin of 25 percent? Marketing Plan - 355
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.30
Contribution Margin = .30/1.60 *100 = 25% So a markup on cost of goods of 33.3 percent provides us with a gross margin based on sales of 25 percent. Formula A: Percentage Markup on Cost Percent Markup = % Markup on Selling Price/(100%-%Markup on Selling Price)
Two basic methods to determine the price ceiling are trial and error in the market place or market research.
In this case, if the retailer says he/she wants a 33.3 percent markup on the sales price, how can you compute a sales price? Again assume you know the cost of goods, which is $1.20. Percent Markup on Cost = 33.3/(100-33.3) = 33.3/67.3 = 50%. The price is then $1.20 +(1.20*.50) = $1.80. Does that price put you in the relevant range?
Price Ceiling
Two basic methods to determine the price ceiling are trial and error in the market place or market research. The trial and error approach requires that the product be introduced to the market place to see what the customer will pay for it. A mistake you do not want to make is to put the product on the market at a low price, which squeezes your margins. You often will find it easier to lower your price at a later date than to raise it. Consider putting the product on the market with higher margins. Then if the market will accept the product at that price, you will make extra money. If not, you can lower the price to try to determine where the product will sell. This practice is simply more favorable in consumers eyes. Market research, however, may prove to be more costly and time consuming. Will it be less expensive and easier to actually make a small amount of product and do test pricing in the market place than to use market research techniques? Most small firms find it more reasonable to try the market introduction approach. Even then, you will find market research is necessary to see how competitive products are priced and what is happening as a result. That information should be discovered during your competitor analysis. What alternatives do you have if the market will not take your product at the price you have set? There are several basic options to explore. One is to lower the price. Will that price still cover costs and allow for an acceptable margin? If not, then you have the option to not make the product. Another option is to reduce your costs so the price does cover costs. This may require changes in packaging, delivery, portion size, etc. Another option is to accept the lower margin, even though you do not make a profit. You may choose to accept the lower cost if the price will cover cost of goods and still contribute to paying overhead costs. The assumption here, of course, is that you have other acceptable products and that this particular product is needed or required in your product line.
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Another option, if the market place will not accept your price, is to somehow differentiate your product from your competitors. You are trying to make customers recognize your product as one they will pay a higher price to have. Price sensitivity comes into play with differentiation or trying to raise price. That is, the less sensitive the buyers are to prices when purchasing your product, the more likely they are to buy at a higher price. For example, if a substitute product is readily available, a customer may choose the lower priced competitors product. But if there is no close substitute, then the customer may be willing to pay a higher price. Also, if the purchase is not a major budget item, there is less price sensitivity. Finally, if the buyer buys your product on an infrequent basis, then price may be less of an issue. Keep in mind that products are bought on the basis of perceived value in the minds of the buyers and not on the basis of what it costs you to produce the products. Your challenge, then, is to produce a product at a price equal to or below the buyers perceived value for your product.
Pricing Examples
These examples are approached from the aspect of four elements of pricing: direct costs, manufacturing overhead, non-manufacturing overhead and profit. With these costs, the assumption is made that the contribution margin can be determined. Often, however, the new venture has difficulty determining all costs to determine the contribution margin required. In that case, a way to approach the issue is to use the gross margin from one of two sources: Robert Morris Annual Statement Studies, a compilation of financial ratios for retail, wholesale and manufacturing industries, compiled from company financial statements; or the IRS Corporate Financial Ratios, by Schonfield and Associates. Most banks and libraries will have a copy of the Robert Morris book. Cost Based Approaches to Pricing Using Contribution Margin The price can be set using several approaches based on which cost input has higher or equal value, labor, raw material or contribution per pound. Example 1 You determine your desired contribution margin (gross profit margin) is 30 percent. The cost of material is $10 per pound and direct labor cost is $10 per hour. If you want a 30 percent contribution margin, the price would then be $10 +$10/60%. Direct labor and material is 60 percent of the selling price. So the price is $33.33. Proof is this way: $33.33- 20.00 = 13.33. Contribution margin of $13.33 divided by sales price of $33.33 equals the desired 40 percent. Example 2 If the value of the material is high or material is the limiting factor, a contribution margin can be established for material. If the labor is the limiting factor or if labor can not be fully utilized at all times, then a fixed contribution margin per labor hour may be desired. Here is an example based on pounds. Determine a mark-up on percentage based on price per pound. If the material cost is $5 per pound, and a contribution of $2 per pound is required. Then contribution as a percentage of pounds is 2.00/5.00 = 40%. The mark-up on factor to use for pounds is 40 percent. Marketing Plan - 357
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$5.00
$2.00
Market conditions will affect pricing decisions, but pricing based on costs will help you maximize your profits.
Resources
Wilsted, William D., University of Colorado, Pricing for Small Manufacturers; Small Business Administration, Management Aids 1.005; 1976. Lennon, Victor A., Chairman of Lennon/Rose and Company, Chicago, IL, What is the Best Selling Price?; Small Business Administration, Management Aids 1.002. SECTION 3
Marketing Plan
Distribution of Product
Linking all vertical segments is product distribution. At the present time, most distribution to existing ethnic and other specialty markets takes place as a direct sale from a producer (live animal), slaughter/processor (carcass or boxed) or through a network of jobbers. Many producers located near urban areas of the upper Midwest and far West report sales of live animals directly from the farm. Some producers supply and assist with slaughtering of individual animals for direct ethnic buyers. In some cases the animals are delivered for slaughter to local processing plants. This method of distribution is only suitable for the very small-scale market. Some examples of small-scale integrated slaughter/processing and sales of carcass meat products exist successfully in the U.S. and Canada. Many of these operations are integrated to production, but some rely on local producers for live animal sales. Most have acquired packing and processing services by the purchase and restoration of existing small-scale locker plants in the immediate area of production. These small-scale packer processors have a common set of strategies designed to offset higher cost slaughter/processing and distribution costs compared to the commodity channel. Some of those characteristics include: Flexible (multi-species) slaughter Flexible job description of most workers Targeted customer segments (ethnic groups, ultra fresh, etc.) Very high service Catering to individual local demand for product/service combinations Small order acceptability
Checklist 1
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Checklist 2
Checklist 3
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