“MARKETING – MONEY MAKER OR WASTE OF TIME?”

Getting a good price for what is sold off farm  has always been important. Now it’s the difference between survival and sinking. 

Gone are the subsidies which cushioned the ups and downs of farming. Cutting costs will help- but not guarantee - survival in a world where others can produce more cheaply. 

So attention must turn to increasing revenue from the farm enterprise, and to thinking as hard about what to sell, where and to whom, as about how to produce. In other words farmers must become good at marketing. 

Good marketing starts with the customer. It is about identifying the customers you would like to sell your product to, knowing what is important to those customers, and offering them a package of goods and services that they like a lot. Indeed, the idea is to ensure they like the package so much that they are prepared to buy from you rather than a competitor, or to pay a premium for your product, or both. Good marketing allows the seller to get a premium and add value to their product because they understand what is important to the customer. Equally, good marketing means that the package of goods and services on offer makes a profit for the seller. 

It is critical to be clear about who is the customer. For example, many producers might think that the supermarket is the customer, but that is rarely the case because supermarkets do not on the whole buy from the individual farmer. Rather, supermarkets buy from the processor or packer who in turn buys from the farmer. A good acid test is for farmers to ask themselves who writes the cheque for their products, because that will be the customer who matters. 

Is marketing relevant to all farmers? 

Sometimes there is a debate about whether marketing is relevant to all farmers. Some might say that farmers are primary producers without the ability to add value to their basic product unless they move into downstream activity such as processing or direct selling. Such thinking would be wrong.  

A look through recent copies of Farmers Guardian provides many examples of  farmers getting a premium price for their produce without having to move downstream. Examples range from supplying fully traceable milk; providing South Devon cross dairy beef to a west country processor who is prepared to give forward contracts and guaranteed returns to the farmer; achieving a premium price for top specification lambs sold to a West Sussex marketing group, and obtaining a higher price for producing free range coloured eggs. 

Getting started 

But where to start? How do you decide which idea is a long term runner and not a short term fad? 

In the quest to increase revenue from the farm there are many customers to choose to service, from the general public to a retailer, processor, restaurant pub or school, the auction or another farmer. Equally, there are a myriad of products that can be sold from traditional crops and livestock to the wilder shores of diversification such as novel crops or bio fuels. But there are clear steps which can be taken to make sense of the choices, weed out the bad ideas, and develop the good ones. 

Over the next months this column will provide practical advice to address the following issues

• choosing a market

• choosing a customer

• identifying what a customer really wants and is prepared to pay for

• understanding who else is supplying the customer (the competition)

• matching what the customer wants with what the farm can produce

• building a brand

• working out the financial implications

The bottom line 

Marketing means finding a package of products and services that customers are prepared to pay a premium for. Good marketing is therefore essential to increasing revenue and ensuring long term farm survival. Marketing is not a black art, rather it is a discipline which can be learnt and applied by all who are interested. Good marketing will differentiate the individual farmer from the crowd, distinguish the quality of their product, and raise them from being sellers of a commodity to sellers of something which earns more than the basic commodity price. 

 Marketing is worth getting to grips with.