2014 Marketing Your Food Product Do you

2014 Marketing Your Food Product

Do you have a new, exciting product? p If you do, that’s great, but keep in mind businesses need more than a great product to be successful. p A high percentage of home-based food businesses fail their first year because they didn’t have a market to support their product.

Let’s learn about marketing basics

p Marketing is based on the importance of customers to a business and has two importan principles: n All company policies and activities should be directed toward satisfying their customer wants or needs. n Profitable sales volume is more important than maximum sales volume.

How do I use these principles? p Find your customer wants or needs through market research. p Analyze your competitive advantages to develop a market strategy. p Select specific markets to serve by target marketing. p Determine how to satisfy customer needs by identifying a mix of products (market mix) they want.

Marketing Strategy p A marketing strategy identifies target customers that a particular business can better serve than its competitors, and tailors product offerings, prices, distribution, promotional efforts and services toward those target customers. p The strategy should address unmet customer needs that offer adequate potential profitability. p A good strategy helps a business focus on the target markets it can serve best.

Target Marketing p Owners of small businesses often have limited resources to spend on marketing. p Concentrating their efforts on one or a few key market segments - target marketing - gets the most return from small investments. p These are two main methods used to segment a market: n n Geographical Customer

Geographical Segmentation is: p Specializing in serving the needs of customers in a particular geographical area. p For example, a neighborhood convenience store may send advertisements only to people living within one-half mile of the store.

Customer Segmentation is: Identifying those people most likely to buy the product or service and targeting those groups.

There are two main methods to segment a market. Do you know what they are? Click to see the answer. Geographical and customer

What type of segmentation is the following example? A local pizza place puts fliers in everyone’s mailbox within a one-mile radius of the pizza place. A. B. Geographical Customer Click to see the answer.

Managing the market mix p Every marketing program contains four key components: n n Products and services Promotion Distribution Pricing

Products and Services p Product strategies may include: n Concentrating on a narrow product line n Developing a highly specialized product or service n Providing a product-service package containing unusually high-quality service

Promotion p Promotion strategies include advertising and direct customer interaction. p Good salesmanship is essential for small businesses because of their limited ability to spend on advertising. p Good telephone book advertising is important. p Direct mail is an effective, low-cost medium available to small businesses. p Web presence may be an important and effective part of a successful strategy

Pricing p The right price is crucial for maximizing total revenue. p Generally, higher prices mean lower volume and vice versa. p Small businesses often can command higher prices because of their personalized service.

Distribution p The manufacturer and wholesaler must decide how to distribute their products. p Working through established distributors or manufacturers' agents is generally easiest for small manufacturers. p Small retailers should consider cost and traffic flow in site selection, especially since advertising and rent can be reciprocal: n A low-cost, low-traffic location means spending more on advertising to build traffic.

Distribution Cont. p Products/services, promotion, pricing and distribution combine into an overall marketing program. n The nature of the product or service is also important in citing decisions. p Purchases based on impulse should be in a high -traffic and visible area. p Location is less of a concern for products or services that customers are willing to go out of their way to find.

Distribution Cont. p The availability of fast shipping and highly segmented mailing lists, developed or purchased from list brokers, magazines or other companies, has enabled certain small businesses to operate from any location, yet serve national or international markets.

Which of the following is not one of the key components to a marketing plan? A. B. C. D. Pricing Promotion Distribution Planning Click to see the answer.

Marketing Performance p Entrepreneurs must evaluate their marketing program. p Every program should have performance standards to compare with actual results. n Researching industry norms and past performances will help develop appropriate standards.

p Entrepreneurs should audit their company's performance at least quarterly. The key questions are: n Is the company doing all it can to be customer-oriented? n Do employees ensure the customers are satisfied and leave wanting to come back? n Can the customer easily find what he or she wants at a competitive price?

Let’s move on to our marketing plan. A sound marketing plan is key to the success of any business. p Marketing plans include: n n n Market research Location Customer group you have targeted Competition Positioning Product and service you are: p p Selling Pricing Advertising Promoting

Positioning your product is defined as: A. B. C. D. Pricing your product higher than its competition Pricing your product lower than its competition Creating a unique, consistent and recognized customer perception about a firm's offering and image None of the above Click here to help find the answer. Click to see the answer.

Marketing, planning and promoting p Begin with current information about the marketplace. p Visit the local library. p Talk to customers. p Look at other businesses’ advertising strategies. p Consult with relevant industry associations.

Write down your plan p Define your business n What’s your product or service? n Where are you selling your product or service (neighborhood, regional or national)? n Who’s your competition? n How are you different from the competition? n What’s your price? n How do your competitor’s market their product? n What are your promotion methods? n How are you going to distribute your product or where will your business be located?

Define your customer p Who is your customer? n n p Age Sex Income Neighborhood How will your customers learn about your product or service? n Advertising Direct mail Word of mouth Yellow Pages n Web site n n n

Newsweek p Patterns or habits your customers and potential customers share n n p Qualities your customers value most about your product or service n n n p Where they shop What they read, watch and listen to Selection Convenience Service Reliability Availability Affordability Qualities your customers dislike about your product or service

Define your plan and budget p Know previous marketing methods used to reach your customers. p Know methods that have been effective. p Know cost compared to sales. p Know cost per customer. p Research possible future marketing methods to attract new customers. p Figure out what percent of profits you can use for your marketing campaign.

Examples of marketing tools Newspaper n Magazine n Yellow Pages n Radio or television advertising n Internet n Direct mail n Telemarketing n Public relations activities n

The final stage in your marketing plan should be your overall promotional objectives: p To communicate your message p To create an awareness of your product or service p To motivate customers to buy and increase sales