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Reports

New Crops Newsletter

Issue No 12, July 1999.

NOTICE: Hard copies of the Australian New Crops Newsletter are available from the publisher, Dr Rob Fletcher. Details of availability are included in the Advice on Publications Available.

11. Getting Together - Common Marketing Strategies

Peter Twyford-Jones
Senior Marketing Officer
Sheep and Wool Institute
Queensland Department of Primary Industries
GPO Box 3129
Brisbane Queensland 4001
Telephone: 07 3239 3251
Facsimile: 07 3239 0688
Email: TwyforP@dpi.qld.gov.au

Successful marketing strategies comprise:

1. Considering the formation of a group

The advantages of getting together include:

  • A greater volume of product can be marketed,

  • A greater range of product can be marketed, including a variety of grades or sizes,

  • There will be greater negotiating strength when dealing with buyers, agents, wholesalers or retailers,

  • There will be less risk of a supply shortfall due to adverse weather conditions or pests,

  • Costs can be shared at the various stages in the supply chain, such as sharing harvesting equipment, packing and grading equipment or processing equipment such as dryers or crushers and sharing the distribution, shipping or market research costs, and

  • Greater opportunities for promotion, making it more cost effective, permitting larger budgets for promotional material or enabling the development of a brand name.

The disadvantages include:

  • A loss of flexibility, since the partners are locked into the group strategy and individuals may miss individual opportunities as they arise,
  • A loss of independence, since group activities depend on various people and rural producers have traditionally liked to operate independently,
  • There will be a delegation of decision making, requiring the sharing of responsibility among the members, which implies confidence in one another's ability and trust amongst the members and
  • Sharing of commercial advantage such as knowledge of markets or special production techniques.

Each member of the group must assess whether the disadvantages are outweighed by the advantages.

2. Assembling the necessary components of a successful group

2.1 Champion

  • To lead, make decisions, provide energy and enthusiasm and act as the spokesperson,
  • To observe members' capabilities, identify conflicts as they develop and ensure harmony,
  • To co-ordinate information, provide a focal point for information exchange, ensure there is consistency in the information and undertake negotiations and
  • To be able to spend the time to carry out these tasks.

2.2 Commitment

  • Members need to be prepared to be a part of the group and prepared to accept any disadvantages,
  • Prepared to provide financial input
  • Prepared to share a common vision and
  • Prepared to make a long term commitment.

2.3 Cooperation

  • Prepared to relinquish control for at least some aspects of their business,
  • Prepared to delegate responsibility for setting prices, establishing markets, negotiating, quality control and grading, etc.,
  • Prepared to share production and market information and
  • Prepared to share contacts, such as trade information and knowledge.

2.4 Competitive advantage

  • With increased volume of production, the group has negotiating power,
  • There is an increased range of products available,
  • Risk management can be improved through more markets and more buyers and
  • A continuity of supply through an extended season or reduce variability in production.

A group needs to provide an advantage to the members which is greater than what they perceive to be the disadvantages of membership.

Groups are dynamic and changes in membership should be expected. The business structure should follow the strategy and be developed as the members establish what the group's function is.

Technical skills can be bought in, so long as the group is able to work together.

3. Developing the group strategy

3.1 Do Our Own Marketing Research (DOOR Marketing)

There are a large number of new industries and there are limited resources for marketing research. DOOR Marketing uses Participative Action Management to develop a program to assist producers in doing their own initial marketing research for new industries

There are four key questions identified by producers:

  • Can I sell it?

  • How can I get it to the market?

  • Who will get in my way?

  • How can I improve my information?

The development of a Marketing Strategy entails:

  • Identification of products and target market segments

  • Establishment of prices

  • Agreement on promotional strategies

  • Definition of distributional strategies

3.2 Marketing Skills Program

Comprises a group facilitation meeting, two workshops and a market visit

The first workshop consists of:

  • Business Planning

  • Marketing

  • Product and Price

  • Market Research

  • Group Dynamics

  • The Theory of Export Marketing and

  • Business Strategy

The second workshop consists of:

  • Distribution and promotion

  • Preparations for a market visit

  • Service providers

  • Negotiating skills

  • Quality assurance and quality management

  • Preparation of a brochure for the target market

Conclusions

  • Group marketing has some definite advantages but members must be aware of the potential disadvantages.

  • The group needs to be aware of the points raise above about Champion, Commitment, Cooperation and Competitive Advantage

  • The group must develop a marketing strategy

  • People will determine the success of the group.

Any claims made by authors in the Australian New Crops Newsletter are presented by the Editors in good faith. Readers would be wise to critically examine the circumstances associated with any claims to determine the applicability of such claims to their specific set of circumstances. This material can be reproduced, with the provision that the source and the author (or editors, if applicable) are acknowledged and the use is for information or educational purposes. Contact with the original author is probably wise since the material may require updating or amendment if used in other publications. Material sourced from the Australian New Crops Newsletter cannot be used out of context or for commercial purposes not related to its original purpose in the newsletter

Contact: Dr Rob Fletcher, School of Land and Food, The University of Queensland Gatton College, 4345; Telephone: 07 5460 1311 or 07 5460 1301; Facsimile: 07 5460 1112; International facsimile: 61 7 5460 1112;

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