Market Research and Analysis

Know your customerGuest Blogger – Kim Morgan, Extension Economist, MS State University

Nearly 85 cents of every consumer dollar is used to cover food and food product marketing costs that occur beyond the farm gate. Agri-entrepreneurs can capture some of those dollars by looking to sell direct to consumers. To do so, they need to invest time and resources to build a marketing plan for their food products. A marketing plan is more than just building a Facebook page or advertising in a local newspaper. A basic marketing plan will include details on each of these marketing mix components:

• Product – product form, packaging, production, harvesting, storage, delivery, and preparation
• Price – based on variable and fixed costs and market supply and demand analysis
• Promotion – includes social media, paid advertising, free publicity
• Place – physical and virtual location of market

A key component of a marketing plan is assessing its impact on attracting and retaining your unique clientele, which requires data collection and analysis specific to each marketing mix piece. Businesses typically track sales volume (Q) and purchase price (P) for each item at each location, which are used to calculate total revenue (TR) for that product line, where TR = QxP. Understanding the total revenue resulting from promotional efforts is equally important, and using a few simple techniques can provide your business with necessary data to assess marketing effectiveness.

Ask your customer how they found your business, and make a note of the promotional piece that attracted their interest along with your copy of the sales receipt should they purchase any items that particular day. For high-volume days, place a large poster board with pushpins that allow passers-by to stick a pin in their hometown/zip code next to a bowl of free candy and placed near the entrance/exit points.

Large poster boards can also be used with colored stickers, where a customer can place a sticker under a column headed by the promotional pieces used by your business, to indicate how they arrived at your doorstep. Alternatively, these columns could describe the number of times they have been to your store, or, the types of products they purchased that date.

Another way to gather customer information is motivate them to leave a business card in a bucket that advertises a chance to win a prize in a weekly drawing.

Given the high incidence of smart phone usage, asking your customers to “like” your business on Facebook or “check in” on Foursquare during their visit in return for a free treat on a subsequent visit provides you with data on customer traffic that day, connects your business directly with their network of friends, family, and businesses/organizations, and entices them to return to collect their treat on another visit.

These key data points allow you to assess the performance of each component of your marketing plan by relating the time and resources expended to the resulting sales volume on a daily basis. Armed with this marketing mix information, your overall business plan can be adapted to dynamically serve the unique market niche that your product line offers to your clients yesterday, today and tomorrow.

Imagine the Customer

Guest Blogger – Marilyn Schlake, Extension Educator, University of Nebraska-Lincoln

Niche businesses operate within a sliver of the market. They are built around the unique needs of a narrowly defined customer base.  This niche is too small for the big companies to pursue, thus leaving room for the small business to operate and grow.  As with a large business, the questions are still the same — is the niche market large enough to make a profit, are the customers accessible, and is the market growing fast enough?  How do you know? Like the big companies, you need to do your research and get out there and talk to your customers.  

Close your eyes for a minute and visualize of your customer. What does she look like? What does she wear? What does she do for employment? What does she think? What problems does she encounter daily?  Who are her friends? If you don’t know your customers inside and out, you may be missing out on opportunities to expand your market and create long-lasting relationships. Furthermore, if your staff doesn’t know the customers, their wants, needs and expectations, how are they able to help grow your business?

Along with the questions asked in my earlier post (http://bit.ly/ZS9KgY),  you also need to focus on better understanding your customers’ environment, influences, and aspirations.  

  • Who does your customer interact with on a daily basis?
  • What are their influencers saying, wanting them to do?
  • What media influences their decisions?
  • What is important to them? What are their values?
  • What do they worry and think about?
  • What other types of products do they use?

If asking customers these personal questions is uncomfortable, then take the first step and make a guess. Test your understanding by reading, observing and having casual conversations with your customer.  Ideally you will have a picture, drawing or collage that depicts your customers and outlines their key commonalities.  Share this with your staff and modify it as your customers become more defined. 

Sources:  Alexander Osterwalder & Yves Pigneur (2009), Business Model Generation.

Photo credit: Adactio, Flickr, Creative Commons license

Visual, Visual, Visual

Making your booth stand out

Came across an article that is crucial in any marketing effort today. It discusses the importance of visual elements in any marketing effort today. This might be pictures or video or images or graphics. The key is using visual to attract attention. But it can also sell, provide additional information, d be a call to action. Visual at a farmers market is key. A previous post looked at the importance of prices and how making them visual can help customers. Visual also will bring people to your booth. Take the time to think about how you can add visual at your display booth or in your store or online.

Read the article that reminded me of the importance. http://smallbizsurvival.com/2013/04/more-photos-for-your-tourism-promotions.html

Know your Value Proposition? Ask your customers!

Simple customer survey

Guest BloggerMarilyn Schlake, Extension Educator, University of Nebraska-Lincoln

Imagine you are your own customer. What would propel you to buy from your company? Is it to solve a problem or to fulfill a desire or want? What do you think drives your customers to purchase from you? Do you truly understand who your customers are and what makes them look to your company to solve their problems?

We may think we know our customers, but rarely do we ask our customers what they truly think or need. Customer surveys can be an efficient way to get quick feedback from customers as to their current satisfaction with the company product or service. However, they don’t tell us what customers are wanting in the future or what changes are occurring in their lives that could move them away from the business. In the case of a start-up, we want to know what changes are happening that that could move them toward our company!

Probing questions can be intimidating and may lead to uncomfortable responses. They can also improve relationships with customers, open doors to increased sales and lead to niche markets. The key is to start the conversation. Here is a sample of a few questions to ask:

  • What job(s) are you trying to accomplish?
  • How does this product/service help?
  • What caused the problem or created the need for the product/service?
  • How do you measure success or failure of this product/service?
  • How could we make the product/service better for you?
  • What can we do to meet your expectations, what can we do to exceed your expectations?
  • What current solutions on the market delight you? (features, performance, quality, etc.)
  • In the future, what will be your needs toward this product/service? How does it need to change?

Start by targeting a cross-section of your customers. Approach your customers by asking for 15 minutes of their time while in the store, after the service, or make an appointment for the interview at another time. Immediately following the interview, record the answers. Look for patterns! What are your customers telling you? Where do you need to change or improve? What are they wanting you to do to solve their needs, now and into the future?

Sources: Alexander Osterwalder & Yves Pigneur (2009), Business Model Generation.

Photo Credit – Flatbush Gardener, flickr – Creative Commons license

Looking for consumer-level expenditure data on food?

data mining
Guest Blogger – Louis Raison, The Ohio State University

If your state* uses MarketMaker, here’s a searchable database that allows you to see consumer food purchasing data at the county level. Here’s an example from Ohio.

http://webapps.marketmaker.uiuc.edu/marketmaker/#OH/food/marketresearch/
(Or by going to http://www.ohiomarketmaker.com and clicking on MarketResearch.)

To populate regional food preferences data on the map:
1.) From the main page in the green Market Research box, click the “down arrow” by the word “where.” Choose “Food Preferences.” Then you’ll see numerous variables on the dropdown sub menu. Choose “Average Food at Home Expenditures,” for example.
3.) The next dropdown gives you the choice to select the entire state, or narrow down to one or more by “County.”
4.) Click “Mapt It!” to see your results
5.) Overlay the shaded data with a Business Search (farmers markets, groceries, restaurants, etc.) if desired.

The food preference data is compiled from ESRI who gets their data from Bureau of Labor Statistics. Here is a link to the information.
http://www.esri.com/~/media/Files/Pdfs/library/whitepapers/pdfs/consumer-expenditure-methodology-2011.pdf

Picture by Quatarmion’s Mind Dump used under Creative Commons license