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.

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2 thoughts on “Market Research and Analysis

  1. Yes, that Real-time tracking of customer location, desire and reach is an incredible set of Social metrics to have in real time. I like the technological evolution of your 4 P’s to our current digital age.

    It is a physical and a virtual Place now, For direct delivery of food to the consumer, this virtual arena of Place is ever so important to fulfillment and maximizing margin then ever before

    The resources are at our fingertips, most are free, and the ad targeting ROI in Facebook is monumental.

    Matt

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