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How to get the customer to lick his lips at the sound of your name

The most important strategy for a successful agricultural marketing program today is to produce the highest-quality product possible. All the agri-marketer’s other options – advertising, public relations, new distributors or brokers, salespeople – are only useful after first ensuring that (1) the product being marketed truly satisfies the needs of the marketer’s customers, and (2) that the product is the quality the agri-marketer claims it to be. The old saying "You can’t make a silk purse out of a sow’s ear" still applies today.

Although there are a variety of marketing tactics available, remember that a clever ad, a shiny package, a sophisticated brand name, or a persistent salesperson will never compensate for a flawed product or one that doesn’t live up to its claims. The oldest and least expensive form of promotion is word of mouth, and that form of customer goodwill cannot be bought with flashy advertising: It is earned by delivering the highest value to your customers for their money.

This fact is true for both domestic and foreign markets. U.S. consumers, for example, were found to prefer branded over unbranded fresh produce, perceiving it to be of higher quality. And the Japanese, a logical marketing target for many California producers, are notoriously picky about their food and fiber purchases. In this climate, the logical strategy for today’s ag marketer is to shift from quantity to quality.

Having said that, remember that working 12 hours a day in the field may not in itself produce the highest-quality product. Beyond the physical features of your products that you work so hard at perfecting are the less visible features that are perceived by your customers, yet often neglected by producers.

A product embodies more than simply its physical and functional characteristics. Customers view products (either consciously or subconsciously) through such attributes as service, packaging, guarantees, and even image and brand name. They are not simply purchasing the characteristics that result from combining soil and water, or genetics and feed. Customers are really purchasing a bundle of benefits and attributes that are sometimes purely symbolic.

Life insurance companies have known this fact for years. They market the perception of safety and security through the use of such symbols as the Rock of Gibraltar, a fireman’s hat, or an umbrella. In fact, the decision to spend a great deal of hard-earned money on life insurance policies is often based solely on a perception of the insurance company’s reliability.

A farmer with 80 acres of apple trees in Tehachapi uses the same approach when he markets not just his apples, but when his apple blossoms by taking senior citizens for a ride through his orchard at blossom time. The seniors love it, as it’s a refreshing change for them from the congestion of the city. In effect, he’s selling an experience, an image – a perception. The seniors arrive by the busload from the Los Angeles area, and he sells them local fruit, a simple meal, and fun. He tours about 300 groups a year, and he makes a profit. That’s an example of understanding what your product really is.

The whole goal of sound product development is to take the resources you have and enhance, alter, reshape, or package them to reach the needs of the target market and to differentiate your product from all the others in the marketplace. Marketers call this adding value: The more value you add to a product, the greater the profit margin that results. While it may be difficult to change the crop or livestock produced today, certainly other aspects of your product can be altered, thereby adding value.

Take the areas of service and warranty, for example. Developing these two areas can go a long way toward setting a product apart and targeting a unique marketing niche. An example of this is a certain Red Angus breeder in Montana, who for years has used a unique product strategy to market his purebred bulls. He offers extra value with his cattle by including a newsletter called "The Bottom Line," a videotape, and a "No-Nonsense Catalog" – all free. Most noteworthy is a guarantee he includes for bulls bought sight unseen (a unique service in itself). If a customer purchases a bull and isn’t satisfied, this breeder will gladly take it back. He also guarantees his bulls to be exportable.

What are his customers purchasing besides a bull? They are purchasing the security of knowing that they have minimized the financial risk incurred in buying expensive breeding stock. In many ways, this rancher is like the insurance companies previously mentioned: He’s selling peace of mind. As his brochure states, "There is no gamble with these proven sires."

Other ways to add value to a product include such things as a customer service hotline: some marketers now have a toll-free number available for their customers. Providing information and education with the product is always of high value to customers. Seminars or workshops related to the use of the product – cooking it, processing it, delivering it, cutting it, vaccinating it, unloading it, or boxing it – all add value to the product.

A simple way to differentiate a business or product is to create brand identity by using a brand name. Many producers, large and small, identify their products with a unique brand name and logo. This identification can appear on a box, in advertising, on packaging, or on the product itself, just as the logos for Dole, Sunkist, and Calavo do.

A word of caution about picking a brand name, though: Choosing one on the basis of personal taste or because it bears the family name is a waste of a good marketing opportunity. Butterball turkeys, for instance, may not say much about the farmer who grows the bird, but the name gets the customer to lick his lips, and that’s what’s important. When selecting a brand name, it’s important to choose one that means something to the customer and creates in his mind an image of the benefits that he is seeking. The idea is to choose one that is simple to say and that can be protected legally.

Even so-called commodity products – a railroad car of grain – can be differentiated if the marketer sees himself as part of the product. A positive attitude, an ability to solve problems, and attention to product standards can give the marketer an advantage over those who just "fill the bins."

If two carloads of grain are of the same quality, have the same price, and can be delivered at the same time under the same terms, then the person selling grain who has the closest working relationship with the buyer will get the business. That building of close relationships is one of the oldest and most effective means of adding value to your product, and is really what marketing is all about.

Then there’s the question of price. No doubt most of us obediently learned in a basic agriculture class that farmers are price takers, not price makers. And although that has been true for the most part, it has tended to create an attitude among agricultural producers that there is nothing that can be done about their fate.

An agricultural producer wanting to receive a higher price for his product has only two alternatives: (1) get the government to guarantee a higher price through price supports or subsidies, or (2) add value to or enhance the product to differentiate it from his competitors’ products. The former gives an individual manager very little control; the latter gives him a lot.

The point here is that product strategy is the key element in your pricing strategy. In a mature industry, which is what agriculture is, a producer needs to be delivering more value than his competitors in order to ask a higher price, even if that higher value is merely a perception that your customers have.

Coming full circle, the basic building block of a sound marketing program is providing customers with a quality product, one with all the tangible and intangible features that they want. This article has only touched upon these issues. But if a producer simply began to think along the lines discussed here, he’d already be ahead of most of his competitors. As the famous football coach Vince Lombardi used to say, "It’s not the fancy plays but the basics that win ball games."

This is the third in a series dealing with practical agricultural marketing.