Up Close and Personal

Or, how today’s ag marketer can never get too close to his customers.

By Daniel W. Block

If there was ever a time to be an agricultural marketer, the opportunities afforded to farmers and agribusinessmen alike make today the most exciting time ever. In this, the last of four articles dealing with some of the basics of agricultural marketing, we’ll consider the two strategic marketing areas that offer agricultural marketers the most creativity and control. Those are the areas of distribution and marketing communications, or, as the professionals call them, place and promotion.

For decades, farmers had limited access to consumers because farmers were in the country and consumers were in the city. Producers relied on the railroads and vast networks of middlemen, such as brokers, wholesalers, grocery store owners, and small vendors, to move their products.

Feedback from the final user, usually the urban housewife, was slow and filtered through various people. Additionally, the housewife’s expectations were rather simple: Perishable food had to be top quality and seasonably available.

She didn’t expect it to be cooked, processed, garnished, and ready for the microwave. Since most people early in this century had a close family connection to the farm, the housewife – however urban – was usually sympathetic to farmers’ production problems.

During this period, too, there was really no reason to get closer to the consumer. Farmers were making money, the folks in the city were getting their food, and people had respect for farmers. Most producers were too busy working on the farm to take the time to worry about a system that was working satisfactorily.

But, as we all know, that situation has changed. Farmers are struggling to make a profit, and although food continues to flow smoothly to those who don’t live on the farm (about 98 percent of the U.S. population), there’s little understanding of how food is produced – a situation that puts more than a little strain on the relationship between the farmer and the consumer.

One thing hasn’t changed: The farmer is still busy working long days. But simply being busy is no longer a valid excuse for not getting involved in the marketing process and getting closer to the final customer. Out of financial necessity, the battle cry of the innovative producer today is, Get close to your final customer!

Many of my marketing students at Cal Poly eagerly await the time when they can go home and get rid of the middleman. I am reminded specifically of the son of a commercial flower grower who was reeling from the effect of South American imports. The young man was looking at the margins his family could receive by bypassing their brokers and going direct to the jobbers and floral retailers in the Midwest and on the East Coast. Many producers have expressed similar feelings over the years, hence the rise of marketing cooperatives like Sunkist. But the communication and transportation tools available today are allowing farmers to try and do it all on their own, avoiding the bureaucracy of larger organizations.

But while bypassing traditional distribution channels has its appeal, remember that the sword you use to cut out the middleman is two-edged. An ill-planned strategy to go direct could overlook some vital functions that your middleman now performs and that you may not be able to afford to duplicate. Developing the necessary contacts and maintaining relationships in markets a long way from your operation takes time and involves significant expense.

Still, having said that, I recommend that all producers think about getting close to their final customers. Vegetable producers in the Salinas Valley have done this for the last several years. Although some of the larger farms don’t sell directly to the consumer, they have absorbed many of the marketing functions previously done by wholesalers and brokers, and by doing this have established strong brand identities and loyalties.

If you are a small operation, getting closer to your final consumer can mean roadside stands, farmers markets, or developing relationships with local markets and restaurants. The California Department of Food and Agriculture offers help to smaller producers through its staff of direct-marketing specialists. These people put on seminars throughout the state and provide information for those interested in pursuing a direct relationship with the consumer.

Finally, there’s promotion, or marketing communications, as I like to call it. It’s that activity in which the agricultural marketer tells his customers that he has the product that will satisfy their needs. The activities available in this area include advertising, personal selling, public relations, and publicity, along with special promotional incentives.

Dancing raisins, avocados wearing party hats, musical videos showing the latest "models" of Angus bulls, and colorful direct-mail catalogs attest to the fact that agricultural producers in the United States are aware of the potential of sophisticated advertising strategy. Advertising agencies throughout the country are busy putting together clever campaigns to promote turkeys, almonds, milk, various specialty fruits, selected breeds of cattle, and dozens of other ag products. This trend will continue as more and more producers strive to differentiate their products and garner higher margins.

When making decisions on whether and how to advertise, ask yourself a simple question: What specific media does my target market read, watch, or listen to? Many folks have thrown away a good deal of money on advertising thinking that simply placing an ad in a magazine or on the radio will increase their business. Most reliable publications can provide potential advertisers with a profile of their subscribers or listeners. It’s free for the asking and is important in helping you decide if that magazine or radio station really reaches the decision makers who will buy your products.

Beyond that, which medium should you choose? Keep in mind that you want to reach the largest number of people in your target market for your dollar – a goal many accomplish by relying on direct mail. Many purebred cattle producers send out catalogs and mailers to ranchers to promote sales and, more importantly, maintain customer loyalty.

Advertising has its place, but don’t be mesmerized into neglecting the oldest, and by far the most effective, form of marketing communications: the personal sales call. People make buying decisions, and nothing beats the power of a person-to-person relationship between buyer and seller – not advertising, not special coupons, not computerized telemarketing.

Whatever your operation, there’s always a place for strengthening your personal relationship with your customers. One rancher sends birthday cards to an extensive mailing list of buyers he has developed over the years. Another grower makes a point of calling his customers regularly. Customers can sense when you are sincerely interested in satisfying their needs. The world has become so computerized that a personal, "How can I help you?" can give your product the attention you want.

In all of these articles on marketing I haven’t mentioned anything new or revolutionary. Yet in all of my traveling throughout the world and the United States, observing those who are successful in agricultural marketing, I have noticed a common thread. These successful people stick to the basic principles of marketing. That is, they are more concerned with what their customers want, rather than what they grow or sell. They are listeners and question-askers. They think in the long term and are willing to forego short-term profits for long-term growth. They are usually very curious about the world and are hungry to learn. Finally, I have found that all of these folks like people and enjoy serving them. And serving people is really what marketing is all about.

This is the final article in a series on practical agricultural marketing.