Planning Sessions

Developing a marketing plan isn’t as difficult as you might think.

By Daniel W. Block

If you are seriously planning to be in business well into the 1990s, then developing a marketing plan is already part of your management activity. If you are a farmer, or an agribusiness dealing with farmers, it’s vital to know your customers’ needs and have a written program to satisfy those needs.

>Unfortunately for American agriculture, we’ve been traditionally poor planners. We have tended to live from season to season, and planning has often been viewed as a luxury for big companies that have executives with nothing else to do with their time. Nothing could be further from the truth. Developing a marketing plan can be a simple project that can yield tremendous, long-term benefits. Having a usable marketing plan allows one to react to changes more effectively when they occur, but most importantly, the purpose of planning for an agricultural marketer is to maximize limited resources.

We make excuses for not planning. We say that things change too rapidly or that we’re just too busy. Occasionally we become victims of the old syndrome where we’re so busy chopping wood, we don’t have time to sharpen the ax. Actually, all these reactions indicate a need for planning. If you have unlimited money, unlimited time, and (certainly the most important resource), unlimited customers, then you don’t need to do much planning. But all of us in American agriculture know that our capital and time are limited, and we’re just becoming aware that we have to share our customers with an increasing number of worldwide competitors.

As our marketplace becomes affected by what I refer to as the "unholy trinity" – increased rate of change, increased number of international competitors, and limited resources – a change is taking place in how people see their products. Where producers used to sell to all who could buy, today’s market-oriented farmers incorporate a precise definition of their target market into their plan and focus their time and resources on that target exclusively.

The concept is simply this: You cannot be all things to all people. There is no question that you make more money, more efficiently, when you tailor your product to specific market segments. Finding your niche in the market means finding customers who have needs that you can satisfy better than anyone else can.

How do you identify a niche? The basic tool for finding market niches is to do the simplest kind of market research: Ask questions and be observant. Divide all the customers in your market into various categories – say, by geographic areas, or by cold climates and warm. Or define your customers by their lifestyle (energetic or sedentary), by age, by taste preferences, or even by season (spring vs. fall calving).

All of these ways of defining customers provide a way of finding opportunities in the marketplace that are not always apparent. Agricultural producers who have been successful in targeting specific niches include those vegetable growers who produce Oriental vegetables for the expanding Oriental populations in southern California, as well as those growers who have decided to provide restaurants with the products they require. There are alfalfa hay growers who grow exclusively for the purebred horse market, and there is a cherry producer in Stockton who packs cherries for the very particular tastes of his customers in Hong Kong. All of these people "position" themselves, in the minds of their customers, as specialists uniquely suited to meet their needs.

A simple structure for developing a marketing plan is what I refer to as the SOS (BAM) model (see table 1). When used properly, this structure will give you a tool that is as handy as a pair of pliers or a screwdriver.

The first "S" in SOS (BAM) stands for situation analysis, the most important part of your marketing planning. In this section of the plan, you look at your operation, the marketplace and customers, the competition, and the market potential. In other words, you analyze where you are right now – your situation. It is here that you ask your customers what their needs are, talk to your buyers, talk to your neighbors, observe operations that are successful, consider articles you’ve read that discuss trends in your business, and, most importantly, analyze your market for potential niches.

While you’re at it, don’t forget to ask your employees what they think your operation’s strengths and weaknesses are, and get their input into where they think the opportunities in the market are. You might be surprised at what they say.

Don’t feel that you need to accomplish this analysis in one sitting. It may take a few periods of writing separated by intervals of thinking and information gathering. But be advised that an almost magical process begins to take place when you do a situation analysis. New ideas start to emerge. You’ll start to discover a creativity in yourself and your employees you may never have known was there. Capture ideas as they start to come and write them down; you’ll use them later.

The "O" part of the plan is the objectives section. This section is very simple. You put down on paper some specific, measurable objectives you’d like to achieve with your operation. It may be simply to increase the number of customers, for instance. Maybe you want people to be more aware of your brand name, if you are going to create one. You might simply have a greater profit objective for your operation.

An important thing to bear in mind about setting marketing objectives is that they must be measurable. Don’t say, "I want to sell more watermelons;" rather say, "I want to sell 10 percent more watermelons by Aug. 31." Another point to remember about objectives – make them attainable. Set objectives that make you stretch, but not objectives that are impossible to achieve and would only frustrate you and those who work with you.

The second "S" in this model stands for strategies. It is in this part of your plan that you put down the ideas you have for increasing your business through marketing. This strategy section includes areas of product development like packaging, branding, warranty, and service – that is, tailoring your product for the unique needs of your target market. It includes distribution decisions, such as whether to continue with your present buyers or maybe go direct to the consumer. It includes pricing decisions – maybe even raising your price. And, lastly, it includes the more traditional areas of marketing that we normally think of as promotion – that is, personal selling, advertising, public relations, and publicity.

The "BAM" in the model stands for budget, action plan, and measurement. Obviously, there has to be an economic justification for implementing your ideas, and that’s where the budget comes in. An action plan simply states when to start the various activities; it’s a calendar of events. And measurement is a means of evaluating your progress.

Developing a marketing plan is not an overwhelming task to undertake, and it’s a catalyst for innovation.

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