Sales Pitch

What’s behind that magic word "marketing"? An expert spells it out in plain English.

By Daniel W. Block

Don’t let the high-priced consultants and university professors fool you! Practical marketing – the kind of activity that will make your agricultural business grow, or simply survive – is a hands-on tool that is easy to understand and master. It is not a mysterious exercise reserved for elite intellectuals and stuffed shirts.

I know whereof I speak, since I am a marketing consultant and a university professor. As such, one of my greatest joys is to see the excitement on a student’s face and the relief in the eyes of a farmer when they learn that marketing is something that is easily applied to their daily activities and, in many cases, something they are already doing quite well.

Marketing has many definitions. To American agriculture, marketing can mean everything from a shipload of rice being loaded in Sacramento and bound for the Far East, to an individually packaged avocado with a label on it, or an artichoke stand in the Salinas Valley. The kind of marketing that is going to move California agriculture ahead and position it as a formidable player, not just in the domestic market, but in the world market, is the marketing we refer to as branded-product marketing. Simply stated, this means the kind of marketing where one differentiates his product from those of his competitors or from alternative choices that a customer might have.

USDA is loaded with people who are called marketing experts. The problem is that many are dealing primarily with commodity marketing – the furthest thing from branded-product marketing since it deals with bulk amounts of products that need little or no enhancement to meet customer needs. Yet this is still the kind of marketing that our universities and government agencies spend millions researching. Only recently have government agencies woken up to the dire need to promote branded-product marketing in agriculture.

It all boils down to this: State-of-the-art marketing today means being sensitive to customers’ needs and providing what customers want, not what we have and hope they will buy. The traditional viewpoint of most of us in agriculture has been, "I am a wheat farmer. How can I get people to buy more of my wheat?" Focusing on product is fatal in today’s ag marketplace. We need to focus on our customers and let them dictate the form our products take.

There are many examples of successful branded-product marketing in California agriculture. One of the most well known is the marketing that Sunkist Growers has done with its citrus products. Sunkist realized years ago that it doesn’t sell oranges; rather, it sells such things as service to wholesalers and retailers. The co-op sells an image of quality that tells consumers the branded product they are purchasing is different from (and presumably better than) the competition. By putting the Sunkist label on an orange and positioning the product in the consumer’s mind as unique, Sunkist has been able to garner higher margins than its competition, both in the United States and abroad.

Another example of branded-product marketing is Harris Ranch beef. Understanding that the customer doesn’t want just a piece of red meat, but rather wants the satisfaction that comes from high quality, Harris Ranch started labeling its beef to set it apart from its competitor’s products. The objective was to offer a unique product that would be preferred over that offered by other beef producers.

You see, we in agriculture have been production oriented, that is to say, our focus on a day-to-day basis has been on turning out products. Being technically oriented to soil, fertilizers, machinery, etc., we’ve always identified ourselves in terms of what we produce. As an industry, we need to shift our thinking to a marketing orientation. In other words, we need to identify ourselves in terms of the customer needs we satisfy. This can have profound effects on our operations. If we start to be driven by what the customers want, we may see our operations changing in profound ways. We might find ourselves getting into new products, new forms of packaging, or maybe just spending more time developing relationships with the people who consume what we grow.

As the world marketplace becomes more crowded with efficient agricultural producers, this attitude becomes more important. Thirty years ago, we didn’t have to compete with producers from South America, Australia, North Africa, Mexico, and parts of Asia. Today we do. Because of this, we need to wake up to what our customers really want, or we will lose them – possibly forever. Our survival depends on our ability to seize marketing opportunities, not on waiting for food shortages. A high-ranking USDA official in Washington, when asked if he saw a world food shortage in the future, replied, "Food shortage isn’t even in our vocabulary."

What is American agriculture, and specifically California agriculture, to do in this environment? We can’t rely on twisting the arms of other countries to make them take shiploads of commodities available from other foreign competitors. Nor can we ask American consumers to eat more food than they are presently eating. The answer lies in understanding that consumers in the United States and other developed countries want more than just the physical substance of food. They want service; they want image; they want unique and convenient packaging. In other words, they want value added to the products you produce.

You’ve agreed that we need to be aware of the consumer’s demands and attempt to modify our product offerings to meet those demands. But now what? Where does one start?

You begin with information. Marketing professionals call it market research. Simply stated, you need to know everything you can about your customer and your competition. You need to know who your customers are, where they live, what they buy, how they buy, when they buy, and who influences their purchases. Additionally, a marketing-oriented producer wants to know what needs this customer has that are not presently being satisfied.

One simple place to begin is to look around you at who is successful and doing things right. Many agricultural businessmen have discovered winning marketing techniques by observing those around them who are successful. Observing that other growers who identified their products as "premium" were getting higher prices than he was, a potato farmer in the Bakersfield area designed his own unique box to differentiate his product in the southern California market. Buyers began to perceive his potatoes as being of better quality, and he typically received a better price than his competitors.

This very simple form of product differentiation worked so well that when he ran out of his own boxes one time and had to use a neighbor’s boxes, he received a reduced price in the Los Angeles market, even though the potatoes in the boxes were the same as he had always delivered to this customer. This brings up an extremely important point about our customers. Remember: In marketing, perception is everything! We in California agriculture are marketing perceptions, not just food.

Where else can you get hands-on marketing information to make decisions? The state agencies provide some information. The California Department of Food and Agriculture, along with UC Extension, has a few things that help in marketing, but not much. Most of their material is oriented toward production and commodity marketing. Nevertheless, you need to avail yourself of what free materials they do have. Additionally, there are seminars put on frequently through both private firms and public agencies that will show you how to put together a marketing program for your operation. Attending trade association meetings and conventions is also helpful as you learn what is going on in the marketplace. There are food shows, and even events sponsored by the California State World Trade Commission in foreign countries, designed to get you close to your customer.

Most importantly, today’s agricultural producer needs to be routinely reading selected publications and newspapers. If, for example, you are a farmer in a small Imperial Valley town, reading your local newspaper is pleasant, but it will not help you understand your marketplace. Agricultural producers in California need to be reading national and international publications in order to be more aware of what’s going on in their marketplace and with their customers.

Another form of practical market research that any individual can do inexpensively is simply to ask buyers and customers what they want. This can be done in the form of a personal interview, a telephone call, or a simple questionnaire that you can design and send out to those people with whom you deal. If you own a roadside stand, ask those people who purchase from you or stop at your stand why they stopped, what they are looking for, and what else you can do to satisfy them. If you are thinking of targeting the food service industry, such as restaurants, go to some selected restaurants and ask them what they would like to have supplied, and in what form would they want it.

Many California producers are doing this right now and getting an advantage over those who are still spending all thier time in the field instead of some of it with their customers. For the sake of your own survival, take some time to get off the tractor and go talk to your customers. That alone will make you aware of opportunities that you never before considered.

Freedom, creativity, and innovation have characterized the American farmer and agribusinessman for decades. It is those qualities that have built the remarkably efficient agricultural industry of the United States, and it is those same qualities that are essential to being a dynamic marketer and a formidable competitor in the global ag marketplace. It all starts with marketing – and marketing starts with asking those customers, "What do you need?"