Plan Before You Plant

Daniel Block,
D.W. Block Associates,
B.C. Fruit Growers
Horticultural Conference

If you are seriously planning to be in business well into the 1990’s and beyond, then developing a marketing plan is already part of your management activity. If you are a farmer, knowing your customer’s needs and having a written program to consistently satisfy those needs, is vital.

Unfortunately for U.S. and Canadian agriculture, we’ve been traditionally poor planners. We have tended to live from season to season, and planning has been often viewed as a luxury for big companies who have executives with nothing else to do with their time. Nothing could be farther 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.

Frequently we make excuses why we can’t plan. We often cry out that things change too rapidly to make a plan useful or, "I’m too busy to plan!" 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, these reactions indicate a dire need for planning! If you have unlimited money and unlimited time, and certainly the most important resource, unlimited customers, then you don’t need to spend the energy to do much planning. But all of us in North America 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, meaning that we have effectively fewer customers to sell to. Those in agriculture, take heed; in today’s marketplace, if you are responsible for an agricultural operation of any size, and you are not presently doing a marketing plan for your organization, then you are playing with a time bomb that could surely go off within the next several years!

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, an interesting phenomena is taking place in how people sell and market their products. Whereas producers used to make a product and sell to any and all who could buy it, today "market-oriented" farmers incorporate in their plans a precise definition of who their target market is, and focus their time and resources on that target exclusively.

Planning to focus your marketing energies on a specific target often means the difference between wasting valuable resources while hoping for someone to buy your product, as opposed to calmly and efficiently managing your resources, to "get the most bank for your buck." Marketers call this "targeting a market segment" or, more commonly, "picking a niche."

The concept is simply this. One cannot be all things to all people. There is no question that you make more money, more efficiently, when you tailor your product and services to specific segments in the marketplace for whom you can do a good job. Finding your niche in the market means finding customers who have needs that you can satisfy better than anyone else. It means differentiating your product to a specific segment of customers, and building a relationship with those customers where they perceive you to be specially qualified to satisfy their unique demands. If there has been one significant development that has characterized the "cutting edge’ of marketing today, "niche" marketing is it.

How does one identify a niche he can target? The basic tool for finding unique niches in the marketplace that are presently not being filled, is by doing the simplest, but most effective kind of marketing research. Ask questions and be observant. Divide up all the customers in your market into various categories or segments. For instance, customers can be defined by geographic areas, such as B.C., Alberta or cold climates and warm climates. Additionally, customers can be defined by their lifestyle – energetic and outdoors oriented, or sedentary and spend most of their time indoors. They can be defined by age, such as retired people, young families, teenagers or children. They can be defined by taste preferences; they like things sweet or tart, large or small, processed or raw. They can be defined by seasonality or time, such as spring calving or fall calving, pre-planting or post-emergence. The object of this process is to precisely identify the unique needs of the customers in your market, and select those whose special needs you can most uniquely meet, and who are large enough in numbers for you to be profitable. This gives you the edge over your competitors, and conserves your resources.

All of these various ways of defining our customers provide us a way of finding potential opportunities in the marketplace that are not always apparent. Agricultural producers who have been successful in targeting specific niches include vegetable growers, who grow Asian vegetables for the expanding oriental populations in Vancouver. Other examples are producers who have decided to target restaurants and provide them with products of specific sizes and quantities that the restaurants require. There are alfalfa hay growers who grow exclusively for the purebred horse market, and a cherry producer in California packs cherries specifically for the very particular tastes of his customers in Hong Kong. All of these people "position" themselves, in the minds of their customers, as specialist, uniquely suited to meet their needs.

A simple structure for developing a marketing plan is what I refer to as the SOS (BAM) model. This is a structure that can be followed, and when utilized properly, will give you an operational tool that is handy as a pair of pliers and a screwdriver. The first "S" in this planning model stands for Situation Analysis.

The Situation Analysis is the most important part of your marketing planning and requires careful thought. In this section of the plan, you look at your operation, the marketplace and customers, competition, and market potential. In other words, you analyze where you are right now – your situation. It is here where you ask your customers what their needs are, talk to your buyers, talk to your neighbors, observe operations that are successful, bring into account articles and journals you’ve read that tell about trends in your area of business, and most importantly, analyze your market for potential niches.

The Situation Analysis required marketing research. Ask your employees what they think your operation’s strength and weaknesses are, 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 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 employees you may never have known was there.

A major farming corporation in the San Joaquin Valley of California, when they began marketing planning sessions with their employees, found the well of creativity that appeared as they embarked on a situation analysis, was overflowing. Capture the ideas as they start to come; write them down; you’ll use them later in the planning model in the section called Strategies.

The next part of the plan is the Objective 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 band 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 apples," state, "I want to sell 10% more apples by December 31st." Good objectives are measurable and have a completion date. 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 for 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 the marketing areas of product development, which would involve packaging, branding, warranty and service. The product part of your strategies deals with designing and tailoring your product for the unique needs of your selected target market. It includes place or distribution decisions, which would involve whether or not you continue with your present buyers or maybe go direct to the consumer. Thirdly, it includes pricing decisions. Pricing decisions can involve raising your price, or asking for a premium price when others around you feel that they have to "take the price" they are given. And lastly, the strategy section contains the more traditional areas of marketing that we normally think of, Promotion. This involves activities such as personal selling, advertising, public relations and publicity; communicating to your customers that you can satisfy their needs.

The BAM in the model stands for Budget, Action Plan, and Measurement. Obviously, there has to be an economic justification for implementing the ideas that you are going to plan, that’s where the budget comes in. An Action Plan simply states when we are going to start these various activities; it’s a calendar of events. And the Measurement is a means of evaluating your progress and monitoring if you are on your way to achieving these objectives.

A marketing plan is a road map and you cannot steer an organization of any size in the competitive market today without such a map. It is not an overwhelming task to do and it yields some interesting results. Agricultural producers and companies who have never planned before found that when they started planning, it not only provided them with a working road map for their operation, but it also stimulated ideas they never would have thought of had they not done the planning process. Developing a marketing plan is a catalyst to new and innovative ideas. And if you make the effort to begin the process, you’ll find yourself thinking in directions that you never before considered.

A MARKETING PLANNING MODEL FOR AGRICULTURE
SOS (BAM)

Situation Analysis – "Where are you now?"

• Market potential
• Customer needs
• Differential advantages of your product
• Competition’s strengths and weaknesses
• Your operation’s strengths and weaknesses
• Determine market segments or niches
• Industry trends
• Pick a target market

Objectives – "Where are you going?"

• Must be measurable
• Must have a completion time or date
• Must be specific
• Must be attainable

Strategies – "How will you get there?"

• What products does your customer want and what form will it be in
• How will you distribute/sell it to your customer
• What price should you charge
• How will you promote it (advertising, personal selling, public relations/publicity or special incentives

Budget

• What will these strategies cost
• What will be the financial return

Action Plan

• When should you do the recommended strategies

Measurement

• Are you making progress toward your objectives
• Did you achieve your objectives