With today’s global markets and open commodity trading, there has been a shift in the way producers can market and sell their crops. Savvy producers are savvy business people, with a good understanding of marketing. A good marketing strategy takes planning, preparation and an understanding of available marketing tools. There are five levers of marketing – the five “P’s”: Product, Price, Promotion, Place and People. Good marketers know how to pull these levers to achieve their desired outcome.
In marketing, your product – in this case, your crop – must be in demand. Achieving this requires product planning and some research. Take a look at current industry trends to determine if there is a gap in the market that you can leverage. Do you need to make changes to your production plans? Should you consider gluten free or maybe organic etc.
As a successful business person, you need to make a profit. Crop prices are often set by the current marketplace. However, understanding your total costs of production, including cash and non-cash (i.e. the actual out-of-pocket costs to produce your crop vs. additional costs such as depreciation and amortization that still affect your overall revenue), will help you determine clear profit margins for your product that will assist in long-term planning.
When people hear the term marketing, they usually think of advertising. It’s the sign on the road, an ad in a magazine or an online banner on a website. The focus here is on messaging – highlighting specific features and benefits of your product. For example, your current crop could be a specialty crop, certified organic and of a higher grade than what’s currently on the market. Knowing what differentiates your product will help you with messaging. Good messaging will attract the right buyer.
How and/or where a customer can find or access your product is the focus when considering sales and distribution. For example, when you purchase a loaf of bread at the local grocery store, the store is – in marketing terms – referred to as a distribution point. The same principle applies to marketing and selling your crop. What will be your distribution point? Transportation will play a key role: you’ll need to determine how you will deliver your crop to sellers and the length of time required to get it to them. Supply and demand will also have affect: do you have crop in the bin or is it still in the field? How long will it take before you have a viable crop to sell?
To be a truly successful marketer, you need to ensure your message is being heard by the right people at the right time. For selling your crop, you want to be talking to those who can help you maximize your profit potential. Options here include local buyers, crop brokers, commodity future contacts and other marketing analysts.
These five P’s come together to create your marketing strategy. Once you have a plan in place, you can make informed decisions based on solid financial footing, market trends and accurate, up-to-date information.