When pricing for agricultural purposes we should use the same theory as for the consumer market so that we undercut our competitors but have a better quality product to keep our customers loyal once we have them.
The next element of the mix we will look at is the Product element:
First impressions count for a lot. The presentation and appearance of all physical aspects of the business require care and thought as they serve collectively to provide an impression of the professionalism of the business.
These include:
- The outward appearance of the business
- Vehicles
- Staff Uniforms
As a business we need to pay careful attention to the Physical aspects of the business (Does the product project the image of the business that we want it to, and is this how the customer perceives it? – will it meet the requirements of the company’s vision?)
Each product has a definite life cycle, this is said to consist of the following stages
- Introduction
- Growth
- Maturity
- Decline
We need to decide what image we want to project to our customers through the use of product branding and the choice of product name.
In a consumer market there is a lot of focus on customer taste for special packaging, which includes easy to use dispensers and containers. When deciding on product packaging you should remember that costs are important. Whilst keeping your costs as low as possible you should be aware that products would not sell if the consumer considers the packaging too cheap. There is also a safety consideration for consumer goods when buying chemicals such as Ground Clear e.g. childproof lids.
A Label could carry information about our product as well as our company as a source of valuable information to the consumer.
The label may carry information such as:
- Short notes on how to use the product properly
- The brand name of the product
- The maker of the product and contact details
- Ingredient contained in the product
- Relevant legal requirements
In an Agricultural market the packaging is an essential part of safety and security of the product. The packaging would have to be strong as due to the strength of Ground Clear it may spoil. The packaging is also used to meet all the relevant legal requirements such as listing the ingredients
Labelling of goods in an agricultural market may not be as important as in a consumer market as there is often close contact between the buyer and company representative, product details are a matter of contractual agreement. Agricultural Buyers routinely carry out quality checks on their purchases to check that the mix is correct.
The next element of the mix we will look at is the place element:
Distribution puts the right product in the right place, at the right time. If middlemen did not provide some kind of service (i.e. wholesalers – storage), then they would have no place in a competitive economy. They add the utility of time and place to a product.
The technical & professional duties of retailers & wholesalers are that they are responsible for the flow of information about goods and services and transfer of ownership from producer to buyer.
Retail channels
Retail stores are important for most consumer goods, the retailer may offer the following advantages to the customer:
- Retailers anticipate consumers wants
- Retailers ‘break bulk’ it is economic for producers to produce and sell in large quantities. Consumers buy in small quantities. Retailers break down large bulk purchases into lots suitable for consumer purchase.
Retailers also provide advantages for producers:
- Retailers share some marketing tasks, such as advertising with producers
- Retailers act as conduits of information between buyers & producers.
The types of retail outlet that we could sell Ground Clear to the consumers and also to agriculture would be:
- Multiple Retailers
- Producer owned retail outlets
- Mail Order
- Franchising
- Internet
Wholesalers
Wholesalers anticipate consumer needs, and have knowledge of both buyer and sources of supply. They have a sales force, which enables producers to reach many small scattered, retail institutions. Wholesales also perform the activity of breaking bulk.
Industrial Wholesalers
Wholesalers are in theory industrial stockists they buy from the producer and sell to other organisational buyers who require these goods. In these cases both producer and buyer are unwilling to maintain large stocks. Industrial wholesalers exist where manufacturers prefer long production runs and buyers purchase in comparatively small quantities.
The key benefit of intermediaries in a consumer and agricultural market is that they can often provide a specialist service and experience that you may well not possess yourself. They will help to facilitate the process of selling Ground Clear. The problem is that they want a slice of the profits and the more intermediaries there are, the less profit we will make.
The next element of the mix we will look at is the promotion element:
We can use specific ingredients of the promotional mix to target the agricultural market and consumer markets.
The Promotional Mix
Within the agricultural market personal selling is likely to be the best approach. Where as in the consumer market advertising and sales promotion could possibly be the most important tools.
Each target market will need its own balance of the promotional mix.
The aim of sales promotion is to provide the customer with an incentive to buy Ground Clear. Whereas the aim of advertising to build up long term product awareness, sales promotions are a short-term method of raising awareness and increasing sales.
If we are selling our product through a distributor, then we should be aware that we would need to promote Ground Clear both to the distributor and the end user.
“Promoting into the pipeline”
This is the term given to the techniques used to promote our product to the distributor.
“Promoting out of the pipeline”
This is the term given to the techniques used to promote our product to the end customer.
When we are promoting Ground Clear here are a few incentives we could use to gain customers.
- Bonus Packs
- Sample Trail Packs
- Price Reductions
- Coupons
Advertising
The key objectives of advertising are:
- Provide Information about a product
- Create & Build a product image
- Encourage a desire to own / use our product.
Public Relations
This section of the business encompasses all of Innovations Plc communications with the outside world.
We want Ground Clear to be a success and therefore, we have to ensure we promote a positive image to our customers weather in be the consumer or agricultural market, this should be done through our everyday communications with people outside the business, this includes any interface between staff and customers written or spoken.
PR activities can include:
- Obtaining free advertising for the company
- Business hospitality for its customers
- Press releases & conferences
- Sponsorship of events
- Charitable donations
- Any publicity material
Personal Selling
Personal selling is one of the key promotional activities in the agricultural market. This is where a real relationship can be built up.
On a face-to-face basis, the sales person can really develop a good understanding of our customer’s needs, which is often crucial when dealing with a chemical substance such as ground clear.
Where personal selling is one of the best ways in the agricultural market but is often associated with a “hard sell” in the consumer market.
We could also use a mix of these direct marketing approaches for both stages of the market.
- Direct Mail
- Door to Door Sales
- Telephone Sales
- Internet Marketing
- Shopping Channel
The key to an effective promotional strategy is to use those promotional tools, which will be most influential part in stimulating the customer to not just buy Ground Clear once but to repeat purchase.
Because of the problems of diluting Ground Clear in the agricultural/farming market we are looking at the possibilities of using a company representative to oversee the application of the farmers first batch of product.
We could use this service as a marketing tool by creating awareness of our product and a guarantee of service from the personal selling aspect that services normally have. Customers would be shown how to get the best Results and the company operative would answer any questions.
Differences in marketing a product to a service could be:
The basic principles of marketing - satisfying people’s needs and wants apply as much in the service market as they do in the product market. Essentially there are still products to be sold even if they are physically different. Both have to be branded, packaged and distributed however there may be a difference in how the marketing mix is organised.
In addition to the four elements in the marketing mix for tangible products there are three more ingredients in the mix for services. When marketing a service we should remember these:
The service marketing mix (The 7p’s)
The additional 3’ps
People: People are extremely important when marketing a service, as services are very hard to standardise.
Physical Evidence: A customer cannot Touch, Smell, See or Hear a service therefore the marketer must find ways to reassure the customer that they offer a quality service. Physical evidence might be provided in the form of literature.
Process: Services cannot be stored so forecasting & satisfying levels of demand is essential.
Differences in the marketing of products and services maybe:
- The points-of-sale maybe limited to branches or certain premises
- The packaging may not take the form of containers as with products, but could be sales literature which is packaged by its format and typography
- Distribution may also be other than through the wholesales/retailers it may be through the form of other selling methods such as direct marketing/mail-shots
- Unlike the product, which is taken from the shop shelf, many services are marketed more personally, especially as Ground Clear will need a lot of explanation.
In the marketing of services the supplier and customer operate more personally. Looking at the various ways in which services are distributed, there is generally greater precision in the marketing of services.
Services have special characteristics these include:
- Intangibility
- Variability
- Inseparability
- Lack of ownership
When marketing any product/service you should always remember to:
- Understand the customer
- Create value for your customer
- Communicate your value to your target customer
- Make it easy for the customer to buy the product/service
- Create a long term relationships
Marketing Ground Clear Abroad
Differences in marketing Ground Clear abroad compared within the UK maybe:
Marketing in the local region or even nationally & marketing in the European Market are very different, whereas in a national market we may have conducted very little research, relying on personal instinct & experience the Euro Market requires systematic research i.e. Needs of Customers or Activities of Competition.
Whereas in the national market we may-have been able to get away without a marketing plan, strategic planning is the key is success.
If Ground Clear is going to be a success we would have to:
- Good Research
- Strategic Planning
- Strict implementation of the marketing strategy once devised and tested.
- Constant monitoring & evaluation of the marketing process and its results.
- Regular correction of the marketing strategy in the light of the evaluation.
When thinking of Marketing Abroad we need to ask ourselves the following questions:
- Do we Market Abroad or not?
- Which Markets shall we enter?
- Mode of Entry
- Marketing Programmes
- Marketing Organisation
- Marketing Mix
We should decide whether to be an:
Ethnocentric company – Stay as we are and sell abroad as we would sell in the UK.
Polycentric Company – Adapt our product/service to the local market we are entering
Geocentric Company – Take the best benefits of both of the above and develop them to the best advantages of the market.
When Marketing Abroad we should always remember the risks:
- Political Risks – Government Changes etc.
- Business Risks – The firm fails to understand the overseas market
- Financial Risks – Will we get paid
- Currency Risks – Volatility of exchange rates
When entering a foreign market there are 5 alternatives routes we could take:
- Exporting - Minimum cost, risk and effort and we could do it though an agent
- Licensing – Small capital outlay “Franchising” (another company produces our product under licence –we receive royalties.
- Joint Venture – Collaboration with foreign companies this can help distribute our product through their distribution channels.
- Trading Companies – They will buy our product in one Country to sell it in another
- Direct Ownership – This involves major investment and involves opening a factory to manufacture goods abroad.
Bibliography
Principles of marketing
Second Edition –1999 Phillip Kottler, Gary Armstrong,
John Saunders, Veronica Wong.
Marketing Environment
CIM (Certificate in Marketing) Workbook 2000-2001
Business Open Learning Archive
http/sol.brunel.ac.uk - 2001
Business & Marketing Planning Toolkit
Advantage West Midlands, CEU Ltd & Einstein Consulting Ltd - 2001
A First Course in Marketing 2nd Edition
F. Jenkins - 1993
BTEC HNC-HND Business, Core Module One : Market Relations
BPP Publishing Limited - 1996
Euro Marketing
