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Choosing & Evaluating Marketing Channels. Matt LeRoux, Marketing Specialist. Matt LeRoux. Marketing Specialist with CCE, Tompkins County. Recent Master’s in Ag/Food Marketing from Cornell. Worked for 5 years for the New England Livestock Alliance & Heritage Breeds Conservancy.

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choosing evaluating marketing channels

Choosing & Evaluating Marketing Channels

Matt LeRoux, Marketing Specialist

matt leroux
Matt LeRoux
  • Marketing Specialist with CCE, Tompkins County.
  • Recent Master’s in Ag/Food Marketing from Cornell.
  • Worked for 5 years for the New England Livestock Alliance & Heritage Breeds Conservancy.
  • Started 2 brands of Natural & Grass-fed beef.
slide3

Wholesale

Direct

Selling to a buyer who is not the end user.

Selling directly to the end user.

Packer

Farmers’ Market

Restaurant

Freezer Trade

Grocery/Retail

CSA/Buying Club

Distributor

Farm Stand/Store

Auction

Web

Institution/Food Service

U-pick

location local population
Location & Local Population

Factors to consider when choosing marketing channels:

What is your production like?

In Scale & Diversity

In Specialization

How many of them are there?

What do they want?

slide5

Opportunity is knocking…

CSA

Farmers’ Market

U-Pick

Restaurant

Grocery

Cooperative

Distributor

Farm Stand

slide6

But, it costs $300 per day to sell there.

Joe, if you bring your beef to the farmers’ market the prices are so high you can sell $500 worth per hour!

That’s great. I am going to sell there.

…and its only 1 hour per week...

…and it takes 12 hours to prepare...

…and if it rains no customers come.

slide7

Price & Profit

You can sell $500 worth per hour!

It costs $300/day to sell there.

Associated Costs

…and its only 1 hour per week...

Sales Volume

…and it takes 12 hours to prepare...

Labor Requirements

…and if it rains no customers come.

Risk

How do you evaluate a market opportunity?

Six interacting factors impact the “performance” of a marketing channel including:

Lifestyle Preferences

the moving target
The Moving Target
  • Which channel is best?
  • One channel does well in one way, poorly in another so how do you know?
muddy fingers farm
Muddy Fingers Farm
  • Diverse vegetable & fruit production.
  • Farmers’ markets, CSA, & restaurants.
  • No paid labor, 6 working shares, family & friends that volunteer.
  • 2.5 acres in
  • production.
  • Over 45 crops.
methodology

Why labor logs?

  • Labor is the largest marketing expense.
  • Consistent unit and format.
  • Operators tell hired help to complete the forms.
  • Each employee filled out their own sheets.
Methodology
  • Collect logs of all marketing labor (from harvest to sale) for one typical, peak season week.
  • Collect gross sales & mileage for the week.
  • Collect ranking on lifestyle & risk.
  • Collect weights for each ranked category.
labor logs

Harvest

Process & Pack

Travel & Delivery

Sales time

Labor logs
methodology1
Methodology
  • Use data to rank and compare channels:
    • Profit (gross sales – (labor + mileage cost)
    • Labor hours required
    • Sales volume
  • Also use farmer ranking for :
    • Risk perception (financial risk, lost sales, etc…)
    • Lifestyle preference (enjoyment, stress aversion)
simple comparison of labor sales
Simple Comparison of Labor & Sales

CSA: 18% of weekly labor, 45% of weekly gross sales.

Watkins Glen FM: 13% of weekly labor, 5% of weekly gross sales.

profit
Profit

Profit as % of Gross Sales (with Owner Labor Valued)

risks preferences
Risks & Preferences:

Labor requirements

Price risk

Customer turn-out

Competition

Buyer back-out

Processor is booked

People on the farm

Customer interaction

Time in the field

Wash & pack

Displays

based on 5 factors and farmer chosen weights
Based on 5 factors and farmer chosen weights.

Rank & Compare Opportunities for Performance Factors

practical application marketing decisions
Practical Application: Marketing Decisions
  • Considering a marketing change, what should it be?
  • Reduce participation in weakest performing channel.
  • Increase participation in best performing channel.
  • Strategic channel combination to maximize sales and reduce risks.
practical application marketing decisions1
Practical Application: Marketing Decisions
  • Muddy Fingers Farm has been considering a marketing change, what should it be?
  • Could drop the Watkins Glen Farmers’ Market and add 12 shares.
  • Weekly gross sales remain equal.
  • 8-9 hours/week less labor.
slide21

Channel Combination with prioritized selling maximizes sales of unpredictable perishable crop yields.

marketing channel assessment
Marketing Channel Assessment
  • Identify your goals and lifestyle preferences.
  • Keep marketing cost & returns records, if only for “snapshot” periods.
  • Value your own time to present an accurate picture of marketing costs.
  • Rank & compare opportunities to maximize profits.
  • Combine channels to max sales & reduce risks.
contact information
Contact information:

Matthew LeRoux

Agricultural Marketing Specialist

Cornell Cooperative Extension Tompkins Co.

615 Willow Ave., Ithaca, NY 14850

607-272-2292

[email protected]

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