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Ginger S. Myers Extension Marketing Specialist and Director , Maryland Rural Enterprise Development Center University of Maryland Extension 310-432-2767 [email protected] Defining Marketing Options 1.What will it realistically take to achieve your goals from a resources perspective? 2. How long will it take? Starting Places • Wholesale or contract • Hybrid- contract, group sales, some differentiation • Direct markets-primary Develop a Marketing Mix Overview • What is direct marketing? • Driving forces underlying growth in DM. • Benefits to producers and consumers. • Prospects for your future. What exactly is direct marketing? Direct marketing involves selling agricultural products directly to the consumer (e.g. PYO, roadside stands, farmers markets, ecommerce, etc.) Driving Forces Behind Direct Marketing • Dissatisfaction with low farm gate prices. • Retail buyer consolidation. • Urban sprawl. • Consumer interest in food safety & origin. • Increased emphasis on convenience and value added (less volume purchasing). Farmer’s Share of the Food Dollar Benefits of Direct Marketing to Farmers CAN PROVIDE Alternative income streams. • Helps to preserve small farms. • Outlet for organic/specialty niches. • Capture greater share of consumer dollar. • Able to be their own boss/do their own thing – less dependent on wholesale. Direct Markets • Pick-Your-Own • Can work for seasonal produce like berries. – Have a phone with an answering machine that gives prices and operating hours. – Provide an educational setting for small children. – Display clear signs with rules and prices Direct Markets Agri-Tourism Inviting the public onto the farm. Agritourism can take many forms including retail sales, hay rides, corn mazes, pick-your-own operations, and use of woodlands on farms for hunting, hiking, horseback riding, and other activities. There may be educational components including programs for schoolchildren and elderhostel tours, as well as exhibits and demonstrations tailored to specific visitor groups. Farms may combine retail sales and tours with accommodations such as bed and breakfasts and farm-stays. Direct Markets • Farm Stands and Roadside Markets • Location is everything. – Successful when it features one or two high-demand items (watermelon,sweet corn). Direct Markets Farmers’ Markets There were 76 Farmers’ Markets in Maryland in 2008. Markets are in every county and the City of Baltimore. Instant feedback on your products. Opportunity for on-the-job training. Direct Markets Community Supported Agriculture CSA- Involves a single farmer, sometimes a group, selling “shares” or “subscription” at the beginning of the season and then delivering (or providing for pick-up) baskets of whatever is produced. Direct Markets Specialty Markets • Ethnic produce. – Have a commitment from potential buyers before growing the product. – Must be able to consistently supply product. Sales to Restaurants – Talk to chefs and specialty buyers before growing the crop. – Pre-processed produce may be required. Do I Need a Website? • Not having a website is like not having a telephone. • Use to tell your story. • Map, hours of operation, directions. • Sign-up, newsletters • Internet sales? Getting Started • Think outside the box- Just because you don’t grow something now doesn’t mean you can’t grow it in the future. • Go to local farmers’ markets and see what’s there( and what’s not there). • Talk to contacts and see if local chefs are buying local products. • Consider tourism outlets. • Talk to other producers to hear what has worked and what hasn’t. • Contact Extension, NRCS, etc regarding the prohibitive potential of your property. SWOT Analysis • Strengths and Weaknesses- usually internal factors that you can control. • Opportunities and Threats- Usually external factors you can’t control • Understanding trends, customer buying “hot buttons” and industry issues is your best “Risk Management” tool for dealing with EXTERNAL Factors. Keys to Direct Marketing Success •Focus on values and set your prices accordingly. •Know what customers in your area want. •Seek unique varieties of stand crops or unique experiences for agritourism. •Develop a marketing plan and revise as needed. •Communication is critical. Learn from others. More Getting Started • Think about what you grow or produce well (quality is critical for direct marketing) • Decide which market(s) work best for you (have a plan). • Check out any regulatory requirements for marketing your product(s). • Think about your story. What makes your product unique?. • RUN THE NUMBERS. Niche/cache marketing is not a panacea for production agriculture’s problems. Less capital intensive is not the same as less management intensive. Land-use regulations may limit added value enterprises and entertainment, yet these activities may be necessary to justify Higher land-related costs.