Market Strategy
Initially, Cattle Producers Marketing Coop will focus on farmers markets to establish its name in the greater central Iowa area while creating early cash flow. As the plan progresses over the next five years, added emphasis will be placed on sales to select grocery stores and distributors, including restaurants. Although greater gross margins are possible through direct sales, grocery and distributors.
The market analysis shows a broad range of prospective clients, covering a wide range of consumers who are generally interested in quality food products. The largest of these groups is that of mainstream America, which is projected to grow at 12 percent per year.
Market Goals and Objectives
At the beginning of this year, White Tablecloth Restaurant in Big City signed a one-year agreement to take no less than $2,500 of Cattle Producers Marketing Coop meat products per month.
$ 2500.00 x 12 = $30,000
Marketing Coop has doubled the number of farmers markets it will be attending and estimates at least an 85 percent increase in sales over last year.
$37500.00 x 185% = $69,375
Total Restaurant and Farmers Markets: $99,375
The coop is also visiting with All Foods Markets regarding the possibility of moving over $100,000 in product annually through their market in Big City.
Total Sales to Farmers Markets and Restaurant in Year 1
|
January |
February |
March |
April |
May |
June |
|
$2,750 |
$3,000 |
$4,000 |
$4,125 |
$7,500 |
$15,000 |
|
July |
August |
September |
October |
November |
December |
|
$19,000 |
$22,500 |
$12,000 |
$4,500 |
$2,500 |
$2,500 |
Overall Marketing Strategy
The company’s strategy is based on being the best at providing what the consumer feels is best for them. “Our Only Choice Is What Is Best for You and Your Family” is the motto of the cooperative – a message owners feel sells the venture to its customers and its member/owners alike. A goal is to capitalize on consumer needs, wants and fears.
The company also is building a seamless marketing process that takes the flagship beef products from the pen to the platter, while being guided along multiple inroads of direct and representative marketing routes. The planned advertising slant will be towards making the business and its members good neighbors to their customers, regardless of who they are.
Marketing Strategies
- Farmers markets to build one-on-one relationships and name recognition in the greater Midlands trade area. These markets also utilize sweat equity and create cash flow.
- Representative sales, such as restaurant and grocery, to build tonnage.
- Live cattle commodity pass-through contracts to liquidate producer overrun and off-grade.
- Livestock.
- Specialty foods and crafts division to supplement owner/member incomes.
- Willingness to take any seat at the table as long as it is profitable.
Pricing Strategy
The company’s fresh meat products must arrive at the market wearing a label that reflects savings when compared to actual value. Once consumer allegiance is established, there may be some room to move prices upward relative to the competition. Pricing will be such that Marketing Coop products initially reach the consumers’ hands somewhere in the mid to upper portion of
the top one-third of the range for similar products.
Dealers and distributors will be encouraged by a pricing system that allows them a margin somewhere in the 33 percent range.
Handcrafted items and specially prepared foods will be priced at whatever the local market will appropriately handle.
Promotion Strategy
The promotional goal is to maintain a level of visibility in order to constantly keep moving increasing volumes of product into an expanding trade territory. First, Marketing Coop will concentrate on the core of the greater Midlands area, then move outward in the most opportune directions as they arise.
Although present contacts in the grocery and restaurant business are primarily local, the company will use those relationships to gain referrals to more distant markets.
Marketing Programs
Marketing efforts will focus on getting very close to the consumer and identifying those issues most important to them, and then providing an answer via tailored food products or handcrafted items. The packaging for this year’s farmers markets activities will include a new company logo, a picture of the farm families who own the cooperative and seasonal gardening tips. Also, there will be instructions on how to use the biodegradable bags made from recycled products to mulch gardens and flowerbeds to slow weed growth.
Two of our members have established themselves as weekly regulars on local radio shows. The weekly syndicated radio program “What’s New to Eat” responded to our letter of suggestion and invited Bernice Aguila to record a feature each week on how to prepare various ethnic dishes that contain Marketing Coop meat cuts. Plus, Andrew Michaels is going to be a panel member on the “Buy Local First” radio program in Big City.
We have signed on as a half-time sponsor for Cy Country College football.
Although the schedule is not finalized, the Mobile Cooking and Catering committee is lining up a full season of weekend sampling demonstrations and special events appearances. At least one of the plans underway is to host a “High School Tailgate Night” at every school in the Midlands region and donate the proceeds to area public day care centers.
The company is also continuing the practice of weekly press releases to all greater Midland newspapers regarding issues that speak to the advantages of purchasing certain products – ultra-fresh, locally grown foods, produced and processed by local labor using minimum artificial inputs.
Finally, Cattle Producers Marketing Coop has purchased 350,000 printed napkins to be made available to Midland area sports booster clubs, church groups, service clubs, businesses or any other interests that may be hosting a picnic, employee gathering or public dinner.
Future Products and Services
The company is exploring the addition of other processed items to offer via the convenience store market.
The coop also has studied and quantified how ready access to a commercial kitchen might add to product lines and perhaps even create a source of employment for some of the cooperative member/owners and their families. Pies and baked goods displaying eco-labels and health aspects appear to be promising. Also, the heat-and-serve complete meal market appears to hold some promise. There is the possibility of some contract food preparation done on a scaled basis in a commercial kitchen.
Factory and special events catering, improved live cattle marketing agreements, other meat products, narrow niche ethnic preferences and member/owner services are all subjects that are either under study or on the hot list for consideration.
Sales Methods
Cattle Producers Marketing Coop sells its products to an ever-growing consumer group. Originally geared toward the local farmers market purchasers, the market has grown to include a much larger geographical area, in addition to a broadening specialty response.
The company is selling ultra-high quality and specially tailored attributes in a market segment filled with competition for the middle-of-the-road buyer. The company’s approach is to take its product image to higher market ground and make the most of the image of family farmers doing their honest best to make a living in a fair and ethical manner. The focus has enabled the company to discover voids in the market, then add product as needed to fill those voids. Marketing Coop has worked hard to research specialty food providers, emulating their practices and positioning the company to operate in a similar fashion.
Last year, the company conducted sidewalk surveys at five of the farmers markets attended by the group. Although selling under the name of Golden Meadow Products at the time, it was clear that consumers identified the group with high quality and excellent value. Changing the name to Cattle Producers Marketing Coop is expected to allow the newly formed value added cooperative to draw those consumer opinions to an even wider assortment of food products and handcrafted items.
The restaurant trade has been explored and Marketing Coop is now identified as a brand name on the menu of White Tablecloth Restaurant in Big City, IA. The establishment of approved commercial kitchen space will open up new opportunities for partially prepared food items, some with special marinades.
Marketing Coop tells all buyers of its product that they are not just customers; rather, it relates to them that they are very special and the company wants to feed them just like a member of the family.
The coop has an owner/member speaker bureau that is providing programs for area service clubs and special events; and it has been training for on-site cooking demonstrations and working with the Head Chef at the White Tablecloth Restaurant to develop new recipes. The company also has assured potential grocery retailers that it will be available to greet customers and provide weekend parking lot lunch activities to help them draw customers.
To set itself apart, the company puts its “face” with the food and stresses authenticity and concern for the consumer. This past summer, all buyers at the Big City Farmers Market received free compact discs that held pictures of each of the member farm families and short narratives about how they depend on the production of a quality product for a livelihood.
Eight years ago, it was a loosely assembled group wishing to sell beef. Today, Marketing Coop represents a formally organized marketing organization that is offering consumers the part of Americana most desired. The company is selling quality, taste, security, value and environmental safety. It is selling the Cattle Producers Marketing Coop brand.
Experience so far has been that once the coop establishes relationships with its customers, it can often move prices to a premium over other suppliers. Once the consumer is honestly assured that the company offers the best, they will select its products with greater enthusiasm and less price sensitivity.
The keys to viability are to establish a fluid market that will pay a fair price for goods produced on the farms of the company’s member/owners. In order to do so, the focus over the next five years will be on the creation of three different levels of marketing options:
- consumer direct,
- distributor/restaurant, and
- grocery.
Each of those categories can presently be divided this way.
| Consumer Direct |
Distributor/Restaurant |
Grocery |
| Farmer's Market |
White tablecloth restaurant |
All Food Markets, Inc. |
| Counter Sales at Locker |
White tablecloth restaurant |
|
| Catering |
|
|
There is yet another sales category that might best be described as a service for the member/owners of Marketing Coop. That is commodity grade live cattle markets.
Marketing assistance will be a break-even consulting service for the owner/members.
Sales Forecast
It is presently forecast for the group’s sales to grow by 266 percent over the next 12 months due to: 1) a doubling of the number of farmers markets to be attended, and 2) the written commitment by White Tablecloth Restaurant to take no less than $30,000 in product this next year.
The All Foods Grocery account is showing promise. Marketing Coop is following up on several details with the top level management and hopes to get a confirmation for delivery dates in the very near future. Samples of Marketing Coop products were provided to the executive officers during the last visit with favorable reaction.
Not included in these sales figures is any incidental income that Marketing Coop may receive from services provided to the owner/members, such as Live Cattle Marketing Consultation fees.
Instead of actually being a market for large volumes of live cattle, Marketing Coop will first be a “seeker” of markets for live cattle. Centralized management and quality control may foster opportunities to pool production and secure equitable delivery contracts with major packers.
Sales Programs
The owners/members of Marketing Coop have each completed the following matrix as a way of identifying how their sweat equity might best be applied to an overall marketing effort.
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Categories and Skills |
Experience?
Yes No |
Comments |
| Business |
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| Accounting |
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| Hiring/Firing |
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| Purchasing |
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| Marketing |
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| Cold Call Sales |
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| Telephone Sales |
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| Production Management |
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| Processing |
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| Safety |
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| Supply Chain Management |
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| Quality |
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| Supervision |
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| Cash Flow Management |
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| Account Management |
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When quantified and totaled, the results indicated adequate available talent for a scaled up farmers market effort and any in-store cooking demonstrations or “friendly” consumer contacts at barbecue events or outdoor catering efforts. Cold call sales and telephone sales are areas that may need to be outsourced if the group wishes to concentrate on one-on-one sales and door-to-door, routestyle deliveries.
Direct sales to the consumer provide the greatest gross returns to Marketing Coop. However, direct sales rely on a large amount of sweat equity and account for virtually all expenditures of volunteer time and effort.
The General Manager, along with one or two available Board Members, will make all sales calls on commercial buyers.
A commissioned sales incentive program is under consideration for meat brokers and others who have inquired about adding Marketing Coop meat and specialty products to their sales brochures and gift catalogs.
Strategic Alliances
There are opportunities for building strategic alliances with several other suppliers of unique handcrafted items and organic, or minimum input, food products. Some of these include:
- Eastern Colonies Crafter’s Guild
- Famous Organic Food Marketing Coop
- Home on the Free Range Meats
- Big City Community Supported Ag Ranch
- We Want One-of-a-Kind Buyers Club
- Everybody’s Favorite Everything Exchange
Approached properly, these interests may be willing to enter into a mutually beneficial agreement in which they would add non-competing Marketing Coop items to their product lines and allow the cooperative to do likewise with their goods.
Milestones
The following table lists important milestones with time periods for actual or expected dates of completion. The milestone schedule indicates that Cattle Producers Marketing Coop, a value added cooperative, has come about as a result of deliberate and thoughtful planning, organization and research.
|
Summer 1998 |
Winter 1998 |
Spring 1999 |
Summer 1999 |
|
Idea |
Organize |
Research |
Feasibility |
|
Brainstorm |
Cooperative |
Possibilities |
Practicalities |
|
Considered Concepts with the help of a facilitator. |
Selected business
structure for the group. Elected
Board of Directors |
Inventoried
capabilities and available markets
with help of ISU and other service
providers.
|
Quantified what efforts are most
likely to generate
cash first. |
|
Fall 1999 |
Winter 1999 |
Spring 2000 |
Summer 2000 |
|
Capital |
Marketing |
Capital |
Production |
|
Equities |
Realities |
Borrow |
Manufacture |
|
Defined needed
member cash
and sweat equity
investment.
|
Hired part-time
sales consultant
and made first
sales calls to
measure real
market demand. |
Complete
business plan
and apply for
financial
assistance.
|
Create and
market products
under brand
name. |
Financial Plan - Marketing
We have forecast a relatively rapid growth for Cattle Producers Marketing Coop. Although it may seem ambitious based on historical sales of the assorted participants in Golden Meadow Products, the rate of early growth estimates are bolstered by the expanded product lines and a doubling of farmers market sales
efforts.
Past Performance
|
January |
February |
March |
April |
May |
June |
|
$12,000 |
$12,000 |
$12,500 |
$12,750 |
$16,350 |
$23,500 |
|
July |
August |
September |
October |
November |
December |
|
$26,275 |
$30,000 |
$20,000 |
$11,000 |
$11,000 |
$12,000 |
We are also encouraged by letters received from All Foods Grocery and White Tablecloth Restaurant (copies enclosed), although each provides incentives to continue with an aggressive sales effort.
We are also encouraged about the possibilities now being presented in the convenience foods and specialty baked items.
And finally, the owner/members of Cattle Producers Marketing Coop have agreed to put up 50 percent equity in the form of initial cash investment. The owner/members are entering into this venture as a well-informed group that understands that their cash and near-term sweat equity may well be the keys to the long-term success of this venture.
Sales Literature
The coop currently is working on a line of brochures and sales materials to assist in marketing and efforts toward prospective new wholesale and retail accounts. Newly designed labels indicate the direction of the company.
Possible advantages of developing a Web site are being explored, but questions remain about how best to draw consumers to it.
Test Marketing
The last three years of sales have been test marketing and development sales. The company learned about its customers, who they are and what they want.
Marketing Budget
Advertising .................................................................................................................. $0.00
Travel ........................................................................................................................ $250.00
Supplies ................................................................................................................... $100.00
Business Cards (Misc. Expense) .......................................................................... $50.00
Key Assumptions
One assumption made by the company is that consumer demand for natural beef product will continue in the future. Another assumption is that large competitors will not enter the natural beef market for at least three to five years since the market is yet to be fully defined. Yet another assumption is that consumers will continue to appreciate Marketing Coop’s attempt to provide a “face” with its food and to provide detailed quality information about how the cattle were raised.
White Tablecloth Restaurant Example (JPEG)
All Foods Market, Inc Example (JPEG)