Market Guide for Alberta Food Processors

 
 
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  Marketing strategy | Distribution strategy | Product to the consumer | Product promotion | Pricing

Food processors will use this Market Guide to identify markets and distribution channels. Choosing the most effective option for selling the product is influenced by the goals and objectives of the company. Developing marketing and distributing strategies helps determine the steps needed to achieve success.

Marketing Strategy

A marketing strategy includes determining your target market, choosing how to position your product, deciding how your market will find out about you, creating a reason why customers should buy from you, and developing a consistent message and focus for your business.

Strategy objectives include identifying, motivating, communicating with and selling to your target market. An effective marketing strategy focuses on the key elements of identifying the target market, creating a company identity, reaching the market and determining how much it will cost to do this.

Actions are the actual ways to carry out the strategies. They include publicity, trade shows, advertising, Internet presence, networking, toll-free telephone assistance and alliances with others selling products or services that compliment yours.

Knowing the opportunities through various marketing and distribution channels helps develop both strategies and actions that are the framework of a successful business.

Successful marketing of a food product depends on:

  • the marketing environment
  • including trends in consumer behaviour, developments in technology, competition, the economy, changes in business structures and opportunities
  • the goals of the firm
  • launch a new business or product, maintain market share, or expand and grow
  • the capabilities of the firm
  • production capabilities, financial limitations, management skills, strengths and weaknesses within the organization
  • the target market
  • who is the consumer, what are the consumer's needs and wants, and where is the consumer most likely to purchase the product
  • the product
  • desired image, the storage, handling and preparation required, and label information
  • the economic feasibility
  • costs, price and profitability
Distribution Strategy

A distribution strategy answers the question:

"How will I sell my product?"

Several avenues exist for food manufacturers to bring their products to the consumer.

Examples
A manufacturer of chocolate and chocolate products could sell:

  • from a store-front directly to consumers
  • chocolate supplies, like truffle shells and chocolate cups, to chocolatiers and chefs in hotels (foodservice)
  • customized packages and shapes for businesses to use as gifts
  • unbranded luxury chocolates to high quality chocolate shops
  • chocolates packaged with a store's own brand to a supermarket chain
  • brand name tourist chocolates to souvenir shops
  • brand name chocolates to a wholesaler that distributes to various stores
It's important for the processor to be aware of sales, service and delivery of the product. If the product is mishandled or poorly represented to the consumer, it reflects negatively on the processor.

Product to the Consumer

There are several options available for companies to take a food product to the consumer. These include:

  • selling directly to the consumer
  • retail sales
  • foodservice and hospitality
  • food wholesalers/distributors
  • co-packing
  • industry trade shows
The decisions that are made about how to take a product to the consumer also affect marketing strategies related to:
  • pricing
  • packaging
  • promotions
In an attempt to reduce risk, a company may try to sell its product using all of the above mentioned techniques. However, most companies choose to specialize in one or two. Specializing allows the company to concentrate its efforts and develop some economies of scale in meeting the needs of one or two markets.

Product Promotion

A good, well-researched product doesn't necessarily mean success in the marketplace. Knowing what appeals to the customer and why, is critical to successful sales. Retail and foodservice buyers also want to know what the food processor is going to do to promote the sales of the product.

Consumer demand can be instrumental in convincing retail, foodservice and wholesale buyers to carry a product.

Creating and maintaining demand through promotional avenues such as those following adds to the sales potential of the product.

Advertising
Advertising is used to influence consumer perceptions and attitudes about a product. It's used to establish a long-term market base. Messages about a product can be distributed through television, radio, billboards, newspapers, newspaper supplements and magazines.

Price promotion
Price promotion stimulates quick sales response to penetrate a market or to generate cash. Coupons and rebates are often used. For example, manufacturers may offer price incentives to allow retailers, foodservice operators and wholesalers to purchase products at a discount for a limited period of time. In turn, these buyers may pass all, part or none of the incentive onto consumers.

Merchandising promotions
Merchandising promotion are used to catch the attention of consumers and draws them to a product. End-of-aisle displays, additional shelf facings, banners and signs, table tents and in-store demonstrations are examples of this type of promotion.

Public relations activities
Public relations activities can also be an effective way of promoting a product. This is done by offering to donate the product or contribute to a special event. This helps create a positive company image.

Pricing

The pricing of the product is important. Costs of production and overhead must be met. In addition, dollars are needed to reinvest into the company to ensure a strong, long-lasting business.

The product can't be priced so high that the consumer will not buy it, or so low that break-even costs are not recovered. In either case, the business will run out of money. Clear, detailed records of costs are essential to effectively set prices.

 
 
 
 

Other Documents in the Series

 
  Market Guide for Alberta Food Processors - Current Document
Market Guide for Alberta Food Processors: Food Brokers
 
 
 
 
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For more information about the content of this document, contact Kathy Bosse.
This document is maintained by Mary Ann Nelson.
This information published to the web on April 30, 2002.
Last Reviewed/Revised on January 12, 2017.