Researching Your Markets - So You Want to Farm in Maine · Researching Your Markets James C....

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Researching Your Markets Researching Your Markets James C. McConnon, Jr. James C. McConnon, Jr. Extension Business and Economics Specialist Extension Business and Economics Specialist and Professor of Economics and Professor of Economics University of Maine University of Maine

Transcript of Researching Your Markets - So You Want to Farm in Maine · Researching Your Markets James C....

Page 1: Researching Your Markets - So You Want to Farm in Maine · Researching Your Markets James C. McConnon, Jr. Extension Business and Economics Specialist ... A plan of action developed

Researching Your MarketsResearching Your Markets

James C. McConnon, Jr.James C. McConnon, Jr.Extension Business and Economics Specialist Extension Business and Economics Specialist and Professor of Economicsand Professor of EconomicsUniversity of MaineUniversity of Maine

Page 2: Researching Your Markets - So You Want to Farm in Maine · Researching Your Markets James C. McConnon, Jr. Extension Business and Economics Specialist ... A plan of action developed

OverviewOverviewBasic Marketing ConceptsBasic Marketing Concepts

Researching Your MarketResearching Your Market

Types of Market ResearchTypes of Market Research

Surveying Your CustomersSurveying Your Customers

Identifying Your Target MarketIdentifying Your Target Market

Digital ResourcesDigital Resources

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Basic Marketing ConceptsBasic Marketing Concepts

What is marketing?What is marketing?

““Everything you do to promote your business fromEverything you do to promote your business fromthe moment you think of the product idea until the moment you think of the product idea until customers buy your products on a regular basis.customers buy your products on a regular basis.””

-- Jay Levinson, author of Guerrilla MarketingJay Levinson, author of Guerrilla Marketing

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What is Marketing?What is Marketing?

The process of finding out what customers want and The process of finding out what customers want and need and satisfying those needs in a profitable way.need and satisfying those needs in a profitable way.

Consumption orientationConsumption orientationProduce what you can sellProduce what you can sellFocus on new opportunitiesFocus on new opportunitiesCustomer determines productionCustomer determines productionTarget marketing techniquesTarget marketing techniques

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Marketing StrategyMarketing Strategy

A plan of action developed by the business to identify and meet A plan of action developed by the business to identify and meet the wantsthe wantsand needs of their customers.and needs of their customers.

Target marketTarget market

DemographicsDemographicsLifestyle PatternsLifestyle PatternsCustomer ExpectationsCustomer Expectations

Marketing mixMarketing mix

ProductProductPlacePlacePromotionPromotionPricePricePositionPosition

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What is Market Research?What is Market Research?Market research is the systematic gathering and analyzing of infMarket research is the systematic gathering and analyzing of informationormationrelated to the marketing of your farm productsrelated to the marketing of your farm products

What are the longWhat are the long--term trends that will affect my business?term trends that will affect my business?

Who are my customers?Who are my customers?

Where can they be reached?Where can they be reached?

What do they want to buy?What do they want to buy?

What influences what they buy?What influences what they buy?

How much money can I expect to make?How much money can I expect to make?

How do I compare to my competitors?How do I compare to my competitors?

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Source: Maine Department of Labor

Maine’s Population is Growing Older

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The Demographics of Social Media Users – 2012

Pew Internet and American Life Project

http://pewinternet.org/Reports/2013/Social-media-users.aspx

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Growing Interest in Local Foods

Page 12: Researching Your Markets - So You Want to Farm in Maine · Researching Your Markets James C. McConnon, Jr. Extension Business and Economics Specialist ... A plan of action developed
Page 13: Researching Your Markets - So You Want to Farm in Maine · Researching Your Markets James C. McConnon, Jr. Extension Business and Economics Specialist ... A plan of action developed
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Why Conduct Market Research?Why Conduct Market Research?

Market research focuses and organizes marketingMarket research focuses and organizes marketinginformationinformation

Keep abreast of changing market conditionsKeep abreast of changing market conditions

Reduce business risksReduce business risks

Spot problems in your current marketSpot problems in your current market

Identify and profit from sales opportunitiesIdentify and profit from sales opportunities

Assist in developing a successful marketing strategyAssist in developing a successful marketing strategy

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Types of Market ResearchTypes of Market Research

You probably will need to use both secondary and primary researcYou probably will need to use both secondary and primary research to h to understand your marketunderstand your market

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Secondary Market Research = Use Existing DataSecondary Market Research = Use Existing Data

Studying information that has already been collectedStudying information that has already been collectedand may be internal or external to your business.and may be internal or external to your business.

►► Primary Market Research = Do It YourselfPrimary Market Research = Do It Yourself

Gathering information by observing people, conducting Gathering information by observing people, conducting surveys, interviewing, or other direct action.surveys, interviewing, or other direct action.

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Secondary ResearchSecondary Research……Internal SourcesInternal Sources

The following sources can show you where your customers live or The following sources can show you where your customers live or workworkand how and what they buy.and how and what they buy.

Sales recordsSales records

EE--mails and social media postingsmails and social media postings

Customer data baseCustomer data base

Customer feedback recordsCustomer feedback records

EmployeesEmployees

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Secondary ResearchSecondary Research……External SourcesExternal SourcesThe following The following ““outsideoutside”” sources can provide you with valuable market informationsources can provide you with valuable market information

LibrariesLibraries

College or UniversityCollege or University

Chambers of commerceChambers of commerce

Wholesalers and suppliersWholesalers and suppliers

Federal and state agenciesFederal and state agencies

Trade associationsTrade associations

Business publicationsBusiness publications

Media representativesMedia representatives

CompetitorsCompetitors

The InternetThe Internet

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0

2

4

6

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Aver

age

mile

s tra

vele

d

Farm Stand Pick-Your-Own Tailgate Farmer's Market GroceryMarket type

Average Distance Traveled

Rural

Urban

Source: Why Consumers Buy-and Don’t Buy-Your Farm Direct Products, University of Maine Cooperative Extension, Bulletin #1160

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Primary Market ResearchPrimary Market Research

Especially important when considering a new market or a market Especially important when considering a new market or a market with little or no available datawith little or no available data

Reactive: gather information by asking questionsReactive: gather information by asking questions

NonNon--reactive: gather information through observationreactive: gather information through observation

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Primary Research...NonPrimary Research...Non--Reactive MethodsReactive Methods

Method of gathering information by observing behavior in a Method of gathering information by observing behavior in a real real ““market market situationsituation””

People watchingPeople watching

Traffic countsTraffic counts

License plate watchingLicense plate watching

Coded coupon redemptionCoded coupon redemption

Page 32: Researching Your Markets - So You Want to Farm in Maine · Researching Your Markets James C. McConnon, Jr. Extension Business and Economics Specialist ... A plan of action developed

Primary ResearchPrimary Research……Reactive MethodsReactive Methods

Gathering information about buying patterns and customer needs tGathering information about buying patterns and customer needs through surveyshrough surveys

Personal InterviewPersonal Interview

Most popular techniqueMost popular techniqueDeal with people oneDeal with people one--onon--oneoneMost costly and timeMost costly and time--consumingconsuming90% response rate90% response rate

Telephone InterviewTelephone Interview

Easy to conduct Easy to conduct -- from your homefrom your homeDeal with people oneDeal with people one--onon--oneoneDifficult to choose subject groupDifficult to choose subject groupPeople may become impatientPeople may become impatient60% response rate60% response rate

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Primary ResearchPrimary Research……Reactive MethodsReactive Methods

Mail (eMail (e--mail) Survey Interviewmail) Survey Interview

Requires a lot of organizationRequires a lot of organizationIdeal for reaching hard to reach peopleIdeal for reaching hard to reach peopleMust get mailing list and select sampleMust get mailing list and select sampleResponse rate can be lowResponse rate can be low

Focus Group InterviewFocus Group Interview

Variation of the personal interviewVariation of the personal interviewDeal with several people at one timeDeal with several people at one timeOften used when developing new productsOften used when developing new productsNeed to select representative groupNeed to select representative groupUsually 100% response rateUsually 100% response rate

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Why Survey Your Customers?Why Survey Your Customers?

Learn about their expectationsLearn about their expectations

Determine their level of satisfactionDetermine their level of satisfaction

Identify strategies for improving salesIdentify strategies for improving sales

Develop a solid customer profileDevelop a solid customer profile

Identify areas for improvementIdentify areas for improvement

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What You Can Learn From Your Customers

Demographic Information (e.g. age, income, household size, occupation, address, etc.)

How often they buy

What they buy

How they learned about you

Where else they shop

Reasons for buying from you

What they want to buy from you in the future

How they rate your products and services

What they like and dislike about your business

Page 36: Researching Your Markets - So You Want to Farm in Maine · Researching Your Markets James C. McConnon, Jr. Extension Business and Economics Specialist ... A plan of action developed

Important First StepsImportant First Steps

Determine a realistic budget for the survey projectDetermine a realistic budget for the survey project

Determine who you plan to surveyDetermine who you plan to survey

Obtain contact information for those you plan to surveyObtain contact information for those you plan to survey

Determine how you plan to administer your surveyDetermine how you plan to administer your survey

Pretest your survey instrumentPretest your survey instrument

Develop a method for analyzing the resultsDevelop a method for analyzing the results

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Factors to Consider When Designing A Survey

Keep the questions brief and clear

Ask questions that can be easily answered

Follow “yes” and “no” questions with a “why” question

Make sure your questions are not offensive

Be honest with the intent of the survey

Don’t answer questions for them

Provide an incentive for completing survey

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Who Do You Survey?

If your customer base is less than 1,000 customers, then surveying everyone may be your best option:

30% response rate (RR) is excellent for business decision-making15% RR is good for planning purposes10% RR will have limited usefulness

If your customer base is greater than 1,000 customers, then selecting a “representative sample” may be your best option

In general, the sample size increases as the customer base increases in size and diversity.

Page 39: Researching Your Markets - So You Want to Farm in Maine · Researching Your Markets James C. McConnon, Jr. Extension Business and Economics Specialist ... A plan of action developed

Sample Customer Survey - Garden CenterDate: ___________________________

(Please circle day) Monday Tuesday Wednesday Thursday Friday Saturday Sunday

Please help us learn more about your wants and needs by taking a

few moments to complete this questionnaire. Allindividual responses are confidential. Place completed forms in the collection box and ask for your 10 percent discount coupon.

CUSTOMER INFORMATION (Circle all that apply.)

1. You are: Male Female Single Married

2. Age: under 24 25-35 36-50 51-65 over 65

3. What town do you live in? ____________________ Zip code: _____________

4. Family income: less than $50,000 $50,000-$100,000 more than $100,000

5. What form of advertising influenced you to shop at Sunny Hill Gardens?

Newspaper ad Direct mail flyer/coupon Radio Television Word of mouth

Newsletter Roadside sign Other (please specify) _______________________

6. What newspapers do you read? _________________________________________

Source: The Garden Center Critique and Merchandising Guide, The University of New Hampshire Cooperative Extension..

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Sample Customer Survey - Garden Center

7. What radio stations do you listen to? _________________________________

8. How many times do you shop at Sunny Hill during the _____ spring?

_____ summer? _____ fall? _____ winter?

9. Do you shop at other garden centers? Which ones? _____________________

_________________________ Why? _______________________________

10. Circle the most important reasons you shop at Sunny Hill:

Convenience

New and unusual products

Customer service

Product quality

Open year-round

Knowledgeable staff

Price

Like to support family business

Wide variety of products

Special promotions, events

Country atmosphere

Other (please specify) ___________________________________________

Source: The Garden Center Critique and Merchandising Guide, The University of New Hampshire Cooperative Extension..

Page 41: Researching Your Markets - So You Want to Farm in Maine · Researching Your Markets James C. McConnon, Jr. Extension Business and Economics Specialist ... A plan of action developed

Sample Customer Survey - Garden CenterCUSTOMER SERVICE

11. Please rate our services and facilities. We want to improve to better meet your needs.

Service/Facility Excellent Good Fair Comments

Easy to locate products

______ _____ _____ _____________ Parking

______ _____ _____ _____________Courteous, knowledgeable sales staff ______ _____ _____ _____________Hours of operation

______ _____ _____ _____________Speedy, efficient checkout

______ _____ _____ _____________Educational materials ______ _____ _____ _____________Informational signs

______ _____ _____ _____________Shopping carts

______ _____ _____ _____________Rest areas

______ _____ _____ _____________Bathrooms

______ _____ _____ _____________

12. Circle services you would like to see offered:

Water garden installation Floral design

Resource library Landscape design plans

Small engine repair Children’s play area

Other (please specify) _________________________________________________________

13.

What seminars/workshops/demonstrations would you attend? __________________________

Source: The Garden Center Critique and Merchandising Guide, The University of New Hampshire Cooperative Extension..

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Sample Customer Survey - Garden Center

PRODUCT INFORMATION

14. Circle products you would like to see offered:

Foliage plants

Small fruits

Aquatic plants

Handcrafts

Water garden supplies

Herbs

Lawn Furniture

Potting Shed

Other (please specify) ________________________________________

15.

Please rate our products and displays:

Product/display Excellent Good Fair Comments

Plant quality _______ _____ _____ ___________________Plant selection _______ _____ _____ ___________________Selection of hard goods _______ _____ _____ ___________________Prices compared with other _______ _____ _____ ___________________garden centers _______ _____ _____ ___________________Product labeling _______ _____ _____ ___________________Attractive displays _______ _____ _____ ___________________

Source: The Garden Center Critique and Merchandising Guide, The University of New Hampshire Cooperative Extension.

Page 43: Researching Your Markets - So You Want to Farm in Maine · Researching Your Markets James C. McConnon, Jr. Extension Business and Economics Specialist ... A plan of action developed

Identifying Your Target MarketIdentifying Your Target Market

Your target market includes the people that you are trying to atYour target market includes the people that you are trying to attracttract

Suggestions for targeting your market:Suggestions for targeting your market:

Focus on a particular geographic areaFocus on a particular geographic areaFocus on your best selling productFocus on your best selling productFocus on those most likely to patronize your businessFocus on those most likely to patronize your business

Consider the 80/20 rule:Consider the 80/20 rule:

80% of your profits come from 20% of your customers80% of your profits come from 20% of your customers80% of your sales come from 20% of your normal product line80% of your sales come from 20% of your normal product line

Page 44: Researching Your Markets - So You Want to Farm in Maine · Researching Your Markets James C. McConnon, Jr. Extension Business and Economics Specialist ... A plan of action developed

Developing a Customer ProfileDeveloping a Customer ProfileDescribe the characteristics of your target audienceDescribe the characteristics of your target audience……

DemographicsDemographics

Typical ageTypical ageIncome levelIncome levelLocation of home or workLocation of home or workEducational levelEducational level

Lifestyle PatternsLifestyle Patterns

Common interestsCommon interestsBeliefsBeliefsValuesValuesBehavior PatternsBehavior Patterns

ExpectationsExpectations

QualityQualityServiceServiceProduct mixProduct mixPricePrice

Page 45: Researching Your Markets - So You Want to Farm in Maine · Researching Your Markets James C. McConnon, Jr. Extension Business and Economics Specialist ... A plan of action developed

Customer Profile ExampleCustomer Profile ExampleDemographicsDemographics

45% of nursery plant purchases are made by women shopping alone.45% of nursery plant purchases are made by women shopping alone.19% are made by men shopping alone.19% are made by men shopping alone.27% are made by couples who shop together.27% are made by couples who shop together.Affluent people spend most money but least time landscaping.Affluent people spend most money but least time landscaping.MiddleMiddle--income spend least money but most time landscaping.income spend least money but most time landscaping.

Lifestyle PatternsLifestyle Patterns

High involvement in yard care:High involvement in yard care:Purchase at nursery and garden centers onlyPurchase at nursery and garden centers only

Medium involvement in yard care:Medium involvement in yard care:Purchase at nursery, supermarkets, and roadside standsPurchase at nursery, supermarkets, and roadside stands

Low involvement in yard care:Low involvement in yard care:Purchase in garden centers, variety stores, supermarkets and roaPurchase in garden centers, variety stores, supermarkets and roadside standsdside stands

Source: Horticulture Research Institute, Inc., 1987.Source: Horticulture Research Institute, Inc., 1987.

Page 46: Researching Your Markets - So You Want to Farm in Maine · Researching Your Markets James C. McConnon, Jr. Extension Business and Economics Specialist ... A plan of action developed

Digital Resources

Agricultural Marketing Resource Center: www.agmrc.org

Agricultural Marketing Service (USDA): www.ams.usda.gov

Bureau of Labor Statistics (U.S. DOL): www.stats.bls.gov

Economic Research Service (USDA): http://www.ers.usda.gov/

Entrepreneur Magazine: http://www.entrepreneur.com

Mainebusinessworks: www.mainebusinessworks.org

Maine Dept of Agriculture: www.maine.gov/agriculture/index.shtml

Maine DOT: http://www.maine.gov/mdot/traffic/tc.htm

Maine Organic Farmers and Gardeners Association: http://www.mofga.org/

Page 47: Researching Your Markets - So You Want to Farm in Maine · Researching Your Markets James C. McConnon, Jr. Extension Business and Economics Specialist ... A plan of action developed

Digital Resources

Maine State Government: www.maine.gov/spo/economics/index.php

National Sustainable Ag Information Service: www.attra.org

Survey Monkey: www.surveymonkey.com

Supermarket Facts: http://www.fmi.org/research-resources/supermarket-facts

UMaine Extension Business Library: http://umaine.edu/ext-business/

University of Maine: www.umaine.edu

U.S. Census Bureau: www.census.gov

U.S. Census of Agriculture: www.agcensus.usda.gov