how do i develop a strategic marketing plan perdue uni
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Strategic Moves for Today’s ChallengesTRANSCRIPT
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Strategic Business Planning for Commercial Producers
How Do I Develop A Strategic Marketing Plan?
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Strategic Business Planning for Commercial Producers
Types of Marketing Planning •Strategic Marketing
– Encompasses the entire farm strategy
– Deals with the broader issue of determining firm’s strategic position in the market and how to create value from that position
•Product Marketing/Pricing– Deals with the tactical side of selling a product
– Similar to a set of standard operating procedures for marketing a particular product.
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Strategic Business Planning for Commercial Producers
Marketing Defined . . .
Marketing is anticipating the needs and wants of targeted customers and managing the process through which these needs and wants are satisfied . . . profitably
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Strategic Business Planning for Commercial Producers
Management Philosophies
Production Concept
Marketing Concept
Starting Point
Product Market
Focus Product Quality and Features
Customer needs
Means
Improving production & distribution efficiency
Integrated Marketing
Ends Profits through sales volume
Profits through
customer satisfaction
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Strategic Business Planning for Commercial Producers
Building A Strategic Marketing Plan
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Strategic Business Planning for Commercial Producers
Strategic Marketing Plan
1. Environmental Analysis (SWOT) 2. Identifying Customers3. Competitor/Value Creation Analysis4. Marketing Mix: The 4 P’s5. Financial Analysis and Budget6. Implementation and Control Plan
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Strategic Business Planning for Commercial Producers
1. Know Your Marketplace
• Strengths, Weaknesses, Opportunities, and Threats (SWOT)
• Trends and changes:
– Market analysis
– Segmentation
– Prioritizing target markets
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Strategic Business Planning for Commercial Producers
2. Who Are Your Customers?
Customer: firm or person that buys
your product
Consumer: firm or person that eventually uses
your product
Customersvs.
Consumers
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Strategic Business Planning for Commercial Producers
Customer/Consumer Trends
Customers• Just-in-time
inventory• Business to
business (B2B)• Manufacturing
mentality• Industrialization of
agriculture
Consumers• Households with
fewer people• Active, on-the-go
lifestyles• Concern over the
health aspect of food, with a desire for good taste
• Less time for meal prep
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Strategic Business Planning for Commercial Producers
Know What Is Important to Your Customer
• Get inside the mind of your customers• Find out why they would buy from you
. . . or why they would not• Truly understand their needs
– Intentional listening– Customer analysis– Solve their problems
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Strategic Business Planning for Commercial Producers
3. Competitor/Value Creation Analysis
•Competitive analysis
•Reallocation of resources if necessary
•Positioning
Make sure you are distinctively differentfrom your competition
in areas of importanceto your customers
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Strategic Business Planning for Commercial Producers
The Value ChainFirm Infrastructure
Human Resource Management
Technological Development
Procurement
InboundLogistics
Operations Outbound Logistics
Marketing& Sales
Service
MA
RG
IN
MA
RG
IN
Supporting
Activities
Primary
Activities
Relationship with Suppliers Relationship with Buyers
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Strategic Business Planning for Commercial Producers
4. Determining the Marketing Mix
•The set of controllable variables that will accomplish the marketing objectives:
• Product strategy• Place (distribution) strategy• Promotion (communication) strategy• Pricing strategy
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Strategic Business Planning for Commercial Producers
Product Strategy• Portfolio of Products
– Corn, soybeans, hogs, dairy, cattle, value-added grain, fruits and vegetables, custom farming operations, custom feeding operations
– Fits your strengths and weaknesses– Provides acceptable risk/return tradeoff– Meets needs of a particular customer segment
• Quality– No. 1 versus No. 2 – GMO vs. non-GMO
• Service– Timely custom operations– Pre-sorting of grain or livestock quality
• Volume– Large and small quantities– Guaranteed volumes (contract)
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Strategic Business Planning for Commercial Producers
McDonald’s Product Package
• Food• Fast service• Fun for the kids• Variety• Non-smoking• Consistent product
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Strategic Business Planning for Commercial Producers
Waxy Corn
• Corn with specific type of starch• Delivery Schedule• Specific hybrids • Quality requirements• Purity level
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Strategic Business Planning for Commercial Producers
Place Strategy•Storage
– On-farm vs. off-farm– Segregated or IP
•Timing– On-demand– Equal amounts throughout the year
•Location– Delivery to multiple points
•Assortments– Delivery of different amounts to different places at
different times
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Strategic Business Planning for Commercial Producers
American Crystal Sugar (ACS)
• M&M Mars changed from a commodity focus for inputs to a quality assurance focus.
• ACS keeps the sugar silo at the M&M Mars plant full.
• ACS shifted from a warehouse next to the ACS factory in Minnesota to an ACS warehouse in Pennsylvania near the candy plant.
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Strategic Business Planning for Commercial Producers
Spring Wheat Bakers
• Farmer-owned cooperative that processes wheat, grown on Northern Plains into flour
• Frozen and par-baked bread factory in Atlanta, Georgia, a population center
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Strategic Business Planning for Commercial Producers
Promotion Strategy•Advertising
– Creating brochures and other advertisements on the products your farm provides and what value they add
– Creating a farm logo
•Personal Selling– Telling your customers how you create value– Meeting your grain elevator manager for coffee– Having lunch with the lender– Taking a Christmas pie to your landlord(s)
•Public Relations– Being a good neighbor– Being involved in the community– Open house days
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Strategic Business Planning for Commercial Producers
Price Strategy
Price is the cost the customer must bear in order to obtain the product. It includes:
• list price• discounts• allowances• payment period• credit terms
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Strategic Business Planning for Commercial Producers
Pricing Methods• Value-Based Pricing
– Set price based on buyers’ perception of value (rather than on the seller’s costs)
• Cost-Based Pricing– Add a standard markup to the cost of the
product• Competition-Based Pricing
– Set price based on following competitors’ prices
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Strategic Business Planning for Commercial Producers
Value-Based Pricing
• Customer Oriented
• Based on customer’s perceived value
• Match price to perceived value
• Brand loyalty
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Strategic Business Planning for Commercial Producers
Competition-Based Pricing
• Price decision based on actions of competition
• Less attention on cost or product demand
• Large firms all charge the same price
• Smaller firms follow lead of large firms, may offer a slightly lower price
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Strategic Business Planning for Commercial Producers
5. Financial Analysis and Budgeting
• Estimate the demand given the pricing and promotion strategy.
• Determine expenses associated with production and marketing.
• Determine anticipated cash flows.• Will strategy cash flow? When?• What are the critical assumptions of the
financial analysis and what are the impacts of changes in those assumptions?
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Strategic Business Planning for Commercial Producers
6. Implementation and Control
• Focus attention of everyone on delivering what the customer wants– Management of people– Monitoring and control
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Strategic Business Planning for Commercial Producers
How Do I Build A Product Pricing Plan in A Commodity Market?
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Strategic Business Planning for Commercial Producers
Commodity Marketing
• Homogeneous Product –differentiation in services, not product.
• Low-cost strategy
• What about the price received?– Does every producer get the same price?
• Marketing plans – systematic pricing strategies.
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Strategic Business Planning for Commercial Producers
What Is A Marketing Plan?
A marketing plan is an outline of
price, date and quantity objectives
used to generate a reasonable return
for the business given the existing
market conditions.
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Strategic Business Planning for Commercial Producers
Diagram of A Corn Marketing Plan
Price Triggers
Date Triggers
Jan. 1
March 15 May 1 Harvest
$2.50/bu $2.40/bu
Sell 20% Sell 20% Sell 60%r
Existing Price
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Strategic Business Planning for Commercial Producers
What Does A Marketing Plan Do?
• Detached from the decision
• Proper perspective
• Introduces discipline
• Check your logic
• What if …...
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Strategic Business Planning for Commercial Producers
Steps In A Marketing Plan• Relationship between the business plan
and marketing plan
• Production history and expectations
• Expected prices
• Production costs
• Price and date targets
• Review and evaluation
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Strategic Business Planning for Commercial Producers
The Business Plan and the Marketing Plan
• Marketing plan is implementation of the
BP
• Implementation consistent with objectives
• What are important considerations?
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Strategic Business Planning for Commercial Producers
Production History and Expectations
• What is the farm’s history?• Is there an underlying trend?• How variable is production?• Write down expected production.• How does expected production
relate to pre-harvest sales?
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Strategic Business Planning for Commercial Producers
Price Expectations
• Assess the situation– Historic patterns (seasonal)– Basis patterns
• The current situation– Outlook source– Market advisors (?!?)
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Strategic Business Planning for Commercial Producers
AgMAS – An Objective Study of Market Advisory Services• 25 Firms – subscribe to each service.• Observe and follow recommendations• Compare to a benchmark price answer
Questions:– Do they consistently beat the benchmark?– Do they reduce risk and increase returns?– Are they as good with corn as with soybeans?– http://www.farmdoc.uiuc.edu/agmas/
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Strategic Business Planning for Commercial Producers
The Difference
• What’s the difference between the market advisory service and the marketing plan?– “Beat the Market” vs. “Accepting What
the Market is Giving.”– Active Marketing = Private Information– Active Marketing vs. Passive Marketing
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Strategic Business Planning for Commercial Producers
Cost of Production
• What are the costs?• What revenue cover costs?• What price is needed to cover
the costs?• Is this price realistic?
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Strategic Business Planning for Commercial Producers
Price, Date and Quantity Objectives• Identify price and date triggers ..
– When should pre-harvest sales be made?
– What prices are acceptable?
– Prices attainable?
• Set quantity objectives according to
– Financial need
– Risk perceptions
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Strategic Business Planning for Commercial Producers
Evaluate and Review
•Stay disciplined!•Evaluate your actions.•Are conditions changing?
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Strategic Business Planning for Commercial Producers
A Little Marketing Philosophy ...
• Bad outcomes still happen …• Never compare to the market
high ..• Your plan for your
operation ...
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Strategic Business Planning for Commercial Producers
Strategic Business Planning for Commercial Producers