Direct Marketing

Dingwall - Wednesday 15th March 2006

David LambFood Marketing Team Leader & Senior Consultant

Consultancy Services Division - SAC

The Rural Food Opportunity

• Regionally produced food

• Local sourcing initiatives

• Food tourism

• Direct marketing

• Regionality

- An opportunity?

Farmers’ Market Growth

• Direct connections

• Around 67 active farmers’ markets

• Popular markets becoming more frequent

• New linkages being sought

• New opportunities– Christmas– Regional– Specialist

Co-operative ownership

• FARMA & Soil Association in England

• SAFM in Scotland

• Groups working together– Tayside Organic Network– Angus Farm Shops network– Ayrshire initiatives

• Local foods depend on networks

• Can derive strength from numbers

SAFM Initiatives

• Working with VisitScotland

• Collaborative Marketing

• Encouraging organisers and producers to work together

• Encouraging membership for shared benefits– Marketing– Pricing– Resources

Collaborative & Direct Marketing• Aim of direct marketing is to meet consumers’ needs

precisely, then develop long-term relationships with them

• The fastest growing marketing discipline world-wide

• Integrated process of communication

• Targeted marketing

Today’s Business Environment

• Retail multiple dominance

• Increased competition

• Greater variety of outlets available

to the consumer

• Increased use of and familiarity with

technology

• Growth of foodservice

Route to the Consumer• Consumers are more sophisticated

• Using a direct marketing approach means ‘personalisation’ of the offering to persuade consumers to become brand loyal

• Over half the UK population has an e-mail address

• 70% of the population has a mobile phone

• People read every text they get

• Website advertising has a high‘conversion rate’

Types of Direct Marketing

• On-line• Exhibitions• Farmers’ markets • Text messaging• E-mail• Direct mail• Catalogues/contract magazines• Outdoor/transport• Interactive digital television• Telemarketing/

Database marketing

• Household distribution and marketing

• Direct response press/TV/radio/cinema

Direct Marketing: The Implications for Companies

• Market knowledge & customer awareness:– Consumer requirements– Systems– Distribution capability & compatibility

• Credible & innovative product proposition:– Quality product & packaging– Knowledge of product market– Well-researched product

Working as a Group

• Competitive advantage - Trade Shows, Exhibitions

• Negotiation power

• Communication skills essential

• Regional advantage

• Requires full scale co-operation

• Requires trust

Marketing Opportunities

• Joint Marketing

• Food awards

• Exhibition & event marketing

• Local products into regional outlets

• Locality marketing - linking with tourism

….. many other opportunities

Today’s Consumer

Dingwall - Wednesday 15th March 2006

David Lamb

Food Marketing Team Leader & Senior Consultant

Consultancy Services Division - SAC

Today’s Business Environment

• Retail multiple dominance

• Increased competition

• Greater variety of outlets available

to the consumer

• Increased use of and familiarity with

technology

• Growth of foodservice

The Twenty-First Century Consumer• Have less time – ‘cash rich, time poor’

• Want greater choice

• Seek niche products

• Entertainment/leisure time more important

• Concerned for the environment

• Embrace modern technology

• More sophisticated

• Demand convenience

• Seek information

• Want value for money

• Want quality

The Twenty-First Century Consumer

• Increasing polarisation– Top end market demands - variety, interesting food, new

foods, new tastes, authenticity, freshness, individuality …etc.

– Bottom end market demands - ultra-value, own label, less interested in: country of origin / production methods / ingredients, packaging …etc.

• Food needs to fit a broader range of lifestyles• Need to understand lifestyle changes• The lazy, fussy, irrational, contradictory

and intolerant consumer

• Healthy eating, functional foods, GMOs• Organics - mainstream, increasing opportunities• Indulgence• Pester power - the children’s sector, character merchandising• Snacking, grazing, eating on-the-go• ‘Microwaveability’• Online grocery shopping - set to increase as it offers convenience &

saves time• Convenience - working women, single person households• Eating ‘out in’ or ‘retail take-away’• Value for money expectation• Influence of travel• Food is a fashion!

Key Consumer Issues

What will we eat in the future?Five crucial

market shapers

PrescriptiveEating

health &healthyeating,

increased medical

knowledge,healthgivingfood

properties

Global Fusion

shrinkingglobe,

increasingmigration,diversity

of restaurant

offers

100% RiskFree

growingconcerns

over food

safety,loss of

faith with bigbrands & Cos,desire to buy

local

SpecialPlus

Wideningincome gapPolarisationof weekday

&weekendmeals,

Affluentwill seekout moreauthentic

foods

Fast &EasyGreatertimepressures,smallerhouseholdswill drive:1 HMR2 Snacking3 <30minmeal

Components of a Marketing Strategy

• Strategy Objectives:– Growth?– Extension?– NPD?– Diversification?

• Objectives:– Precise– Measurable– Time-related– Stretch your business

Ansoff matrix

Market Penetration

Increase Market ShareIncrease Product Usage

Product DevelopmentImprove Product

Extend product lineNew Products

Market DevelopmentLook for new markets

Geographically New Uses

Diversification

Related Unrelated Activities

Present

Present NewProduct

Mark

et

New

Successful BrandsTo create a successful Brand a company must:

• Make quality a priority• Offer superior service• Get there first• Differentiate its brands• Develop a unique positioning concept• Support the brand• Deliver consistency

Benefits From Branding

• Added value to product

• Identity transfer from company to consumer

• Brand loyalty from consumer

• Brand preference from consumer

• Getting ahead of competition

• Strength in numbers

• A valuable negotiating platform with retail and foodservice buyers

Sales Management

• Small scale sales management

• The role of a Sales Manager

• Qualities required

• Challenges faced

• Interpersonal skills

• Approach of other operators

The role of a Sales Manager

1. Represent the Company1. Represent the Company

6. Grow Sales & Profit6. Grow Sales & Profit

5. Negotiate with Customers

5. Negotiate with Customers

4. Deliver Service to the Customer

4. Deliver Service to the Customer

3. Know the Market3. Know the Market

2. Represent the Customer2. Represent the Customer