wolfe market

Market Research and Advertising: 

Market Research and Advertising Kent Wolfe December 4th, 2002

Why Market Research?: 

Why Market Research? “It is easier to sell something people want than it is to sell something that is easy to produce”

Market Research: 

Market Research Exposed to market research each and every day (TV & Radio programming, cell phone packages, beverage products, shelf space, restaurant location). Used to determine customer perceptions, attitudes and preferences (i.e., Georgia Grown, war with Iraq, package or container size) Who uses what, when, how much, and what are they willing to pay

Questions Market Research Can Answer: 

Questions Market Research Can Answer

Other Market Research Uses: 

Other Market Research Uses Produce manager survey Aquaculture Pelletized Poultry Peanut shelling facility Marketing cooperative Needs assessment Rabbit market analysis Clam market analysis

Pricing Suggestion: 

Pricing Suggestion Research suggests rounding prices to the nearest Os. Consumers don’t distinguish between a price of $1.50 and $1.59. However, they do perceive a price difference between $1.59 and $1.60

How Consumers Found Out About The Farmers Markets They Patron: 

How Consumers Found Out About The Farmers Markets They Patron Source Percentage Roadside Signs 50% Newspapers 49% Passing by 49% Word of mouth 42% Flyers 15% Magazines 1% Television 1% Radio 1% Internet 0.3%

Additional Market Research Uses: 

Additional Market Research Uses Market research guides your communication with current and potential customers Market research helps you identify opportunities in the marketplace. Market research minimizes the risk of doing business.

Types of Market Research: 

Types of Market Research Focus groups Taste tests in-depth interviews Surveys - mail, telephone and intercept

New Agribusiness Opportunities – First Step is Target Market Identification: 

New Agribusiness Opportunities – First Step is Target Market Identification Target Market – A segment of the population that is most likely to use your product or service. Usually described using demographic variables like, Gender, Income, Race, Age Used to: Determine market potential Develop product packaging Choose marketing channels Develop marketing mix and advertising strategy

Target Market Examples: 

Target Market Examples

Market Segmentation: 

Market Segmentation

Micro Brewery: 

Micro Brewery Micro brewed consumers consume an average of $250 worth of beer annually.  Younger people were more likely to have tried a microbrew. Thirty-six percent of beer drinkers between the ages of 25 and 34 had tried a microbrew. In contrast, 27% of beer drinkers between the ages 34 through 45 and 20% of those 45 and older had tried microbrews.  The appeal of micro brewed beer was strongest among White beer drinkers were almost twice as likely as black Americans to try a microbrew.

Market Segmentation : 

Market Segmentation A 1995 National Pork Producers Council study identified five very different pork consumer segments and they are as follows: Main Street Today Quality Carnivores Good N’ Plenty Guys Apathetic Eaters Politically Correct Eaters

Main Street Today Segment: 

Main Street Today Segment Main Street Today Largest segment of the population Consist of strong pork supporters. Very price sensitive- cost conscious shoppers. Purchasing decisions are price based rather than product preference. • Women (57%) • Middle aged - (20%) being 50-59 years of age • Lowest income $31,000 median household income • Least educated – less than 10% have college degrees • Blue collar occupations • 19% widowed/divorced (more than the other five segments) • Average household size • Most non-white group (29% are African American or Hispanic)

Quality Carnivores Segment: 

Quality Carnivores Segment Quality Carnivores Generally males Prefer family and fine dining restaurants Not concerned with nutrition Indulge in food and prefer premium cuts of meat •Males (77%) •On average 36 years old •Not primary shopper •High incomes ($48,500 household incomes) •Have some college (62%) or a college degree (26%) •Married (66%) •On average is non-white •Smaller households

Good N’ Plenty Guys Segment: 

Good N’ Plenty Guys Segment Good N’ Plenty Guys frequent fast food and take-out restaurants meat lovers second most responsive to pork behind the Main Street Today segment. •Mainly male •Young (49% of the segment is under 35 years of age) •$38,000 median household income •45% have some college •Employed- split between blue and white color •61% were married •Have large households 47% have 4+ family members •Primarily non-white

Market Analysis: 

Market Analysis Two groups were identified Local Market - area residents Metro Atlanta ethnic markets Local Market Interviewed 232 potential customers residing within 60 miles of Toccoa 71 people (232) indicated they did not eat fish 69% of area residents are fish consumers Ethnic Markets Visited 8 ethnic markets in Metro Atlanta

Local Market Customer Base: 

Local Market Customer Base

Market Potential: 

Market Potential Market Potential – the maximum sales opportunities achieved by all sellers in the market. Sets the upper limit on consumption units

Estimating Market Potential: 

Estimating Market Potential MP=NxQ; where MP= Market Potential N= number of buyers Q= average number purchased by each buyer

Estimating Market Potential: 

Estimating Market Potential Information needed to estimate market potential Market Area - US, State, County, city Roadside stands 10-20 mile draw School field trips – 45 miles or 45 minutes Demographic composition of the specified area Number of people in area with similar characteristics Consumption or usage levels

Estimating Market Share: 

Estimating Market Share A market area and the target market within that area will support a certain level of sales A companies portion of these total sales is referred to as its market share Estimating market share is not easy but essential

Three Steps to Estimating Market Share: 

Three Steps to Estimating Market Share Estimate the total market potential Identify each of your competitors and estimate their market share Decide or estimate what you think your market share might be or what portion of the market you intend to capture

Example Market Share Calculation: 

Example Market Share Calculation Market share for new hot sauce to be marketed locally A supermarket visit identified 10 sauce competitors Market share data is not available, assume each product captures and equal share of the market (10%)

Example Market Share Calculation- Con’t.: 

Example Market Share Calculation- Con’t. New product will mean there are 11 competing products Assuming equal market share, you can assume to capture roughly 9.1% of the market Does 9.1% of the market generate enough sales to make your business feasible?

Estimated Retail Sales: 

Estimated Retail Sales The potential retail sales for a specific retail operation can be estimated by using a standard formula: ES= P x EXP x (ADI/MDI) x MS where ES= Estimated Sales P= Trade Area population EXP= Average expenditures for retail outlet category ADI = Area Estimated Average Household Disposable Income MDI = Georgia Average Household Disposable Income MS= Estimated Market Share

Estimated Retail Sales Example: 

Estimated Retail Sales Example 50% of Americans consume beer Thirty-six percent of microbrew drinkers are 25 -34, 27% are 34 - 45 and 20% are 45 and older. Microbrew consumers have average incomes of $54,000 Microbrew consumers spend between $250 annually on these products Microbrewery Market Area Demographic Information 50,000 residents 15% are 25-34 16% are 34-45 29% are 45+ 25% have incomes over $54,000

Income Information: 

Income Information Area Estimated Av.e Household Disposable In.=$67,000 Georgia Average Household Disposable Income =$30,240

Trade Area Sales Estimate: 

Trade Area Sales Estimate ES= P x EXP x (ADI/MDI) x MS P= 50,000 x 50% (percentage of beer drinkers) =25,000 25,000 x 15% = 3,750 25,000 x 16% = 4,000 25,000 x 29% = 7,250 15,000 37% of area residents have incomes over 50K 15,000 *37% = 5,550 EXP=$250 (ADI/MDI)=($67,000/$30,240) MS = Estimated Market Share = 10% ES= 5,550 x $250 x ($67,000/30,240) x 10% = $307,416

Demographic and Population Sources: 

Demographic and Population Sources Sources for Demographic Information: Chamber of Commerce University (www.agecon.uga.edu/~caed/) www.georgia.stats.uga.edu US Census Bureau (WWW.CENSUS.GOV) Easy Demographics (WWW.EASYDEMOGRAPHICS.COM)

Easy Demographic Data (WWW.EASIDEMOGRAPHICS.COM): 

Easy Demographic Data (WWW.EASIDEMOGRAPHICS.COM) Miles 20 15 10 Population: 82,683 59,644 36,409 Households: 31,974 22,806 13,773 White Population: 77,003 56,126 34,497 Black Population: 4,881 2,901 1,506 Asian Population: 623 473 307 Hispanic Population: 719 518 275 Median Age: 37.0 36.7 36.4 Med. HH Inc.($): $29,572 $30226 $32,214 Av. HH Inc. ($): $40,855 $41,877 $43,165

Consumption and Usage : 

Consumption and Usage Sources for information on Consumption and usage: USDA – per capita food consumption estimates Trade Associations Commodity Groups (e.g. Nation Pork Producers Association) University Research

Marketing: 

Marketing There is no “silver bullet” or formula for success Marketing is more like an art than a science

What is Marketing?: 

What is Marketing? “Marketing is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives.” -American Marketing Association

What Exactly Does That Mean?: 

What Exactly Does That Mean? Marketing is... All the actions you & your employees take that promote the sale of your products. Building good relationships with your customers.

What Exactly Does That Mean?: 

What Exactly Does That Mean? The Company Name Company Goals Location Pricing Packaging Promotional Activities Advertising Sales Techniques Business Cards Employee Uniforms

The Goal of Marketing: 

The Goal of Marketing To present your products/services to the market in a way that makes them more attractive than the products/services of your competitors.

Advertising/Promotion: 

Advertising/Promotion Advertising – Delivers information Promotion – Involves generating consumer response Publicity – inexpensive or free advertising

Types of Advertising: 

Types of Advertising

Newspaper: 

Newspaper Advantages Broad mkt coverage Immediate Short lead time Flexible ad size Visibility of product Color Use of coupons People believe what they read! Disadvantages Inconsistent reproduction One day life span Limited demographics “Lost in the Crowd” Lack of movement & sound

Radio: 

Radio Advantages Demographic selection High frequency Immediate Sound reinforcement Quick flexibility Disadvantages Restrictive message length Need for repetition Short recall factor Cluttered placement

Television: 

Television Advantages Use of sight, sound, motion, & color Mass coverage Immediate Demographic selection Disadvantages Short exposure Expensive production Expensive to air Cluttered placement Viewing time drops as income increases

Direct Mail: 

Direct Mail Advantages Demographic selection Unlimited message length Consistent reproduction Direct response by order or coupon Disadvantages Expensive Difficult to obtain “pure” mailing lists Long lead time Negative reaction to junk mail

Outdoor: 

Outdoor Advantages Reaches large audience Long-term exposure Color & graphics Forms include billboards, posters, illuminated signs, moving vehicle signs, bench ads Disadvantages Limited message length Expensive to produce & place Difficult to obtain the best locations Legal restrictions for use

Examples of Advertising Costs and Exposure: 

Examples of Advertising Costs and Exposure

Signage is important: 

Signage is important Information that should be included on your sign: Location Business hours Special Promotions Seasonal Products Other attractions Sign should reflect the stands personality

Signage Is Important: 

Signage Is Important

Words Read At Various Speeds : 

Words Read At Various Speeds

Packaging Counts – Specialty Food Expert : 

Packaging Counts – Specialty Food Expert Have a beautiful product, including jar and label Use expensive beautiful glass Go to trade shows to show product as well as find out what the competition is doing Make your product presentation count-90%of the purchases of these niche products is based on product presentation.

Packaging: 

Packaging First Line of Promotion is Product Packaging and is your silent salesperson Evaluate your target market and create a package that is consistent with their expectations- i,e. single jar or 3-pack, Packaging should reflect a product’s desired personality (Tennessee Toe Jam) Packaging Considerations (size, plastic glass, dressy) Selling a 8 oz. Jar of Jelly for $6.95, it needs to be packaged accordingly

Packaging Examples: 

Packaging Examples

Hot Sauce Packaging Examples: 

Hot Sauce Packaging Examples $6.95 (5 oz) $6.29 (5 oz) $7.59 (4 oz)

Jams and Jelly Packaging Examples: 

Jams and Jelly Packaging Examples $4.50 (16 oz) $5.25 (10 oz) $5.00 (9.9 oz)

Know Your Target Market: 

Know Your Target Market Where and when does my target market look for information What is the most effective means of reaching my target market ? i.e., television, radio, print material, etc.. What type of packaging are they expecting

“Adding Value to Georgia’s Agricultural Economy Through Research and Extension”: 

“Adding Value to Georgia’s Agricultural Economy Through Research and Extension” www.agecon.uga.edu/~caed/ College of Agricultural & Environmental Sciences