Thursday, March 26, 2009

Some Research Updates

One of the things we professors do is review manuscripts being considered for publication in academic journals. This morning, I reviewed two papers. One was on the application of business management techniques to identify new opportunities on farm operations. The other was on the benefits of diversifying farm enterprises. In that paper, they showed that those farms in a region in Kenya that had higher levels of diversification also had lower levels of food insecurity (being able to feed the family).

These papers point out some pertinent economic/managerial concepts. First, the farm is a business, no matter what is produced. In the first paper, they reported the results of walking a Slovenian dairy farmer through alternative opportunities, finally settling on breeding livestock. How many of our farmers could benefit from a systematic review of current or emerging opportunities? Nearly 100%! Always look to improve operations or go down a different path, if needed.

Second, diversification is important. The paper focused on enterprise diversification, but market diversification can be just as important. Enterprise diversification allows you to smooth income over several alternative enterprises, taking advantage of high prices or yields in one to compensate for low prices or yields in another. Market diversification, selling to more than one buyer, helps protect you should one market go sour.

These simple concepts underscore the need to plan for business success. We at Penn State Cooperative Extension have a number of programs to help you develop a business plan. Other states have some great resources, as well. Just be sure to take time to plan for business success and to carefully think through all management options.

Monday, March 23, 2009

How do you turn negative comments about your business idea into opportunities?

Becoming an entrepreneur is no easy task. You will spend countless hours honing your business idea and plan, but your dream can easily be crushed by a negative reaction.

"There will always be people who question your strategies and abilities,"says Romanus Wolter, author of "Kick Start Your Success". It's easy to become aggravated by these negative comments, but you must remember that these negative comments can be learning experiences because there are always chunks of truth in what is said. Wolter also states that "every situation has the potential to uncover hidden opportunities to grow your business and shed new light on how to overcome challenges. Your adeptness at tapping into these opportunities can open the door to your next strategic breakthrough."

Wolter's points to remember in turning negative comments into opportunities:
1. Catch yourself. Being confrontational suppresses people who have unique ideas.
2. Recognize that, more often than not, people want to help you succeed. People may not know how to give constructive criticism. Help them to feel like they are part of your business's success.
3. Be open to unorthodox ideas. Don't dismiss an idea just because it sounds unusual.
4. Always remember that you're the business owner. Write down people's ideas, but don't feel obligated to apply them.
5. Confirm your direction with successful people. Discussing your ideas with other successful businesspeople promotes creative problem solving.

Negative reactions article

Are you developing a business idea? How have you dealt with negative reactions so far? Have you been severely discouraged? Have you discussed your idea with other successful business owners?

Thursday, March 12, 2009

How effective is promotional swag?

What exactly is swag? Swag (Stuff We All Get) is corporate/branded merchandise given out for free to promote the company/brand. As a business owner, you probably have Tshirts, hats, etc that you give to your employees to wear at work, but have you ever thought about giving out your branded items to the public?

A recent study done by the Advertising Specialty Institute (ASI) found that swag generated a lower cost-per-impression rate over national magazine ads and prime time TV ads. They found that the cost-per-impression for promotional products was an average of $0.004, compared to $0.033 for national magazine ads and $0.019 for prime time TV ads.

The ASI not only found that swag had a lower cost-per-impression rate, but also found swag to be highly remembered by survey participants. The ASI surveyed 600 participants (who were mostly businesspeople over the age of 21) to recall swag received over the past year. Significant findings include:

-84% of participants remembered an advertiser based on a product they received.
-24% of participants revealed that they are more likely to do business with an advertiser based on swag they've received.
-Within the category of wearable swag, bags were reported to be the most frequently used items, with participants stating an average use of 9 times per month.

ASI president and CEO, Tim Andrews, said that "During a time when we're facing turbulent economic conditions, this research advises marketers and business owners to invest in advertising specialties now more than ever. Advertising specialties provide measurable results for a very reasonable investment."

Swag article

What kind of advertising do you use? Does it include swag? If not, would you consider adding swag as advertising? What is the return on investment for your current advertising?

Thursday, March 5, 2009

Why is packaging an important part of sustainability?

One of the top trends driving consumer purchases this year is sustainability, reports Information Resources Inc, a company that provides retail tracking information. In 2002, only 5 products were released with an environmentally friendly claim. In 2007, the number of products jumped to 328.

There are 3 reasons companies use sustainability practices.
1. long term well-being of the environment
2. betterment of society
3. enhancing the bottom line

According to Patrick Smorch, Georgia-Pacific's director of packaging sustainability, packaging affects every aspect of business. "From product protection to logistics and shelf appeal, packaging is a necessity for consumer packaged goods companies. Even the smallest efforts at sustainability can garner big savings when you consider the effects on the entire packaging supply chain."

Consumers are demanding sustainable packaging. Jeanne von Zastrow, senior director of member services for the Food Marketing Insitute, has made this a high-priority issues with FMI members. "On the part of consumers, there is an increasing interest in buying food products, including meat and poultry products, based on packaging. By that, I don't mean packaging that is decorative or that comes in a certain style. What I really mean is purchasing products that have fact, as little packaging as possible. And as retailers, we're trying to figure out how our companies can make their operations more renewable and friendlier to the environment. The packages that our food products come in are getting a lot of our attention."

sustainable packaging article

As a food producer, how much research have you done on packaging your product? If you are considering changing to a more sustainable package, would market your product as sustainably packaged?