Friday, November 30, 2012

Promo Prices--When is Enough Enough?

Everyone loves a sale, right?  This might be your strategy for getting customers into your store, but can you have too many promotions?

In a Supermarket Guru article from earlier this year, frequent promotions and more consistent pricing strategies are explored.  Seventy-six percent of retailers are sending more price changes to stores in 2012 as compared to 2011 shows research from Retail Systems Research (RSR).  With these numerous price changes, it seems retailers are promoting a hyper-promotional environment.  



Why is this happening?  Retailers were surveyed by RSR and the findings show:

  • Increased price sensitivity of consumers (67%, up from 58% in 2011 and 46% in 2010).
  • Increased pricing aggressiveness from competitors (51%, up from 48% in 2011 and 38% in 2010).
  • Increased price transparency—the impact of comparative price shopping (47%, up from 40% in 2011 and 11% in 2010).
  • Need to protect our brand’s price image (42%, up from 38% in 2011 and 28% in 2010).
  • Need to provide consistency in price across channels (27%, down from 32% in 2011 but up from 6% in 2010).
One outcome the article describes is that " 41% of retailer executives surveyed say their companies have become more promotions-driven in 2012, up from 31% who said this in 2010; only 12% focus more on everyday low prices, the findings show...Yet among retail winners (with comp-store sales growth in excess of 3% annually, says RSR), the simple discounting of high-low pricing (38%) and Everyday Low Pricing (25%) are the primary pricing levers. Only retailers classified as losers (annual comp-store sales growth under 3%) used a hyper-promotional strategy (18%)."  The survey didn't explore beyond pricing and promotions, so a hyper-promotional strategy isn't the only reason these stores might be considered "losers".  It is also important to think about what services, assortments, convenience, and expertise your store offers.  

Learn more about the 4 P's (Pricing, Promotion, Product, and Placement) in the Resource Center of PAMarketMaker.com or in the Value-Added Marketing Series section of the Penn State Farm Business Management page.

As an agricultural entrepreneur, do you run promotions?  How often?  How do your customers respond to promotions?



Tuesday, November 27, 2012

Winter is a Great Time to Make Your Social Media Plan

Winter provides farm and food business owners the opportunity to reflect on the year past while planning for the coming year.  While you are planning planting and/or production quantities and schedules, updating financial records, attending professional development events, and evaluating marketing outlets, consider developing your social media presence and strategy as well.   And if you are using social media, remember that your presence shouldn't go into hibernation even though the ground outside may be covered with snow.

Don't let your social media presence go 
into hibernation, like this bear, 
during the winter months.
I read this article yesterday that provides a timely reminder about the importance of creating a social media strategy and maintaining your presence year-round.  The author also provides a couple of helpful tips:
  • Plan a schedule of topics for posts during the coming year.
  • Use scheduling tools offered with many social media tools to pre-load content.
If you have an active social media presence during the growing and selling seasons, you want to maintain that visibility during the off-season.  Followers unfamiliar with farming and food production may be interested in learning about what goes on "behind-the-scenes" that makes what is visible, and easily shared during the summer months, happen.  You can easily recruit followers to provide their input for decisions and options you're weighing.  Larger packages vs. individual servings? Heirloom tomatoes vs. standard breeds? Which new products to offer? Ask! Read about how one farm marketer did just this.

Interested in creating a social media presence for your business or jump starting your existing presence with a social media strategy?  Check out Penn State Extension's Social Media Boot Camps for Ag Businesses.  Registration for the first two ends on Dec. 3, 2012.

Wednesday, November 14, 2012

$250,000 Millionaires

Guest Editorial by Dr. James Beierlein

In this year's presidential campaign, there was a great deal of talk about taxing the rich guys - the so called $250,000 millionaires.  As is normally the case, there is more to this statement. Let's look at this a little deeper.

The U.S. has the highest corporate tax rate (Federal rate of 35 percent) in the world. Most of the major economic powers have a corporate tax rate in the range of 20-25 percent, with some places like Ireland having a rate of 11 percent.  It is easy to see why our corporations look to locate overseas.

Source: CNN Money
Tax rates have an impact on the legal structure that firms adopt.  This is why many small businesses operate as small business corporations (often called Sub-chapter C firms).  By doing this, they gain all the benefits of being a corporation, such as limited liability for the owners and having things like health care be a tax deductible expense.  Also, the owners can elect to have the profits from these firms taxed at lower personal income tax rates rather than the corporate rate (35%).

Small businesses generate around 70 percent of all the new jobs in economy and, usually, are the birthplace for most innovations.  These firms are the winners and the ones that kept us competitive.  With an average profit rate (5 percent), a firm would need sales of just $5 million to reach this $250,000 threshold. Keeping a heavy tax burden on these employment generators does not make economic sense, especially during an economic slump.  But, I was always taught that being a millionaire started with a million dollars, not $250,000.

Friday, November 9, 2012

Pinterest Secret Boards - Make Use of Them for Your Business

Pinterest recently unveiled their newest feature - secret boards.  Here are a few pieces of information about secret boards and how you can make use of them in your business.
  • You can have up to three of these secret boards (in addition to your public boards). 
  • You can not make an existing board secret. 
  • You can make a secret board public, but you cannot change it back to secret status.
  • Only the creator of the secret board can make it public.
  • Other people see your secret board through invitations you send allowing them to contribute to the board.
  • There does not appear to be a limit on the number of invitations you can send to make people contributors to a secret board.

If you have a business where you deal with clients and need to show them pictures of things you are discussing (flowers, designs, packaging, labels, etc.) or even need a central place to archive links to articles and other online information (provided it's pin-able), these new secret boards may be a valuable tool to enhancing customer relationships and improving communication. 

A secret Pinterest board could also be handy as a tool for internal communication, idea sharing, and brainstorming.  Since original photos can be pinned, you, your family members, employees, or anyone you want to get involved, could pin photos of things they see away from the business to spark discussions or for future planning.

Since you can only have up to three secret boards at a time, managing your use of them will be important.  You can delete boards as you complete projects, allowing you to create a new secret board.  Your other option is to simply add and remove contributors.


For more information about Pinterest's secret boards, click here.  We invite you to visit our Pinterest boards here.  Do you think secret Pinterest boards will help you in your business?


Thursday, November 1, 2012

Learning a Little Bit About the PA MarketMaker Partners (part 3)

So far, I've given some background information on 4 of the 9 organizations that have partnered with PA MarketMaker to bring MarketMaker to Pennsylvania and to help their members join the MarketMaker network.  Below, I will describe 2 more of these organizations.

Retail Farm Market Association 
(http://www.pafarm.com/)   

The mission of the Retail Farm Market Association is to benefit members through education, promotion, cooperation, and representation of Pennsylvania Direct to Consumer Agricultural Marketing.

The objectives of the Retail Farm Market Association (PaFarm) are three-fold:

1. Communication.  To facilitate the exchange of ideas and improve communication and linkages among members of the industry in Pennsylvania State and nationally.  To represent and communicate the interests of the industry to government, Cooperative Extension, other agencies and associations, and to the consumer.
2. Education.  Help industry members improve marketing techniques through dissemination of information through industry networks, Cooperative Extension, the Pennsylvania Department of Agriculture and an annual Direct Marketing Conference, and encourage support and direct research and educational programs relating to the direct marketing of farm products.
3. Promotion.  Promote the establishment and expansion of farm direct marketing operations in Pennsylvania.  Encourage and carry out promotional activities to increase consumer awareness of the Pennsylvania farm direct marketing industry.

Membership to PaFarm is free and open to anyone interested in direct-to-consumer farm marketing.  


Fair Food (http://www.fairfoodphilly.org/)  

Fair Food started with the narrow focus of connecting farmers and chefs as a strategy for keeping more farmland in production and now works with a broad range of buyers as well as hundreds of producers, from the small-scale diversified farmer to midsize growers who supply colleges, hospitals, and other institutions.

Over the past ten years, Fair Food has built demand for local food across all sectors of the food system. Along with their partners in the field, their work has created a paradigm shift in the public’s perception about what eating by shining a spotlight on the men and women who grow food.

Fair Food promotes the importance of family farms and creates a year-round marketplace for fresh, local and humane food products in the Greater Philadelphia region. They do so by providing an assortment of programs and services that contribute to a strong and sustainable local food system.

Are you a member of either one of these organizations?  How have they helped you market your products or learn about your industry?