What is Cause Marketing? Part 2

By Dr Kathy Kelley, Professor of Horticultural Marketing and Business Management, and Dana Ollendyke, Extension Associate

The first installment in this series can be found here.
With so many local, national, and international causes already being supported by your customers’ generosity, how can you compete with them and the businesses that sponsor them?  Consider the following, which could help bolster your cause marketing program.

Make sure that the donation process is transparent  

For each dollar that you collect, you need to show how and where these funds were distributed. Consumers who do not see any progress associated with the money they donated may very well choose not to donate anymore.  Be sure to indicate on your website, in your promotional activities, and in-store that money collected helps to do great things.

Consider a cause that has a natural connection with your business  

Perhaps a member of your business has suffered from a disease that could benefit from a donation.  If this is the case, ask him or her to be the “face” of the effort. In the Wharton Business School article "To Increase Charitable Appeal to the Heart-- Not the Head", it describes how consumers are more likely to donate to a cause if “presented with a personal case of an identifiable victim” through pictures and stories, “something that purely engages the emotional system”.

For example, we can all probably think of at least one product that dons a pink ribbon in honor of breast cancer research.  One of the businesses that does so is J. Lohr Vineyards & Wines.  The winery actually began partnering with cause organizers due to a family member’s breast cancer fight.  Founder Jerry Lohr lost his wife, Carol, in 2008 and through sales of both J. Lohr Carol’s Vineyard Cabernet Sauvignon and Sauvignon Blanc, the company had a 2014 goal of “providing over 4,000 mammograms to women who would otherwise be unable to afford them”. Certainly, the cause is worthy enough, but by associating a name, story, and image of Carol Lohr, we begin to associate the brand with a real family – not just a business.

Image 1.  Screenshot of the J. Lohr Vineyards website that details their mission to provide mammograms to women in need.

Or perhaps there is an environmental issue that greatly impacts your city/state/region. Sales from Crimson Pinot Noir, produced by Ata Rangi Vineyard (Martinborough, New Zealand) supports Project Crimson, “to protect and renew our spectacular red-flowering rata and pohutukawa – New Zealand’s iconic native ‘Christmas trees’.” Not only can consumers support the cause by purchasing this wine (Image 2), they can also purchase Northern Rata trees and plant them on their own property (Image 3).

Image 2.  Label showcasing the partnership with Project Crimson.

Image 3.  Sign advertising the sale of the rare Rata trees.

More considerations on creating a cause marketing program to follow in part 3 of this series!

What is Cause Marketing? Part 1

By Dr Kathy Kelley, Professor of Horticultural Marketing and Business Management, and Dana Ollendyke, Extension Associate

Have you seen advertisements like the one below (Image 1) where a portion of the profits benefits a charity or cause?  The official definition of cause marketing from BusinessDictionary.com is "joint funding and promotional strategy in which a firm's sales are linked (and a percentage of the sales revenue is donated) to a charity or other public cause.  However, unlike philanthropy, money spent in cause-related marketing is considered an expense is expected to show a return."

Image 1. With every purchase of this tea, Teavana will donate $1 to the Oprah Winfrey Leadership Academy Foundation.

Although profits should not be the primary reason for building a cause marketing program into your promotional plan, it is suggested that consumers “feel good” about spending their money on goods that support a cause.  In 2013, Cone Communications (a public relations and marketing agency) released their Social Impact Study.  Some interesting take-aways from that study include:

• Over half (54%) of U.S. consumers “bought a product associated with a cause” during a 12-month period ending in fall 2013, which was a 170% increase from 1993.
• A majority of consumers (91%) want “even more of the products and services they use to support [a] cause, and 88% want “to hear how companies are supporting social and environmental issues”.
• If you are looking to better connect with Millennial consumers via social media, they are more likely to “use social media to engage with companies around [causes]” than the general population, 64% vs. 51%, respectively.

This data is just the beginning of your research into determining if cause marketing is right for your business.  

Our next post will focus on cause marketing program development.  

Encouraging Consumer Purchasing, Part II

Last week I wrote about providing your customers with ideas on how your fresh and processed products can be used in ways other than their primary purpose.  This week I have a couple of more ideas that might just work for your business.

Value-added, but “light”

Processing your own value-added products (for example, processing tomatoes and other ingredients into pasta sauce, salsa, etc.) may seem overwhelming, but you do have another option for offering “meal solutions.”

What might you do if you have most, if not all, of the ingredients for salsa or pasta sauce, but you don’t feel that the private label approach (an item manufactured by another business but labeled as your own branded product) is appropriate for your business?  Or, perhaps you have an idea for a processed product and cannot find the right “finished” product offered by a private label company?

One option is to create a “light” version of a value-added product by selecting a recipe and assembling ingredients in the amounts appropriate for the recipe.  

For example, I’m sure that your customers would probably like to make your family’s award-winning salsa for their New Year’s Eve or Super Bowl party.  What you would need to do to accommodate them would be to assemble enough of each of the ingredients so that your customer would only need to refer to your recipe and prepare the salsa from all that was provided in the package.

If your recipe calls for salt and/or pepper or another pantry staple, you could omit it from the value-added light package and alert the customer that they need to add these one or two ingredients to make the dish.

What food trend does your product pair with or complement? 

Along with suggesting additional ways that your fresh and value-added products can be used as an ingredient or in a unique way, consider how you can link your goods with longstanding and/or the latest food trends.  According to a couple of sources, “fermented” foods such as kimchee and sauerkraut will gain notice in 2015.  Which of your foods would complement these dishes, or what ingredients could consumers buy from you to make their own?

Perhaps you do not make and sell your own alcoholic beverages, but your product would be a perfect pairing for a local wine, craft beer, hard cider, or even a distillery’s hard liquor (we've seen great growth in consumption - and will continue to see interest in these beverages continue).  Where can you find information as to potential pairings that you could suggest to your customers?  Here is a short list of resources:

• Gourmetsleuth.com offers suggestions for a fair number of fresh or dried fruits, while 
  
  
  
  Foodrepublic.com provides an Infographic on pairing wine and vegetables.
• WineFolly posted a wine guide that also provides a list of what prepared foods (e.g. salty foods, vegetable dishes, roasted foods, sweets). 
• •A downloadable chart created by the Brewers Association shows what beers pair with salads and a wide variety of meat dishes, while a list of foods that pair well with hard ciders can be found here: http://www.matchingfoodandwine.com/

While these are just a few ideas, these strategies can help you provide your customers with one, two, three, or more ways to use the products you sell.  You’re really only limited by your imagination.

When Targeting Retailers Rather Than Consumers

by Winifred McGee, Extension Educator, Dauphin Co.

In our Penn State Extension Food for Profit workshops, we routinely discuss the necessity of targeting a niche market, then innovating related to that market segments' wants and needs - actually getting ahead of your customer by creating what they will want next (before it is realized by target customers).  This process takes time and research, first identifying a set of similarities that define the group, learning as much as possible about the group (observation, social media, etc.) to create a strategy to reach these customers in ways that count.  This process works well for entrepreneurs who will make the product, and make direct sales.

However, if an entrepreneur sets his or her sights on selling to retailers (the ones who actually target, and sell to consumers) the market research can get a little "murky."  A new perspective is needed to develop an effective wholesale campaign that hits home for buyers - one that replicates the targeting to actual food customers.

Being a link in the supply chain takes connections,
work and perseverance!

The SBA Blog Spot has a great article by Caron Beesley (a small business owner, a writer, and marketing communications consultant) that provides basic insights in how to become a supplier to larger retailers.  While it may be a long, uphill stretch to attract the attention of buyers and get products from your small-scale food manufacturing concern placed in a substantial retail chain, Beesley indicates that the potential rewards are substantial.  She references a study that showed that after a small supplier lands a contract from a bigger company, the small company's revenues go up 250 percent and they create about 150 percent more jobs in just two or three years.

So, how to enter this lucrative marketplace?  Like all marketing activities, the process starts with research.  Start with identifying potential buyers, and then define the value your small business can offer if they carry your product(s).  One source of information about potential wholesale buyers is the Supplier Connection.  This portal allows small suppliers (with less than $50 million in revenues, or less than 500 employees) to market themselves (free of charge!) to a number of large U.S. companies at the same time, so that the "large guys" can expand the variety of items sold, while giving capable small firms the opportunities of the large marketplace.

The Supplier Connection is relatively easy to use, with a downloadable manual to facilitate new businesses' participation.  Each participating member creates a profile to display company information, their small business commitment, usage of Supplier Connection within their company, contacts, etc.  Accessing the Supplier Connection enables small-scale food business owners to identify businesses that are the best fit for their product lines.

Most times, just being registered is not enough.  There are several social media channels that will make a business more apt to be noticed through Supplier Connection.  One of these is a Linkedin group for small business members.  In addition, Supplier Connection can be visited on Facebook, Twitter, or Google+ for news, updates and information on small business development and they have a blog that hosts a monthly contest and highlights small business success stories.  Each of these are a great way to be actively learning and launching a wholesale endeavor.

No route to launching a food business is 100% guaranteed - and there may be many barriers to break through on the way to successful wholesale marketing of a food product.  However, taking the time to get to know the "lay of the land" to successfully connect with potential customers will increase the chance of success in becoming a part of a supply chain - and getting a food product on its way to the consumer.