Restaurants (and most businesses) are struggling in the current economy, so promotions seem to be running high to get people in the door. But can these promotions actually keep a customer from coming back?
Recently, my husband and I went to a chain restaurant because they were advertising $5 burgers or chicken sandwiches. It seemed like a pretty good deal seeing as the regular price was around $8-10. I ordered a Coke and my husband ordered a beer. When the check came, I was very surprised. The sandwiches were $5 each, but my Coke was $2.80 and the beer was $2. A Coke costing more than a beer? Obviously, I felt ripped off. I've never had a soft drink cost more than 50% of the entree price!
Things like this seem to be happening all too frequently. In a recent casual dining study by Intellaprice (a market analysis company), side dish prices are up 8%, desserts 7%, and bar beverages 2%.
casual dining article http://www.supermarketguru.com/index.cfm/go/sg.viewArticle/articleId/806
As a customer, are these bait-and-switch tactics leaving a bad taste in your mouth? As a restaurant owner, have you raised your prices on "extras"? How do you keep customers coming back after promotions?
Wednesday, October 28, 2009
Friday, October 23, 2009
Use IT to Market Effectively
Times are tough. Money is tight and business owners are having to make difficult decisions. Cutting back on marketing can appear to be an easy and quick way to decrease expenses. However, it's during a recession that it becomes ever more important to maintain and grow your business. You want to be in a position to take advantage of recovery when it comes, rather than playing catch up.
I came across this article today on the importance of marketing in recovering from this economic recession. (Ok, I'll admit it, the article was sent to me by my sister since her husband was interviewed for it). In any case, the article contains some excellent tips for using technology to effectively market and grow your business in our current economy. The tips offered are just as important when times are good. And while the examples are not related to agriculture, it's the principle behind them that should be focused on.
As a farmer or ag business owner, do you see ways to use the tips offered to improve the effectiveness of your marketing? We'd like to hear from anyone with examples to share.
"Marketing Important in Recovery"
I came across this article today on the importance of marketing in recovering from this economic recession. (Ok, I'll admit it, the article was sent to me by my sister since her husband was interviewed for it). In any case, the article contains some excellent tips for using technology to effectively market and grow your business in our current economy. The tips offered are just as important when times are good. And while the examples are not related to agriculture, it's the principle behind them that should be focused on.
As a farmer or ag business owner, do you see ways to use the tips offered to improve the effectiveness of your marketing? We'd like to hear from anyone with examples to share.
"Marketing Important in Recovery"
Friday, October 16, 2009
Can convenience stores extend the shelf life of fresh fruit?
When purchasing a snack at a convenience store, more and more customers are looking for a healthy option. Many convenience stores are starting to sell fruits and veggies, but are facing problems with the very short shelf life. For a store like 7-Eleven (which is estimated to sell 27 million bananas this year), this is a major problem.
7-Eleven has partnered with Fresh Del Monte to create a plastic wrap that slows respiration by keeping most oxygen and moisture out. By wrapping a green banana in this wrap, a banana will stay firm for about 5 days as compared to an unwrapped banana which has a shelf life of only 2 days. 7-Eleven will be testing these wrapped bananas in 27 Dallas-area stores. If the test goes well, the chain expects the wrap to be used in most of its stores by early 2010.
banana wrap article
As an ag entrepreneur, would you use this wrap on your fresh produce? Do you think that this wrap will help you sell more produce and allow you to sell in new venues (like convenience stores, gas stations, rest stops, etc)? As a consumer, would you buy produce wrapped in plastic?
7-Eleven has partnered with Fresh Del Monte to create a plastic wrap that slows respiration by keeping most oxygen and moisture out. By wrapping a green banana in this wrap, a banana will stay firm for about 5 days as compared to an unwrapped banana which has a shelf life of only 2 days. 7-Eleven will be testing these wrapped bananas in 27 Dallas-area stores. If the test goes well, the chain expects the wrap to be used in most of its stores by early 2010.
banana wrap article
As an ag entrepreneur, would you use this wrap on your fresh produce? Do you think that this wrap will help you sell more produce and allow you to sell in new venues (like convenience stores, gas stations, rest stops, etc)? As a consumer, would you buy produce wrapped in plastic?
Wednesday, October 7, 2009
What does 'natural' mean?
The USDA has recently announced that it is working on a definition for the terms 'natural' and 'naturally raised'. Currently, these terms are used voluntarily. As you can imagine, this has led to a lot of confusion and misleading claims. To determine a definition, the USDA is looking to mesh the current definitions of the Food Safety and Inspections Service (FSIS) and the Agricultural Marketing Service (AMS).
The FSIS allows meat and poultry products to use a 'natural' label "provided that the product does not contain any artificial flavor or flavoring, coloring ingredients, chemical preservative, or any other artificial or synthetic ingredient and that the product is not more than ‘minimally processed.’” Minimally processed is then further defined to include “traditional processes used to make food edible or to preserve it or to make it safe for human consumption e.g., smoking, roasting, freezing, drying, and fermenting, or those physical processed which do not fundamentally alter the raw product and/or which only separate a whole, intact food into component parts, e.g., grinding meat, separating eggs… and pressing fruits to produce juices...all products claiming to be natural or a natural food should be accompanied by a brief statement which explains what is meant by the term natural…”
The AMS allows products to be labeled as 'naturally raised' if the meat comes from "animals that have been raised entirely without growth promotants, antibiotics [small exception], and have never been fed animal by-products…and aquatic by-products.”
These two statements aren't that helpful because of the room for loop holes. The USDA hasn't yet announced a final definition, but hopefully it is more clear than the statements given by the FSIS and the AMS.
USDA to define natural article
As an ag entrepreneur, do you advertise any of your products as 'natural'? Do you think a clear definition from the USDA will help or hurt you? As a consumer, do you find more value (and trust) in a USDA definition?
The FSIS allows meat and poultry products to use a 'natural' label "provided that the product does not contain any artificial flavor or flavoring, coloring ingredients, chemical preservative, or any other artificial or synthetic ingredient and that the product is not more than ‘minimally processed.’” Minimally processed is then further defined to include “traditional processes used to make food edible or to preserve it or to make it safe for human consumption e.g., smoking, roasting, freezing, drying, and fermenting, or those physical processed which do not fundamentally alter the raw product and/or which only separate a whole, intact food into component parts, e.g., grinding meat, separating eggs… and pressing fruits to produce juices...all products claiming to be natural or a natural food should be accompanied by a brief statement which explains what is meant by the term natural…”
The AMS allows products to be labeled as 'naturally raised' if the meat comes from "animals that have been raised entirely without growth promotants, antibiotics [small exception], and have never been fed animal by-products…and aquatic by-products.”
These two statements aren't that helpful because of the room for loop holes. The USDA hasn't yet announced a final definition, but hopefully it is more clear than the statements given by the FSIS and the AMS.
USDA to define natural article
As an ag entrepreneur, do you advertise any of your products as 'natural'? Do you think a clear definition from the USDA will help or hurt you? As a consumer, do you find more value (and trust) in a USDA definition?
Friday, September 25, 2009
The customer is NOT always right
Being a business owner has many ups and downs. A "down" may be a difficult customer that requires more attention than others. But is it OK to "fire" a customer?
John Chisholm, a writer for a customer relationship management website (CustomerThink.com), has some guidelines as to when a customer should be "let go". You should "fire" a customer when "the tangible and intangible costs of serving the customer outweigh the cash and any good will received from the customer.”
How do you, the business owner, "fire" a customer? Tracy Fredrychowski, a writer for a search engine optimization website (www.searchengineacademysc.com), has developed a how-to guide on axing a customer.
1. Be professional. “Customers should always be spoken to personally, not by letter or phone. Only when the customer is at a distance, is it appropriate to speak with them about the matter on the telephone. But in no circumstances should the contact be other than verbal. E-mails simply will not do in this case.”
2. Keep emotions out of it. Odds are the customer made you extremely frustrated or angry, but now is not the time to vent. Customers often will take being fired personally, “so it is important that you explain your reasons rationally and clearly.”
3. Offer suggestions. Remember after you have fired them, customers will still need someone to provide the product or perform the service you did. Help them if you can.
4. “Stay polite but firm. It is time to move on.”
Firing a customer article
As a business owner, how have you dealt with difficult customers? Have you ever given a customer "the boot"? Do you have any other suggestions on ending the relationship amicably?
John Chisholm, a writer for a customer relationship management website (CustomerThink.com), has some guidelines as to when a customer should be "let go". You should "fire" a customer when "the tangible and intangible costs of serving the customer outweigh the cash and any good will received from the customer.”
How do you, the business owner, "fire" a customer? Tracy Fredrychowski, a writer for a search engine optimization website (www.searchengineacademysc.com), has developed a how-to guide on axing a customer.
1. Be professional. “Customers should always be spoken to personally, not by letter or phone. Only when the customer is at a distance, is it appropriate to speak with them about the matter on the telephone. But in no circumstances should the contact be other than verbal. E-mails simply will not do in this case.”
2. Keep emotions out of it. Odds are the customer made you extremely frustrated or angry, but now is not the time to vent. Customers often will take being fired personally, “so it is important that you explain your reasons rationally and clearly.”
3. Offer suggestions. Remember after you have fired them, customers will still need someone to provide the product or perform the service you did. Help them if you can.
4. “Stay polite but firm. It is time to move on.”
Firing a customer article
As a business owner, how have you dealt with difficult customers? Have you ever given a customer "the boot"? Do you have any other suggestions on ending the relationship amicably?
Friday, September 18, 2009
Understanding Disagreement on Local Foods
Yesterday, I saw a bit of activity on Twitter about the brand spankin' new farmers' market located a block away from the White House. Some tweets had photos or URLs attached. (As two examples of online reports, see http://bit.ly/TWhWI and http://bit.ly/oowWZ.) The tweets generated some particularly negative responses from farmers that I follow. I'm trying to understand some of the issues. Below, I've thrown out some of my thoughts. However, I'd really like to hear from others on this. Those of you with more of a stake in the game would be great to hear from.
I saw one exchange in which one individual blasted the prices at the WH FM, saying that they reinforced negative stereotypes of local foods being for the "elite." One example cited was $11/lb pork chops. (I saw little discussion of quality-related issues.) Based on this, I wonder what prices the critics would say is fair. Is the $2.49 pork chops advertised in my local grocery store's circular too little? How about double or triple that number? It seems to me that a fair price is whatever the farmer selling it can get for the product. Who among that group wouldn't love to get $11.00? One of the sources listed above indicates that little product was moving. If true, seems like the items were indeed overpriced. In a competitive market, as this one's in, consumers, not bloggers and reporters, get to decide what is overpriced and what isn't.
I also don't understand the notion of this one market giving all others a black eye. This one has something that all others don't have... proximity to the White House. The story embodied in that fact has value to some target consumers. In addition, there's only one opening day. Some customers will tell the story for years about how they bought ag products on the opening day of the White House farmers' market. What's the value of that story? We won't know until Day 2. But this market is unique and has received so much publicity that it seems obvious to me that vendors are going to try to capitalize on that fact. Consumers also seem to understand that products cost more in some areas than in others. I suspect most won't hold it against vendors in other markets.
The other factor is that they aren't selling to the "everyperson" in this venue. Chefs from upscale restaurants nearby will buy products from this market if it's competitive. There's also a lot of people with a lot of money working in those big buildings in DC. Average income is probably higher than most other farmers' market locations. It's no surprise that prices are higher given that fact alone. So, more money is added to the price beyond what might be seen at a "typical" market.
Finally, is the notion that some hold of local foods being only for the "elite" an accurate one? In a June 24, 2009 post, I wrote about the need for a balanced approach to local foods if it is going to become more mainstream. To become mainstream, it's got to be able to compete on price, quality, and convenience with WalMart and other major food retailers. That's a tough battle if local food sellers want to reach the masses. But is there any other way to make it happen?
Response Questions
1. How should we determine "fair" prices for direct marketers?
2. Does the uniqueness of the setting have value separate from the products being sold?
3. Are local foods for the elite/wealthy? If so, can that be changed?
I saw one exchange in which one individual blasted the prices at the WH FM, saying that they reinforced negative stereotypes of local foods being for the "elite." One example cited was $11/lb pork chops. (I saw little discussion of quality-related issues.) Based on this, I wonder what prices the critics would say is fair. Is the $2.49 pork chops advertised in my local grocery store's circular too little? How about double or triple that number? It seems to me that a fair price is whatever the farmer selling it can get for the product. Who among that group wouldn't love to get $11.00? One of the sources listed above indicates that little product was moving. If true, seems like the items were indeed overpriced. In a competitive market, as this one's in, consumers, not bloggers and reporters, get to decide what is overpriced and what isn't.
I also don't understand the notion of this one market giving all others a black eye. This one has something that all others don't have... proximity to the White House. The story embodied in that fact has value to some target consumers. In addition, there's only one opening day. Some customers will tell the story for years about how they bought ag products on the opening day of the White House farmers' market. What's the value of that story? We won't know until Day 2. But this market is unique and has received so much publicity that it seems obvious to me that vendors are going to try to capitalize on that fact. Consumers also seem to understand that products cost more in some areas than in others. I suspect most won't hold it against vendors in other markets.
The other factor is that they aren't selling to the "everyperson" in this venue. Chefs from upscale restaurants nearby will buy products from this market if it's competitive. There's also a lot of people with a lot of money working in those big buildings in DC. Average income is probably higher than most other farmers' market locations. It's no surprise that prices are higher given that fact alone. So, more money is added to the price beyond what might be seen at a "typical" market.
Finally, is the notion that some hold of local foods being only for the "elite" an accurate one? In a June 24, 2009 post, I wrote about the need for a balanced approach to local foods if it is going to become more mainstream. To become mainstream, it's got to be able to compete on price, quality, and convenience with WalMart and other major food retailers. That's a tough battle if local food sellers want to reach the masses. But is there any other way to make it happen?
Response Questions
1. How should we determine "fair" prices for direct marketers?
2. Does the uniqueness of the setting have value separate from the products being sold?
3. Are local foods for the elite/wealthy? If so, can that be changed?
Thursday, September 17, 2009
Some budget cuts can do more bad than good
In a recession, businesses of all types are fighting to stay afloat by reducing overhead costs, but what cuts are actually harming your business?
Many businesses reduce costs by cutting marketing and laying off employees. Is this the answer? The article "Basic Mistakes Retailers Make When Times are Tough" by Elizabeth Walker (seen on www.openforum.com) describes how a furniture store in Canada (The Brick) dealt with tough economic times.
To "save" money, The Brick severely reduced advertising and laid off hundreds of employees. Less customers visited the store and the ones that did stop in couldn't find an employee to ring up their purchase. Revenues dropped even lower until their new CEO, Bill Gregson, led the company in the right direction.
Gregson felt that very little of the company's problems were actually a result of the recession. He decided to hire back the employees, advertise more, and developed an agreement with the manufacturer to hold inventory instead of Brick warehouses to help prevent excess inventory sitting around. For the month of August, sales were up.
This is not to say that these practices will absolutely save you during a recession. As the author states, "We are saying that it's easy to 'cut off your nose in spite of your face' when you cut the very services that bring business in the door. Bottom line is: when the economy is bad is the time to increase your marketing and upgrade your service. Do so and you'll be way ahead when the good times are back."
Budget cuts article
Many businesses reduce costs by cutting marketing and laying off employees. Is this the answer? The article "Basic Mistakes Retailers Make When Times are Tough" by Elizabeth Walker (seen on www.openforum.com) describes how a furniture store in Canada (The Brick) dealt with tough economic times.
To "save" money, The Brick severely reduced advertising and laid off hundreds of employees. Less customers visited the store and the ones that did stop in couldn't find an employee to ring up their purchase. Revenues dropped even lower until their new CEO, Bill Gregson, led the company in the right direction.
Gregson felt that very little of the company's problems were actually a result of the recession. He decided to hire back the employees, advertise more, and developed an agreement with the manufacturer to hold inventory instead of Brick warehouses to help prevent excess inventory sitting around. For the month of August, sales were up.
This is not to say that these practices will absolutely save you during a recession. As the author states, "We are saying that it's easy to 'cut off your nose in spite of your face' when you cut the very services that bring business in the door. Bottom line is: when the economy is bad is the time to increase your marketing and upgrade your service. Do so and you'll be way ahead when the good times are back."
Budget cuts article
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