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.  

Mid-Atlantic Consumer Demand for Ethnic Produce is on the Rise

Why is demand increasing for ethnic produce in the mid-Atlantic?  U.S. Census data indicates New York City, Washington DC, and Philadelphia are among the top ten cities that are majority-minority in population, meaning ethnic minorities account for more than half of the population (Census 2010). U.S. Census data also shows that the mainstream population only increased by 9.7% from 2000 to 2010 as compared to 43% for Asians and 43% for Hispanics (Census 2000, 2010). With this increase in population, there certainly would be an increased demand for ethnic produce and therefore more economic opportunities for producers, wholesalers, and retailers who grow and sell these products.  

To address this increased demand for ethnic produce, researchers at Penn State, Rutgers, the University of Florida, and the University of Massachusetts along with industry members (including farmers, retailers, wholesalers, distributors, etc) gathered earlier this year to discuss research data and trends related to ethnic crops in the mid-Atlantic at the 2014 Ethnic Greens and Herbs Workshop.  One of the projects developed by the research team was the Worldcrops.org website.  The World Crops site provides information about vegetables and herbs that can be grown in the northeastern United States. The emphasis is on crops that are popular among ethnic groups living here and can be grown here.  The site is organized by country. 

Another helpful aspect of the site is the glossary which is available in English to Spanish and vice versa.  A user can easily find the English or Spanish name for a particular type of produce as well as the genus and species of more than 350 entries.  Example 1 shows that an avocado is called an “aguacate” (Spanish), “pagua” (Mexican), or “pahua” (Mexican) and the genus and species is Persea americana.

Example 1.  Screenshot of English to Spanish glossary on Worldcrops.org.

Visitors can also find ethnic crops based on the country of origin.  In the “Go to region” box on the main page, visitors can click on a region and then select a country.  In example 2, Brazil is shown.  The language spoken is Portuguese and some of the main crops used in this country are listed including cilantro, maxixe, and okra. 

Example 2.  Screenshot of "Go to region" listing for Brazil on Worldcrops.org.

If you are an ag entrepreneur and are interested in exploring ethnic crop opportunities, it's imperative that you DO YOUR RESEARCH as you would with trying any new opportunity for your business.  Good luck!

Developing a Roadside Farm Market

by Michelle Kowalewski, Extension Educator, Susquehanna Co.

Thinking of growing and selling your own product?  A roadside farm market can be a great outlet to sell products directly to consumers.  Retailing directly to consumers can be a viable alternative marketing strategy and means of increasing profits for any small-scale ventures.  However, marketing through a roadside market needs careful planning and thorough examination of a wide range of topics.

First, as with any business venture, it's important to research! Explore potential competition, customers, and products.  What will make your roadside market different from another and what will entice people to stop and buy your products?  The increasing trend to buy local products is certainly in your favor if you can make a great first impression and encourage customers to stop again.  What products will you grow to sell at your market?  What is your expertise and how does it match up with what your target customers want?  Remember, quality is important to consumers and will be one of the main reasons that they continue to shop at your stand.  Develop a plan, including production schedule of what items might be in season, when, and for how long.  An option if you cannot produce all the items you wish to sell, is to consider supplementing your market with offerings from other local growers.

It's always important to check on regulations.  There are many regulations to operating a small business and a roadside stand is no exception.  Check with local municipalities or officials to check on zoning in your area or township.  Location is a key consideration for a roadside market.  Spend time observing traffic flows in the vicinity of your potential site.  And remember, signage is important.  No matter how nice your market looks, people must be able to find it, so use directional signs to help customers locate your business.  Signs must be eye-catching and easy to read from a distance.  It's less important to list all the products available on the sign than to direct customers to the market.  When people arrive at your market it's important for parking to be easily accessible and safe.  See this past blog on signage for more.

Now that you have customers to your market, remember to keep your displays attractive.  Shoppers like to see displays of fresh vegetables in a high quality, clean environment.  Remember, a positive first impression will keep shoppers coming back for the next visit!  Roadside markets are often selling an image and experience as well as physical products.  Help your customers think about traditions and warm thoughts - old crates, tools, scales, or simply photos can help create a "moment" for the shopper that makes them feel connected.  It's all about selling your story and your products!

A simple, yet attractive, display on something like this old time sleigh,
can trigger warm, nostalgic feelings in customers, bringing them back.

Customer service is important - be sure to listen to your customers as well as educate them about the products that you are producing.  Be friendly and courteous and always handle complaints in a professional manner.

There are a lot of other key factors to consider when developing a roadside market:

• Size - are you building a new structure or remodeling an existing structure? Do you ever envision expanding?
• How will you price your products?  
• Do you need to consider advertising?  
• How will you staff your market?  
• What type of records should you keep?  

To learn more about developing a roadside market, read Penn State Extension's Ag Alternatives fact sheet on Developing a Roadside Farm Market.

Pricing Power for Direct Marketers

by John Berry, Extension Educator, Lehigh Co.

Agricultural marketing activities account for over 17% of the nation's gross national product.  Additionally, roughly eighty cents of every consumer food dollar goes to cover marketing expenses.  Clearly, performing some marketing chores are a possible source of increased revenue for food producers.

Is $1.00/lb the "right" price?  Well, it depends...

However, when we take on the chores of marketing many challenges must be expected. Academics tell us marketing consists of product, promotions, placement, and pricing.  One aspect of marketing that generates many questions is the function of pricing.  "What should I be pricing my melons at?" is heard on many visits to local farm markets.  This leads me to suggest that prices and pricing must be a well thought through piece of your overall marketing plan.

I firmly believe cost of production is the basis of calculating price.  If our price does not at least cover our cost of production we are not even trying to break even.  My mantra is "I can sit on the porch all day and be broke. I don't need to work and be broke."  As an integral part of the marketing plan, price must be flexible enough to meet the competition and adjustable to changing situations.  Having a clear idea of your marketing objectives and the target market for your products makes selection of a "proper price" easier.

Is the Point Profit?

As we get comfortable with setting and adjusting our retail prices, we can start to consider if we are trying to maximize total profits, or the profit per unit.  Are you willing to take a lower price if you could sell more units?  The following table gives you a picture of this "game."  The first row states that if your margin is 10% and you reduce your price 5%, it will take an increased sales volume of 100% to meet your planned revenue goals.

Current				Required %
% Profit		% Price		Increase in
Margin		Reduction		Sales Volume
10		5		100
15		5		50
15		10		200
20		5		33
20		10		100
25		5		25
25		10		67

An effective pricing strategy reflects four factors:

• Your cost for each product.  Retail price needs to cover the cost of the good itself and ideally include a profit in addition.
• Possible sales response to price change.  Many consumers are aware of the going market price.  We do need to understand how our most significant buyers might respond to price adjustments.
• Costs and prices of the competition.  If my cost of production and thus price, is higher than my real competition's selling price; why would customers buy from me? This is where we start to talk about "value" and not price.
• Probable responses from the competition to what you do.  Many successful businesses pay attention to competition.  How might the alternative sources of your products respond to your prices and any price adjustments?

Proper pricing is essential to long-run business success, and pricing is as much a marketing concern as an accounting one.  Additionally, pricing strategies can be a measure of management effectiveness.  Ultimately, as we develop effective pricing strategies we harness the power of retail farm marketing.  We are able to more easily reach our enterprises' marketing and financial goals.

How Do We Meet Consumer Food Expectations and Demands?

by John Berry, Extension Educator, Lehigh County

As I explore conditions with which "my" direct-to-consumer farm marketer clients manage their enterprises, the most frequently noted comments center on understanding the changing and apparently flexible nature of consumer expectations.  Sometimes, we expect our buyer to think and act similar to ourselves. Often, they do not.

Looking at recent research on consumer purchasing behavior we came across the below summary. This USDA summary compares how consumer buying behavior compares to scientific food use recommendations. The article titled Americans' Food Choices at Home and Away: How Do They Compare With Recommendations? offers the following highlights:

• Grocery purchase data reveal that consumers underspend on fruits, vegetables, and whole grains and overspend on refined grains, fats, and sugars/sweets, compared with USDA food plan recommendations, a pattern that showed little change from 1998 to 2006.
• Food consumption data point to an even bigger challenge to improving diet quality: away-from-home foods now account for one-third of daily caloric intake, and they are not as healthful as at-home foods.
• New government and private industry initiatives to make food labels and point-of-purchase information ore relevant, understandable, and motivating may help consumers choose more healthful foods.

For us direct-to-consumer farm marketers - this study (and others) makes me wonder how to best promote the safe nutritious foods available at our markets. The challenge may be the "more relevant, understandable, and motivating" concept made in the 3rd bullet point above.  Let's look at how we might enhance customer communications efforts to reassure and reach these vital business partners.

1. Relevance - consumers have more than enough places to receive product knowledge and products. Our main task is to stay up-to-date with what our current (and potential) customers' desire and then communicating product benefits in a casual, non-intrusive manner.
2. Understandable - we can turn to the dictionary here for a straight-forward look at how to approach shaping our customer buying habits. The Webster's dictionary offers the following when describing "understandable": accessible, coherent, graspable, legible, decipherable; plain, simple, fluent, well-spoken. All these descriptive words suggest the use of words, concepts and calls to action that are at the reading and comprehension level appropriate for our expected shoppers. There may be little need for industry jargon and fancy terms.
3. Motivating - consumers have a wide range of factors affecting what drives their food purchasing habits. It can be a continuous struggle between what I believe is significant and what I believe is within my means. Understanding and motivating the purchasing activity within your market can be quite powerful.

The challenges of effective retail farm marketing atop all the other business management challenges are often immense. However, they are not insurmountable. When we focus some of our time on a better understanding of the constantly evolving state inside our customers' heads we are better prepared to influence their purchasing behaviors. As we reassure and motivate our buyers we stand to have a more positive experience ourselves.

Real-Time Monitoring of Your Farm Equipment

Farmers rely on their equipment everyday to run their farms.  It's imperative to have good data on how each piece of equipment is used and how much it costs to operate in order to optimize machinery to it's fullest potential (read more about machinery optimization in my past post).  

To collect data in real-time, AgCo has developed AgCommand, a device that collects data about a specific piece of equipment and delivers the information via a cellular modem and GPS in the device to the AgCommand website.  The website gives reports that track engine hours, fuel consumption, operator efficiency, equipment health info, and field-specific machine information. Reports can be used to monitor and control operating costs and for planning, billing, and maintenance scheduling.  This kind of information would be very helpful in making decisions on how to best use your machinery.

Figure 1.  Example map of a farmer's land and an AgCommand report on the working time of a piece of equipment.

Another great feature of the AgCommand system is geofencing.  As Farm Industry News describes it, geofencing "allows the user to build a virtual fence around equipment using GPS coordinates. So when equipment leaves the fenced-in area, the telematics system sends a text message or e-mail alert. This can help avert theft, or simply let you know that your planter, sprayer, or combine has finished work in a field and is moving on to the next. Similarly, telematics curfews can alert you when a machine is started after working hours."  

As a farm business owner, have you ever heard of or used the AgCommand system or something similar?  Are you willing to try this new technology?  Of all of the reports and information generated by the system, what is of greatest importance to you?  Can you think of any other data not mentioned here that you would like a system like this to collect?  Are you ready to embrace this new technology?

Finding Local Foods on Your Next Road Trip

As you're driving down the highway on your next road trip, take a look at the signs advertising what food options are available at the next exit.  Almost all of the food options are fast food.  Obviously, fast food is convenient and predictable, but what if you want to eat something different?

SHFT, a multi-media platform company, recently released a smart phone app called Food Tripping to help consumers locate local foods (watch the video below for a brief summary).


Food Tripping uses GPS to locate local restaurants, juice bars, farmers’ markets, microbreweries, etc.  Users can search by location, name, popularity, and category (see Image 1).  Each listing gives the address, phone number, category, website, directions, and "sharing" capabilities (via email, Facebook, and Twitter).  You can also view a list of past businesses you've visited when you "check-in" or "add to favorites".  Think of it as Foursquare just for food.

Image 1.  Food Tripping app displaying farmers' markets in the St. Paul, MN area.  Photo from Supermarketguru.com

As an ag business owner, how will this new app help you?  This sounds like another great way to bring new customers to your business without any cost to you.  The app is free (available on iPhone and Android devices) and anyone can make a free listing for a business.  All you need to do is click the "suggest" button and fill out a very short form with your business's info.  Once approved, your business will be listed in your area.  Why not take 5 minutes out of your day to create a listing and get some free advertising?

As a consumer, would you use an app like this to visit a food business in a town you're unfamiliar with?  As an ag business owner, have you listed your business on other apps (like Foursquare)?  Has your listing attracted new customers?

From Battlefield to Farmland

Once military veterans retire from serving our country, they may find it hard to find a job that fits their skill set.  An organization called The Farmer Veteran Coalition (FVC) is working to help join unemployed veterans with farming, an industry that is in desperate need of new people entering the field (pardon the pun!).  As those in the farming industry know, starting to farm is not easy.  The costs of land, time, equipment, and labor as well as the shortage of land are all barriers to entering the industry.

This matchup of veteran and farmer seems to be a good fit thinks Tia Christopher, the chief of staff of FVC.  She says, "Even in these rough economic times, the agriculture field offers many viable career options. Job opportunities include everything from shipping and managing to vegetable farms and vineyards. Along with the economic opportunities, working with the land and animals has proven to help veterans heal from the trauma of war. I like to think that after living through some pretty traumatic experiences it's cathartic to watch things grow."

FVC is helping veterans to start farming in rural as well as urban farm settings.  Currently, the organization has a network of 600+ veterans in 47 states.  To help veterans establish a farm, the FVC has a grant program that has given over $200,000.

Christopher also says, “The future of FVC is very exciting. This month we launched our used farm equipment exchange and donation program (FEED), which will match unused farm equipment and implements with deserving Farmer Veterans in Iowa and California (our pilot states). We are also working on FVC chapters across the country. Lastly – two of our main focuses going forward are working with women veterans in agriculture and in financial literacy for beginning Farmer Veterans."

To read more about the FVC program, please see the article "The Farmer Veteran Coalition".  

As a farmer, do you think this program will help bring new people to the farming industry?  What kind of information is critical for the FVC to teach veterans before starting a farm?  Would you be interested in being a mentor for this program?

Convenience is King for Female Grocery Shoppers

The National Grocer’s Association and Supermarket Guru recently conducted a survey (which is discussed in the article "How Women Shop") concerning where and how consumers shop.  Not surprisingly, females are the main shoppers (75.7%) and their biggest concerns when grocery shopping are "accurate shelf tags (74.6%), clean and neat surroundings (83.7%), and a safe environment outside the store (61.2%)."

Woman and her son grocery shopping.

Neat, easy-to-read shelf tags.

This information is very telling for retailers.  Are your shelf tags neat, easy-to-read, and accurate?  Is the inside as well as the outside of the store neat and tidy?  Is the parking lot well-lit and safe for your customers?  Your answers to these questions should all be "YES"!  If not, resolve these issues immediately and observe how customers react.  







Another important issue for survey respondents was the quality of their perishable items.  Items that were seen as "very important":

High quality, well-stocked produce.

• high quality produce (90%)
• high quality meats (71.4%)
• high quality seafood (45.5%)
• high quality bakery (32.4%)

Also in regard to product quality, 82.7% of survey respondents wanted ample time in product dating to extend shelf life of their purchases.

As a food retailer, how do these survey results compare to your own observations in your store?  Are you surprised by any of the results?  What changes will you make in your store to better suit these concerns?

As a consumer, are your shopping needs similar to the survey results?  What else can retailers do to attract you?

Stay tuned for another post in the near future with more results from this survey!

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?

Learning a Little Bit About the PA MarketMaker Partners (part 2)

Continuing on in this series on the MarketMaker partners, below are 2 more agencies in the MarketMaker network.

Pennsylvania Winery Association (http://www.pennsylvaniawine.com/)  
The PA Winery Association is a non-profit trade association organized to:

• assist in providing markets for our members
• provide assistance in developing merchandising materials, publicity, promotion & marketing effort to increase Pennsylvania wine sales
• provide forums for the exchange of information & experience among members
• sponsor & support legislation & regulations that will benefit PA's wine industry and to oppose those which will be detrimental.

With nearly 160 wineries located in the Commonwealth, the Pennsylvania wine industry has experienced vibrant growth for more than a decade. The opportunities for commerce have also expanded; allowing wine sales by the glass, 100 off-site special permits for sales, and recently, legislation was passed to allow wineries to apply for an annual farm market permit. With the growing popularity of local foods, the amount of markets has expanded across Pennsylvania. Today, wineries are able to register to provide samples and sell wine by the bottle at farm markets. Pennsylvania wineries are excited about their opportunities to participate in farm markets and to be featured alongside other local foods. 

Farm to City (farmtocity.org)   
Farm to City is a Philadelphia- based program whose goal is to unite communities, families, and farmers year-round through locally grown food.   In 2012, Farm to City will operate 16 farmers' markets including 12 established markets, 2 existing markets in new locations, and two new markets. In addition to a wide variety of fruits and vegetables, many of the markets feature meat, poultry, eggs, and dairy products from pastured animals.
Farm to City also offers use of its website and administrative web tools to any organization that would like to run a local food buying club or CSA in its own community. Farm to City is committed to the promotion and proliferation of viable, self-sustaining local food networks across the country. The affiliate program is designed to help organizations start and manage a local buying club or CSA.

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