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Beef producers Jay and Tricia
McKay of Mindenmines, Mo., help promote their co-op's main product
Photo by Bob Cunningham |
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More and more, producers seeking better returns opt for alternative
marketing strategies. Before launching a potentially expensive,
ill-fated new enterprise, conduct market research to determine whether
your new idea might fly.
“Use market research to reduce the risk,” said Jenny
Warden, an independent marketing consultant in Virginia who has
worked with farmers. “Figuring out how many units you can
sell is 90 percent of launching a new product. The huge questions
in any new business are: ‘How many can I sell, at what price
and how fast?’ ”
Consider the following steps when conducting market research:
 Market
analysis. Take advantage of what others have learned. Contact
other producers who specialize in your product, publicly held
companies that post earnings statements and government agencies.
Search libraries for books, reports and journals. Contact agricultural
extension offices, and search on the Internet.
Be precise
about the question you want to answer. The narrower your question
(What cut of beef would sell best at a farmers market?), the more
efficiently your research can answer it.
Conduct
quantitative research, such as surveys, which will offer information
about projecting your sample responses to a larger population.
Surveys help you determine how many people will buy your product
and how much they will pay.
Conduct
qualitative research, such as focus groups and in-depth interviews.
In-depth discussions help you determine the underlying reasons
behind consumer choices, such as a preference for dried herb arrangements
around the winter holidays.
For detailed information about how to create a lender-ready business
plan, see Building a Sustainable Business, listed in “Resources”.
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