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Marketing local products:
Short and long distribution channels

[ Summary ]

Section I
Marketing local products via short distribution channels

 

Chapter 4
The different forms of marketing

 


 


4.3 Specialised points of sale

 

A group of farmers, craft workers or businesses, or even an individual trader, decides to set up a point of sale for their own products and/or those of the area. A prerequisite for the shop’s profitability is a high population density in the catchment area. The required investment is considerable - in the order of 10,000 to 50,000 euros or more. The range of products must also be broad enough to provide a full “household shopping basket”, i.e. everything the consumer needs to prepare a meal.


Installation requirements

  • The point of sale can be set up either in the country (beside a road that is busy every day or at popular tourist sites, provided that the products are suitable for tourists), or else in towns (in a shopping street, a food-shopping area, a sufficiently busy shopping centre, etc.).

  • Depending on the target customers, the range of products on offer must either be ordinary consumer products (in the case of food, this must include everything needed to make a meal) or special products (festive fare, gifts or souvenirs).

  • Such shops require a lot of technical and commercial innovation and must be highly dynamic (promotional activities, tasting sessions, etc.).


Implementation

  • A car park, sign, advertising panels and road signs must be provided.

  • The shop should have a surface area of at least 50 m2 in order to comply with the industry standard of 2/3 circulation space and 1/3 display space.

  • The display space should include a selling area (shelving, podium, etc.), a sales and advisory area, a cash register, as well as a rest and information area.

  • The furnishings should respect the rules of merchandising: shelves should look attractive, customer service items should be provided (shopping baskets, chairs, tables, mirrors), the lighting should show off the products to best advantage, everything should be clean and the shop decor should be changed every season.


Customer requirements

  • Feel-good factor (convenience, etc.) because buying from a shop like this is for pleasure rather than for necessity.
  • A satisfactory quality/price ratio.
  • Customer services (payment facilities and advice).
  • Assurances as to the quality, origin and authenticity of the products.


Selling style

  • At this type of point of sale, the sales personnel should be highly competent and efficient. Furthermore, any new shop selling rural products (farmers or craft workers) is doomed to failure if there is no farmer or a craft worker at hand to guarantee the authenticity of the product and to provide after-sales service. The sales personnel should be well trained, familiar with the products and capable of explaining them to customers.

  • Commercial activities (products on promotion, promotional activities and tasting sessions) boost sales.

  • Selling from specialised shops calls for high profit margins (30% to 40%) in order to ensure the shop’s viability. One pitfall to be avoided is selling products cheaply in order to keep the selling price competitive. This leads farmers and craft workers to boost their productivity, with the result that the quality and authenticity of the products soon falls off and many customers go elsewhere.


Farmers’ collective point of sale

The principle of this form of marketing is for farmers to group together to create and jointly manage a shop selling local products. Setting up an itinerant van, a shop in a market town or a suburban or urban area, or a proper little supermarket alongside a busy road, are all possible options. This is an approach frequently adopted by farmers who have developed other forms of direct selling in the past, such as sales direct from the farm or at itinerant markets. Another option is to set up a cooperative in which the members have experience of jointly managing projects. How relations are organised within the group and the rules established to manage the cooperative project are of paramount importance. The support of external technical experts, recognised by the group, is a valuable aid. It is estimated [1] that each farmer in the cooperative should sell at least 10% of his production through the cooperative for him to derive benefit from it, in view of the personal investment that such a venture requires. The consumer potential represented by this type of shop warrants the investment (the average annual turnover of the shops participating in the AVEC cooperative, in the Rhône-Alpes region [France], is 300,000 euros). After a few years of development, some farms end up selling their entire production through the collective shop. A variant of the collective shop in towns is a collective van that travels around to sell to consumers, particularly in rural areas.

 


[1] In the experience of AVEC, a French
association of farmers selling direct from the farm.



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European
Commission

Agriculture
Directorate-General