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Marketing local products:
Short and long distribution channels

[ Summary ]

Section I
Marketing local products via short distribution channels

 

Chapter 5
Placing products on the market

 


Placing products on the market requires the inclusion of risk- limiting phases such as market surveys and tests, ascertaining the value of supply from the area and professionally analysing the match between supply and demand.

 


5.1 (Formal) market surveys and test marketing

 

A formal preliminary study prior to launching a project to sell via short distribution channels is not always carried out because selling in this way is easy. Very often, this stage is skipped and the test-marketing phase is embarked upon without first carrying out a formal study.

Test marketing is a good way to verify the feasibility of an idea in cases where its implementation does not require major investment, at least in the initial stages. If the test proves conclusive, the project is pursued. For example, in cases where producers plan to enter a new market, the most effective approach is still to test several markets. Test marketing reveals whether the group’s products are of interest to customers in the market, and even identifies specific customers, if producers are able to organise themselves to carry out the work, etc. Should the test prove negative, the merchandise can be sold in another way.

However, whenever implementing an idea calls for major investment - such as buying or renovating a shop -, a preliminary project study and a formal approach are essential in order to limit the financial risk.

It is advisable at this stage to solicit the help of a consultant who will not only provide methodological skills, but will also take an outsider’s, and hence more objective, view of the project. Project promoters, who are of course highly motivated, tend to underestimate obstacles and to overestimate their ability to overcome them. Furthermore, with their experience of other ventures, consultants are able to effectively guide producers through their projects [1].

 


[1] The LEADER guide “Evaluating a
territory’s tourist potential” Brussels, 1997,
contains a checklist for selecting and
hiring a consultant.



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