Marketing local products:
Short and long distribution channels
[ Summary ]
Marketing local products via short distribution channels
Placing products on the market
5.3 Analysing supply and demand
Soliciting a professional outsiderís view
It is desirable to carry out a formal supply analysis and to decide
what separates the local product from its rivals. A person from
outside the producer group or the area is sometimes in a better
position to pinpoint such distinctiveness. It is no coincidence that
numerous initiatives for marketing local products in urban markets
have stemmed from people who, though originally from the area, have
moved away to the city. Because of their origins, they are familiar
with local products and their characteristics, and because of their
time spent in the city or abroad, they are also familiar with the
requirements of potential customers.
In parallel with any market survey, it can be useful, and indeed
even vital, to test the product in fairs and local markets, and
through direct farm selling. This does not require any investment
and yields highly conclusive results in terms of motivation and
feasibility. At fairs the product can be test-marketed in a real-
life situation, making it possible to discover how customers
perceive it and ascertain the abilities of the producerís
It is recommended to involve producers in the market survey, by
making them carry out some of the surveys themselves and getting
them to participate in the interpretation exercise. This reduces
costs and puts producers in closer touch with customers, allowing
them to find out customer expectations and to meet customers when
they interview them for a survey.
A market survey includes the three variables for placing products on
the market: catchment area, customers and competition.
This is the geographical area within which the company manager,
farmer or group proposing the project can expect to attract
customers. It is a vital element. Striving to promote a remote point
of sale will not produce positive results. The answer is therefore
to bring the service to the customer.
This involves ascertaining:
- the density of the resident population and the influx of
visitors (tourists, second-home owners, etc.);
- whether the population is urban or rural;
- the means of transport for reaching the shop (by car or bus,
taking into account any obstacles such as a river, motorway, etc.);
- logistical infrastructure (road, etc.).
The question that must be asked is: will the population in the
catchment area be sufficient to provide a living for the farmer,
craft worker or project?
In France the rule of thumb is that more than 25,000 inhabitants
within a 25 km radius of a point of sale means that the study can go
ahead, whereas if there are only between 5,000 and 10,000
inhabitants, profitability will be more of a problem.
This requires five types of information:
- Socio-professional category, buying and consumer habits. How
much of their budget do consumers spend on the type of products we
are interested in? Where and how do they buy products (fresh or
packaged, etc.)? What is their current volume of spending (for the
average household shopping-basket)?
This will provide some of the elements for determining what
brand image the point of sale should be given and what the pricing
policy should be, as well as whether to offer fresh or packaged
- Expectations of the product: what do consumers want? What do
they buy at present? What do they find lacking? This allows
producers to choose between two types of product: ordinary consumer
products, which must be affordable to all socio-professional
categories, or festive fare and special products, which can be more
- Where do consumers shop?
On this basis, it is possible to work out a commercial
strategy and distribution channels (markets, shops, etc.)
- What type of service do consumers want?
Based on the answers to these questions, extra services can be
offered to customers when they buy the product (payment in one or
two instalments, delivery). The idea is to supply the product whilst
meeting customer demand for services and not the reverse (it is
essential to ensure that the commercial strategy is not built around
a service rather than the product itself).
- How can you communicate with consumers?
Based on this knowledge, a communication strategy can be
worked out (word of mouth, mail shots, leaflets, promotional sales
in large shopping centres, local radio).
- Who are the competitors?
- What do they do
- what products do they make?
- Where do they sell?
- How do they sell
- Do they have an aggressive sales technique or not, including
From this information, it is possible to work out if there is
strong or weak competition and hence whether the sales method should
be aggressive or not. The conclusion will determine positioning. If
competition is strong, the marketing strategy can be expected to
reach 0.1 to 0.5% of customers in the catchment area. If competition
is weak, it can be expected to reach between 0.3% and 2%.