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Marketing local products:
Short and long distribution channels

[ Summary ]

Section II
Collectively marketing local
products via long distribution channels

 

Chapter 2
Conditions for success

 


Marketing initiatives via long distribution channels involving small businesses are almost always collective in nature. Furthermore, the participation of traditional producers and/or farms in developing a product range or “shopping basket” of food products is a strategic objective for many local development groups. However, the implications of participating in this type of project are numerous and go beyond the strictly commercial aspect of the operation. The risk factors and threat of failure loom large right from the outset.

 

Preliminary requirements


The preliminary requirements for implementing a collective business development initiative generally come under four main headings:

  • products, which have to be of “real quality” and common characteristics like provenance, image and positioning;

  • producers, who must become fully involved, which means sharing goals, being willing to take an active part and accepting and applying mutually-agreed rules;

  • the promoter group (producers, experts, etc.) responsible for managing the initiative: it must possess resources and skills specific to the business sector (i.e. direct experience or recourse to outside expertise);

  • collective motivation: the working environment which encourages people to get involved in the initiative and creates the momentum and a climate of mutual trust.

 


2.1 Products: “real quality” is not subjective

 

In the area of adding value to products, reference is often made to the concept of quality, but this is not always appropriate. In a concern for clarity, our basis is the commonly accepted International Standardisation Organisation (ISO) definition of quality. ISO Standard 8402 states that: “quality is the set of properties and characteristics of a product or service that enable it to respond to expressed or explicit needs of consumers”. So, according to this definition, of the myriad product characteristics that can be evaluated, only the criteria that satisfy the requirements of the user (customer, consumer, etc.) count in determining quality.


Characteristics of quality [1]

There are several models for classifying the qualitative characteristics (or prerequisites) of food products. Without claiming to be exhaustive, the pragmatic quality approach in small local food products should include four major elements:

  • hygiene standards;
  • gustatory characteristics;
  • service characteristics;
  • image characteristics.

The promulgation of numerous Community provisions over recent years has led to significant changes in national regulatory frameworks in major prevention sectors, including food hygiene. The most important innovation to be introduced by these directives relates to the production, as well as the role and responsibilities attributed to the producer in the general system of controls. In a number of countries, farms and small traditional food businesses have experienced, and still do experience, great difficulties in adapting. Such difficulties are due chiefly to a lack of organisation and technical solutions suited to a small-scale business.

Compliance with European hygiene standards does, however, call for one essential prerequisite for entering long distribution channels: rigorous work, which, in the case of many small businesses in European Union countries, does not necessarily follow.

In Ireland, thanks to the quality and the innovative nature of its product, Fastnet Mussels Ltd. managed to turn exporting into its principal marketing channel (95% of sales), but in order to develop an automatic system of hygiene control the company had to invest heavily.

The producers of Seine-et-Marne (France) took the same approach, by creating an efficient service for marketing their farmhouse products to leading mass retailers. They too consider compliance with European standards for processing units to be one of the seven elements that have determined the credibility of their marketing service in the eyes of purchase centres.

The gustatory characteristics are those that respond to the hedonist expectations of consumers (the “pleasure of eating”). Over recent years, the methods for identifying such characteristics have altered considerably. In a business development rationale, we do not so much call on rigorous and sophisticated analytical techniques, but rather on paying constant and methodical attention to a number of aspects that are often in danger of being overlooked. Activities such as defining and verifying the impact of the product’s principle defects, or periodically comparing the product with the products of direct local competitors, are initiatives that do not call for special resources or techniques (except perhaps diligence and hard work) but which nevertheless provide important information. It is absolutely essential for a product that is presented as being typical, made by traditional methods or “from the farm”, to be of irreproachable gustatory quality, and the best test of this is without doubt the comparative local test (a comparison with the “best local products”).

The characteristics of service and image are all elements that encourage consumption (storage, ease of use, information, etc.) and that meet the consumer’s expectations of psychological gratification. Here, the requirements of the customer (e.g. importers or mass retailers) and the final consumer almost always differ from the requirements of local markets. In order to access these remote markets, it is usually necessary to modify the initial product. In most cases, the modifications relate to packaging and storage, presentation of the portions or size of the product, or labelling and presentation. Nevertheless, a suitable study to define the objectives must be carried out prior to modifying certain product characteristics.

Fastnet Mussels worked extensively with the University of Cork in the research and development field. This enabled it to develop a technique (called “FIS”) for cleaning mussels without opening their shells and then freezing them in their shells, which extends their life span to 12 months whilst preserving the full gustatory quality of the product (which is impossible when mussels are frozen outside of their shells). This innovation in the service characteristics was a decisive factor in allowing the company to access export marketing channels.

The presentation is sometimes the only vehicle for communicating the product’s identity. According to this rationale, it is essential to define the precise content and objectives of the message that one wishes to convey. Although the packaging is meant to portray a traditionally crafted image of the product, it must also reassure consumers and convey to them a professional image. Naturally, its price has to be adapted accordingly. It would be a serious error, for instance, to place too much emphasis on the image of quality and of gastronomic speciality to the detriment of cheap and simple packaging, when the aim is to sell through hypermarkets.

The Valle del Jerte cooperatives have developed 20 different types of packaging for fresh cherries. Each type of packaging responds to the specific requirements of a particular clientele (e.g. a packaging that can be recycled for the German market and packaging emphasising the quality of the cherries for the French market).

With growing frequency, customers are also demanding specific guarantees as to the origin of the raw materials. This criterion of “traceability” has become a kind of watchword in the market. It represents an indisputable safety factor and today forms an integral part of the image of local products marketed via long distribution channels.

 


2.2 Producers: the option of jointly
conducting initiatives on a solid foundation

 

One of the greatest threats hanging over this type of collective initiative during the gestation period is the poor motivation of the partners involved. Although it is actually quite easy to secure a high participation rate, many of the partners are “not very convinced” and take an attitude of the “we may as well give it a try since we’ve got nothing to lose” variety. This attitude to membership is almost always more a disrupting factor than an advantage. Moreover, seeking to involve as many local producers as possible (to justify the use of public funding, for example), often leads to misunderstanding, whereas a small but united group of promoters would evidently have a greater chance of succeeding. From an “ethical” standpoint, what matters most is not so much the number of participants, but the seriousness and transparency of the terms of participation.

The Agronatura cooperative, which based its commercial strategy on the quality of its processed raw materials (medicinal herbs) and on planning its production with customers, attributes fundamental importance to the motivation of its new members. Before being admitted, new members are put through an evaluation/awareness programme, which includes a series of meetings spread over several months. This operation, which borrowed its name from the special terminology of biodynamic farming, has been termed “dynamising” new partners.

 


2.3 The promoter group: professionalism
is more than just an option

 

Commercial initiatives cannot be measured in terms of sales alone. According to this rationale, the availability of specific commercial skills is a decisive factor. Just as many management and marketing skills are required to define and carry out a development plan in a small traditional business as in a large industrial enterprise.

Due to their strategic importance, business decisions and responsibilities should not be delegated to outsiders. However, during the start-up phase at least, it is almost always essential to call in a professional expert.

The Mission Agro-Alimentaire Pyrenées (France) is responsible for providing specialised technical support to local businesses during the definition and implementation phase of their development programmes.

The producers of Seine-et-Marne (France) entrusted the strategic planning and implementation of their commercial initiative to a sales director with 20 years of experience working in the sector of organised mass marketing. With practically no specific experience at the outset and no logistical resources at all, they managed in a short time to sell successfully to leading French hypermarket chains, thanks to their investment in professionalism.

 


2.4 Collective motivation

 

The energy and charisma of promoters are decisive in overcoming the inevitable teething troubles and zealous individualism of small producers.

For many commercial initiatives, the creation of a climate of dynamism and mutual trust is not only the sole asset they have at the beginning, but also a precondition for the successful outcome of the project.

 


[1] See technical data sheet no. 1:
"Health guarantees in the agribusiness sector -
a brief overview of the latest Community
regulations and self-regulation".



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Agriculture
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