Overstory #62 - Marketing Principles
Economic viability is an important aspect of agroforestry development. Whether selling timber, fruit, tree seed, or other products, agroforesters will benefit from understanding some principles of marketing. In this edition of the Overstory guest author Richard Finlay-Jones provides a brief introduction to professional marketing.
The seven secrets of successful selling can be summarized as follows:
- Know your customer
- Know your product
- Know the process of production, manufacture and distribution
- Know your costs
- Know your competitive edge
- Know the communication process
- Know yourself
Simply put, the process of successful marketing stems from sound knowledge, good products, innovative distribution channels and successful communication processes.
Very often potential customers may be grouped together to form market sectors or segments. It is important for the marketer to be able to identify how different sectors of the market vary from each other, and how the different requirements of each sector may be targeted using specific selling techniques.
1. Know Your Customer
The customer may be an end user, a processor or a manufacturer. The marketer must have an understanding of the requirements of each end user, processor, and manufacturer and in terms of:
- product quality specifications
- product volume
- product appearance and finish
- product supply consistency
Understanding the needs of the customer requires the marketer to develop empathy and trust for the customers business and/or personal requirements. This has been recently termed, "relationship marketing." A marketer with a similar product and an established relationship with the customer has a distinct competitive advantage.
2. Know Your Product
In order to successfully market a product or service, the seller must be able to define the benefits of the products over those of the opposition's products. Benefits are different to advantages in that benefits relate to the specific needs of the individual customer, rather than the strengths of one product over another. The seller should also have a comprehensive knowledge of the disadvantages of their products in particular processing or utilisation situations (for example, the use of untreated pine products in exposed situations as opposed to treated products). The better the marketer knows and understands the product and its idiosyncrasies, the greater the level of service afforded to the customer, and the more trust created between the parties.
3. Know The Process
Getting the product to the customer can be one of the more trying exercises for the marketer. The marketer of farm forestry products should possess some knowledge of the species, site, silvicultural processes, harvesting techniques, sawing, transportation and distribution required for the product to get into the hands of the customer. The more information that the marketer has to assist the customer in the decision making process, the greater the chance of the sale.
*** Remember: Always underpromise and overdeliver!
4. Know Your Costs
Without understanding the fixed and variable costs of production, it is difficult to successfully plan for profitability and sustainability of production. Consequently the marketer must place a sufficient margin on the product to cover the costs of all processes and labour, whilst remaining competitive in the marketplace. Understanding the costs and desired profitability level will also allow some flexibility in the marketplace, should a situation of price warring occur.
5. Know Your Competitive Edge
The greater the understanding of the marketing chain and the product, the more likely the relative strengths may be ascertained. The strengths or competitive advantages commonly relate to price, product, positioning, perception and process. In the traditionally conservative timber industry, competitive strengths are achieved through proximity to the resource, ease of har-vesting and processing and proximity to marketplace.
*** Note: Competing on price alone destroys the market's perception of quality!
6. Know the Communication Process
Some customers enjoy regular contact from marketers, whereas other customers prefer to be in control of the event. It is important for the marketer to understand the preferences of the customer, to know how often the customer prefers to receive information and through which media (see 1.). For example, using current technology, it is possible to sell products using photographs and text on a website. However, this may only attract business from a certain sector of the market.
7. Know Yourself
It is extremely difficult to sell products and services that one doesn't believe in or doesn't understand. It is also difficult to sell products if one does not believe in oneself! To be a successful marketer, appraise your own strengths and weak-nesses in order to present the selling opportunity to your customer in a way that works for you. This will usually occur in a situation where all parties are comfortable and relaxed, able to understand and relate to each other's situations and requirements. It's fun, enjoy it.
The seven secrets to successful marketing are no secret at all! Common sense and courtesy, with a respectful attitude to customers, the product and the processes will afford you the opportunity to market your products and services. Securing the order requires the trust and respect of your potential customers through honesty and integrity.
Kotler, P. 1991. Marketing Management Analysis, Planning Implementation and Control. Prentice-Hall International
Romano, F. 1995. Sold! On Life. Turning Point Corporation. National Library of Australia.
This article is adapted from Agroforestry News, Volume 8, Issue 4 with the kind permission of the author and publisher. Agroforestry News features practical and timely information for farm foresters growing timber with many examples from Australia. Address: Agroforestry News Editor, NRE Port Phillip Region, Locked Bag 3000, Box Hill, 3128 Victoria, Australia; Fax: +61-3-9296-4722; E-mail contact: email@example.com.
About the Author
Richard Finlay-Jones is Manager of Forests and Land Management GHG Management Pty Ltd in Australia. Richard has a degree in Agricultural Science, a Diploma in Education, and a Master of Business Administration. Prior to managing the Farm Forestry Project, Richard gained 10 years experience in sales and marketing of agricultural and educational products and services. Richard can be contacted at: Manager, Forests and Land Management GHG Management Pty Ltd E-mail: Tel: +61 414-555-864 (Australia).
Related Editions to The Overstory
- The Overstory #55--Nontimber Forest Products Part II: NTFP Enterprises
- The Overstory #48--Farm Forestry
- The Overstory #13--Value-Added Products