“Marketing is key to building sustainable profits in the fresh produce business” Interview with Dr. Manuel Madrid published by Syngenta Seeds - Tomatoes Today – December 2011
MARKETING IN THE FRESH FRUIT AND VEGETABLE INDUSTRY
Interview with Dr. Manuel Madrid, Founder and Director of Fruitprofits
Fruitprofits is a marketing and technology consulting company which specialises in the fresh produce business. Fruitprofits helps companies worldwide increase sales and profits through new marketing and branding techniques, new product development and greater efficiencies in the value chain. Tomatoes Today talked to Dr. Manuel Madrid, Founder and Director of Fruitprofits, to learn more about the importance of marketing techniques in the fruit and vegetable industry.
Q. How important has marketing become in the fruit and vegetable industry?
A. Retailers and consumers often view fruits and vegetables as commodities, that is to say, undifferentiated products. With a few exceptions, quality, taste and colour are not linked with a brand. Therefore, the only way left for fresh producers to compete is on the basis of price and volume. This has led to the current situation of low field prices and profits.
Marketing can remedy this, by creating consumer demand for specific varieties and production methods that are recognised by the consumer through a brand. This engenders differentiation, and with this differentiation, the opportunity to raise prices and secure a stable demand. So marketing is key to building sustainable profits in the fresh produce business.
Q. How has the use of marketing developed in the Spanish fruit and vegetable sector in recent years? Are growers more aware of its importance?
A. There are a few companies in Spain and in Europe as a whole that use marketing techniques regularly. But more than 85% of fresh produce is sold without a marketing and communication plan and without a branding strategy. Internationally oriented producers understand the importance of a marketing strategy and have developed one. For the others, however, arguing over price and volume is the norm, because they have no tools that can help them differentiate their fresh produce.
Q. What basic rules should the marketing department of a fruit and vegetable producing company take into account, if it is to be successful?
A. There are some general marketing rules that also apply to the fresh produce business:
1) Identify your USP (unique selling proposition): What is unique about the produce or service you provide? You have to identify your USP first, before competing.
2) Do your marketing homework: Segmentation, positioning, targeting. Segment your market, position your product to reach the right client segment, and address the target group.
3) Communication strategy: How are you going to communicate? What is the message? Where? Which channel?
4) New product development: What else do you have that your competitors do not have? What new products do you plan to introduce in the next 1-3 years? Without innovation and differentiation you will be competing on price and volume, and that is a race to the bottom.
Q. What benefits can producer companies with a well-integrated marketing department achieve in comparison with those companies that do not have one?
A. Companies with a well-structured marketing department and with the right marketing strategy will be better-placed than their competitors to access new markets and increase their market share. Their revenue sources will be more stable and their customer loyalty will be higher. Of course, marketing alone is not sufficient. Innovation, that is to say, introducing new products that please the consumer is also a key factor.
Q. What would you say to a producer company that has yet to incorporate marketing techniques into its sales strategy, but which does not necessarily have the resources to create and maintain a marketing department? Where can it start?
A. I would say, take a look at what successful companies are doing with their marketing strategy, not only in the fresh produce sector, but also in other industries. Allocate human and financial resources to marketing. Do your marketing homework: USP, segmentation, positioning, targeting.
And finally, seek out the advice of a marketing expert who is familiar with the fresh produce industry.
To learn more about Fruitprofits and marketing techniques and technology in the fruit and vegetable industry, visit www.fruitprofits.com or contact Dr. Manuel Madrid.
Syngenta Seeds Vegetables Tomatoes Today – December 2011