This front-end guidance material is an illustration of how value-added market development and implementation might be investigated. It is the initial briefing for networks interested in serving special or segmented markets. It contains information which can guide the development of an actual business and marketing plan to assess the viability of an investment.
It is organized to follow the principles for successfully entering value added markets. Everything begins with the consumer because it is the consumer who defines the business. So, it is with the consumer that our effort began and is now presented, beginning with a case study of Hispanic consumers of pork products. Commensurate with the importance of consumer analysis in a total marketing plan, a large share of this front-end guidance material is devoted to the consumer market analysis. It was also our perception that this is the least understood and least familiar territory for market channel players due to their traditional focus on production rather than consumption and market analysis.
Only after carefully examining the characteristics of the target market does the material move on to consider the issues and pitfalls of effectively coordinating a value producing market channel. Less time is devoted to the mechanics of each segment, but more is committed to relationships. Again, this is due to the current status of the industry -- those involved in a particular segment of a market channel are well schooled in the functionality of that segment - swine producers know hog production, hog slaughterers know slaughtering, and so on. They are unlikely to possess the knowledge of how to effectively align and coordinate with others along the channel.
This is front-end guidance to the challenges and opportunities for food providers. Put simply, it is a whole new way of thinking.
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Swine producers have recently expressed increased interest in gaining greater value from hogs raised by investing or aligning further up the market chain. Perceived advantages include increased control over their product, an opportunity to gain direct access to customers, and to capture a greater value of the final price of pork which has increased relative to farm prices. However, few participants in the market chain have a complete understanding of the challenges in controlling a greater part of the market chain. In order to gain insights into the issues faced by direct pork marketing firms, a case study methodology was developed and three direct marketing pork firms were studied. The case studies were conducted in the first half of 1999. Three cases were chosen: Nahunta Pork Center in North Carolina, The Egg & I Pork Farm in Connecticut and Gordito’s Meats in Utah.
Each case study participant had a unique pork production system. However, there are commonalities which arose which provide further guidance for those seeking to develop niche or value added markets.
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