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Market Research

Market research is a key tool for helping small producers to sell their products 

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From: Adding value to food – Footsteps 65

Practical ideas for adding value to food

Market research is a key tool for helping small producers to sell their products. Marketing is about selecting and designing products that are likely to sell, rather than making products without checking to see if they are likely to sell. There are several key stages to consider.

Identify customers
Who are the expected customers? Are they men or women, children, restaurants, institutions, international buyers? What do they buy at present? What might influence their choices? This might include attractive packaging, price and reliable supplies.

Market surveys
Find out what these customers want. Design a simple questionnaire to use with sample groups. You need at least 20 people and ideally 100 to carry out a reliable survey. Use the survey with people who represent the likely customers. Don’t choose people you know. Once the survey is complete, count up and analyse the results. For example, 45 out of 60 interviewees said they preferred mango (75%) to other dried fruits.

Work out the potential demand by combining these findings with the size of the target group. Look at the likely competitors. For example, if 5% of school children surveyed said they are likely to buy a fruit drink each week and there are 15,000 school children in the town, the total market among school children will be 750 each week (15,000 x 5/100). There are two competing producers. This will help to plan production of appropriate quantities.

For small producers, getting to know their customers, serving them better and gradually expanding is the best way forward.

Market share
Most products are produced by a number of different producers who compete with each other. The market share for any one producer will depend on the number and size of their competitors and the pricing and presentation of competitive products. To be successful, producers have to think of ways to make their particular product more appealing.

Test the market
It is a good idea to test your products to find out if the quality is acceptable, if the price is right and if the selling location is appropriate. Test using free samples, or try selling samples. Products of very high quality may sometimes be too expensive to sell.

There are many ways to tell people about products. Advertising can seem expensive. If you are designing posters, adverts or leaflets, consider:
What is new or different about your product?
Where will people see the message?
How will you attract their attention?
Do they have enough information to find the product? The most important way of promoting any product is to have satisfied customers who tell others about the products and services.

Develop competitive advantage
Small producers with really good ideas for new products will find that others will always copy them. It is important to keep thinking of new ways to keep customers happy. Keep improving! Develop new ideas to keep one step ahead.

Adapted from two articles written by Alison Griffith in Food Chain, Issues 30 and 31, produced by ITDG, Bourton Hall, Rugby.

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