Archive for February, 2009
Farmer Smith raises hogs farrow-to-finish in large confinement buildings according to conventional protocols for yield and health maintenance. He sells his hogs on the commodity market, they are processed by a large corporation, and they end up as fresh cuts in attractive packages on supermarket shelves all over the country under a well-reputed brand name. The label contains the company’s logo and all legally-required information on nutrition and handling. The meat is priced in line with competitors’ pork.
Farmer Brown raises certified organic Berkshire hogs in deep-bedded hoop houses and sells the meat in frozen cuts at a local farmers market. Farmer Brown personally answers customers’ questions and hosts farm tours. In addition to all the legally-required information, the stick-on label on each package also has a picture of Farmer Brown, the location of his farm, the USDA Organic seal, a sample recipe, and a short blurb about how his pigs are raised. Each package sells for about twice what one would pay for comparable commodity pork at the grocery store.
If I asked you what Farmer Smith’s product is, what would say? How about Farmer Brown? Sure, they are both selling pork, but isn’t there more to their product?
Pork may be the tangible consumer good that changes hands during a transaction, but consider what else consumers are getting when they buy pork from these producers. When they buy Farmer Smith’s pork, consumers are probably getting consistency, a relatively low price, perhaps a freshness guarantee from the company, and the convenience of getting all their shopping done in one place. When consumers buy Farmer Brown’s pork, they are probably getting a unique flavor profile, a third-party certification of the grower’s production system, perhaps a good feeling for supporting local agriculture, and a relationship with a particular farmer, his story, and his way of life.
A product is really the total bundle of benefits, both tangible and intangible, that a customer receives in a transaction. Farmers and other food entrepreneurs who wish to sell agricultural products, especially in non-commodity or value-added markets, need to carefully consider the full scope of their products, and to which customer segments those benefits will be appealing enough to generate sales. Although pork may be pork to some consumers, to others, that pork may be a relationship, a social cause, or a vote for the shape of the future of agriculture.
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