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Organic Business Guide/Marketing
< Organic Business Guide

Marketing
Throughout this guide a number of characteristics of organic markets have been given,
especially in chapter "Starting from the market"
...
Some entrepreneurs
have a natural gift for marketing, others find it difficult
...
This chapter provides you with the basic know-how needed for successful
marketing of organic products
...
Any
supplier could find a place in the international market
...
Newcomers try to find their place by being cheaper
...
You
may start at the bottom of the market but as soon as possible you move up by building a track
record of accomplished deals, learning and improving along the way
...
The majority however sells to a number of buyers,
into quite different markets
...
You may still sell part of your goods on the spot market: this last one is
more for speculators
...
How you do your marketing obviously differs depending on the market that
you are addressing
...
A contract between the wholesaler and the farmers group was signed while

the production was at planting stage
...
20 birr (0
...
At the time of harvesting, another trader from the region promised the
farmers he would buy their onions at 2
...
24 dollar) per kg, and they terminated
the previous contract
...
20 birr (0
...
The
farmers therefore lost a lot compared to the price offered by the wholesaler who had
wanted to establish a long-term trade relationship
...

The marketing plan is part of your business plan (see chapter "Developing the business step by
step")
...
Typically, a marketing plan includes the following steps:
Market overview – trends, market segments, target markets
Competitive review
Strengths, weaknesses, opportunities and threats
Sales goals & marketing objectives
Strategies
Marketing budget
Timing

There is a lot of general information about making marketing plans on the internet
...
In some cases information is
promised for free, but very soon you are triggered into buying something
...


The 4 Ps

Figure 21: Example of the 4Ps for marketing of organic-Fair Trade
cotton from Africa
...
These are
Product, Price, Place and Promotion
...


Product
Do you know your product details: the variety, the specification, what exactly you are selling and
how it compares with that of your competitors? How are you doing your shipping, what are the
payment terms that you are proposing? Is there a story behind the product (e
...
the impact on
the farmers' livelihoods)? Also, have you asked the various buyers precisely what they are looking
for? Can you supply that? If you are a coffee exporter, it may be fairly easy to determine whether
there is a market for your coffee, organic and/or Fair Trade, as most origins are well known to
most traders
...
Many buyers will insist on seeing and testing a sample before they can say whether it
is a product they might be interested in
...


Price
The way you price your product gives it a certain position in the market
...
For many commodities the conventional world
market price is taken as a reference, with a certain fixed or percentage premium added, for
example 15%
...
In times of temporary shortage especially, prices can shoot up
...


There are 4 types of pricing strategies (Figure 22):

Figure 22: Pricing strategies matrix (Source:
www
...
com)
...
Once this is
achieved, the price is increased
...
The cost of marketing is kept at a minimum
...
You offer a product and that’s it, no questions asked
...
However, the high price is not
sustainable, it actually attracts new competitors into the market, and the price inevitably falls
due to increased supply
...
This approach is used where a substantial competitive advantage exists
...

You will normally agree on a price in US $, sometimes in EUR
...
However, payment date may be 2 or 3 months away
...
An example of how the profitability of the
business can completely change is given in chapter "Financial planning and management"
(sensitivity analyses)
...
You reduce the risk but at
the same time you increase the opportunity to get the best possible price
...
In some sectors you have the choice to supply to an
agent, a distributor
...
Nobody really knows what the market situation is in two to three weeks time when the
fruits arrive at the market
...
In such a
case it might be advantageous to work with a commission agent, who knows the market inside
out and is always able to sell the fruit for the best possible price
...

Another example is with shea oil or butter
...
When supplying from West Africa, you
have to ship such a small volume by air freight
...
Such distributors
often become partners in your business
...

There are some efforts going on to promote internet based trading platforms[3]
...
For business in developing countries where it is already difficult to do normal
business, selling products over the internet adds yet another dimension
...
You can always place your product on such a website
and see what serious and not so serious offers come in
...


Promotion
The most important way of promoting your product, your company, is through communication
with your clients
...

You can start with compiling information for a company brochure, with the history and location
of the project, the production base, what has been achieved by the project over time, what the
plans are for the future, and ending with product information like product specification, volumes,
harvest season, and packaging options[4]
...
You come up with the reason why your products stand out: are they better,
cheaper, or targeted to a specific market niche? The particular mix of core benefits of your
products is the basis for the promotion of your products; that is what you are selling
...
Stress that element
...


You could print this information as a nice brochure but you first should think through where you
would distribute this brochure
...
Another option is to prepare product description sheets for each product you
have on offer, which still can include information on the initiative on its back (see the example in
Annex "Marketing tools")
...
Your people need to all tell the same story
...
While a lot of people take
pride in having a website, its usefulness in terms of promotion is often limited, if the website is
not easily found by an internet search, or the content is not updated
...
In some countries, the
national movement or association has an internet platform where all members can present their
products
...


Building and maintaining client relations
Personal contact is of primary importance in organic marketing, more so than in general trade
...
Whereas in conventional trade your product usually goes into an
anonymous supply, this is not the case in organics
...

When you are new in the organic business you may be at a loss to know how to get your first
contacts
...
The
catalogues of past trade shows are also good sources of information
...
In some cases like the Biofach, these catalogues
are on-line
...
You may want to talk with someone about your ideas
...
They may not be in your line of business but they may still give you some advice and
contacts
...


Participating in trade fairs
To keep your commercial relationships up to date, it is best to meet your main buyers every year
...
There are a number of specifically
organic trade fairs, there are international and regional organic trade fairs, and increasingly you
will find organic suppliers also exhibiting at general trade fairs
...
It is a good place to meet
your (prospective) buyers, and to understand their requirements
...
Very often important
orders are agreed on
...
It can be a very worthwhile investment
...


The main organic trade fairs
The oldest and biggest organic trade show is Biofach[7] in Nuremberg, Germany, in February
each year
...

The All Things Organic show[8] in Chicago is the main event for the US and Canada
...

In the UK, the main show is the Natural and Organic Food Expo[10]
...
That includes food supplements
...

The European Fair Trade Fair is a new exhibition specifically for Fair Trade products, so far held
in France[12]
...


There are many more national shows where local producers and buyers meet, but also buyers
come from abroad looking for goods to import
...
For the local or regional market you should look
for local or national trade shows
...

This may help you in developing your national or regional business
...


How to get to international trade fairs
You can choose to go as a visitor, or you can have your own stall
...
The
first is sufficient if you just want to look around, or you already know your buyers
...
That is, for many, fairly expensive
but it is also a hassle to organise
...
Sometimes this is part of a wider activity to assist you improving your
business
...
In some countries, the Export Promotion
Board has such schemes, too
...
For African exporters there is an Africa Pavilion[16] at the Biofach
...
Exporters from other continents depend on their export
board to organise a country stand
...
They can give you a list
of potential buyers who also exhibit
...

If you go to a trade fair the SIPPO manual ‘From contacts to contracts’ is a very good guide to
help you get the most out of your participation[17]
...
You
should plan to follow-up on what was discussed during the meetings, send reminder letters, etc
...


Maintaining client relations
File:Farmer-cooperative-bolivia
...


Communication is key in maintaining client relations
...
Be very serious about how you handle your e-mailing
...
Otherwise you will create the impression that you are not in
business
...
Skype (Voice Over Internet) offers some cheap or free opportunities
and is increasingly used[18]
...
You can still keep in touch by phone with your
staff if there are queries over how they should reply
...
This does not give a good impression as no one
wants to work with a company that hinges on one person only (see also chapter 6
...

You have to respond to enquiries from potential buyers
...
There is no harm though in checking back
with them a few months later
...
Get their feedback - are they satisfied with your product and service, what
could be improved the next time? In case of an unhappy customer, do not hide
...

It is most important that you are reliable
...
Do
not forget that your buyers all communicate with each other, tell stories but also buy from each
other
...
There are exporters who have supplied about every buyer, but every time it
was a one-off
...


Why do buyers stick to you?
Having a couple of loyal buyers is one of the most important success factors for your business
...

You follow up professionally on complaints about quality
...

You can be easily reached
...
When you are not
there, there is somebody else in your organisation who can respond
...
You know your numbers and you know the alternatives
...
You don’t tell stories or have excuses all the
time
...
You act like a
partner
...

When you promise something, you keep to it
...

You can deal with their competitors, but are open about it instead of denying it, or giving them
a feeling that you are cheating them
...


What assistance and support can I get in marketing?
In most countries there is an Export Promotion Board
...
There may be
donor-financed Private Sector Development programmes that have a market development
component
...

The Dutch Centre for Promotion of Imports, CBI [20]has an Export Coaching programme in the
field of natural ingredients for food, pharmaceuticals and cosmetics
...
Upon pre-selection, you are visited by an expert who
makes an audit to see how ready you are
...
You can participate in the
EXPRO seminar, which includes a familiarisation study of the supply chain on the importer’s side
...
You then start preparing for
participation in a major trade show, such as Biofach
...

It is subsidised but you are expected to take over the costs increasingly
...
It has the facility to support producers in
participating in selected trade fairs: again Biofach is one of them
...
If you are also Fair Trade certified you may
benefit from support provided by local coordinators of the Fair Trade movement
...
The international Fair Trade Labelling
Organisation (FLO)[22] has regional coordinators on the ground that support new and existing
producers to improve their business
...


Summary of recommendations
Think through the main points relevant for successful marketing of your products
(target markets, competitiveness, marketing strategies and budget etc
...

Find out the exact specifications of your product; if necessary get it tested for quality
parameters
...

When agreeing a price with a client, be aware of possible fluctuations in local market
prices (farmers may sell in the open market) and in exchange rates
...


Prepare yourself for interaction with clients in a professional way
...
g
...

In order to get in touch with potential buyers and to get to know the market,
participate in international trade fairs specialising in organic products - either as a
visitor or an exhibitor
...

Ensure prompt and reliable communication with your clients
...


Footnotes
1
...
g
...
Organic Exporter Guide
...

www
...
se/epopa/Publications/EPOPA%20Organic%20Exporter%20Guide%2006
...
A Guide to successful organic marketing initiatives
...
fiblshop
...
php?sprache=EN&art=1338
2
...
netmba
...
One example is http://www
...
net
4
...
grolink
...
htm#Brochures
5
...
Your Image Builder
...
sippo
...
html
6
...
greentrade
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http://www
...
de
8
...
organicexpo
...
http://www
...
com
10
...
naturalproducts
...
uk
11
...
com/natural-organic-expo
12
...
salon-europeen-commerce-equitable
...
http://www
...
eu
14
...
sippo
...
http://www
...
eu
16
...
organicafricapavilion
...
http://www
...
ch/internet/osec/en/home/import/publications/sippo_and_partner
...
Available for free download from http://www
...
org
19
...
usaid
...
http://www
...
eu
21
...
sippo
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http://www
...
net/what_we_do
23
...
twin
...
uk/PPP



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