Farm level marketing : case studies in the South Island of New Zealand

Abstract

The aim of this study was to learn more about how and why farmers incorporate farm level marketing activities into their operations. Exploration of the motives behind particular levels of marketing involvement, personal character attributes, identification of new opportunities, views of customers and competitors, the role of relationships and risk, and the impacts of advanced marketing strategies were among the major themes examined. The ultimate goal of this investigation was to gain insightful information that would be helpful to farmers contemplating a greater involvement in marketing at the farm level.

Using a qualitative, case study approach, seven farmers (representing a range of crops and farming practices) were interviewed. Five of the study's participants were chosen based on their demonstrated successes with advanced marketing strategies at the individual farm level. The remaining two participants, although highly successful primary producers, were selected because of a noted absence of any advanced marketing strategies in their operations.

Two broad types of marketing behaviour were identified: market based marketing strategies, and production based marketing strategies. Farmers pursuing market based marketing strategies were motivated by a combination of three factors: entrepreneurship, a perception that marketing is a valuable business function, and a sense of personal competency in marketing.

Farmers identified new opportunities through informal environmental scanning, and current business analysis. Study participants relied heavily on relationships to effectively scan their business environments, with neighbouring downstream supply chain partners often yielding pertinent information. Market based farmers were noticeably more pro-active in the initiation and maintenance of such relationships. For most farmers, internal analysis consisted of critical examination of current ventures (including trial crops and markets), and did not involve the use of formalised approaches.

Market based farmers viewed the end consumer as their primary customer, and held a focussed view of their competition that was in line with the degree of product differentiation that they pursued. Conversely, production based farmers viewed neighbouring supply chain partners, or specific markets as their primary customer, and held a relatively unfocused view of their competition. Regardless of underlying marketing bias, farmers' relationships with their neighbouring downstream supply chain partners were found to be key to their marketing activities.

Study participants that pursued advanced marketing strategies viewed their actions as a way to reduce exposure to market risk, rather than as a source of risk (the view held by production based farmers). The implementation of advanced marketing strategies had discernible impacts on the operations of market based farmers. The most significant of which were: intensification of capital requirements, reallocation of human resources, improved profitability, and the consolidation of product quality advantages into either greater economics returns, or greater market share.