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October 2009 Archive for Marketing Strategy

RSS By: Scott Stewart, AgWeb.com

Marketing Strategy

Plant Science Applied to Marketing

Oct 29, 2009
If you’ve read my blog before, you know I sincerely believe marketing can be done well. It requires, among other traits, the application of sound business management practices.
 
When I wrote last time about “constraints” that keep you from accomplishing more in life and business, it was more than just my opinion. I based those thoughts on time-tested business management theory.
 
The “Theory of Constraints,” found in present-day management textbooks, has its roots in a 1928 principle called “Liebig’s Law.” Liebig’s Law, or the Law of the Minimum, was first developed in agricultural science by Carl Sprengel.
 
The law states that growth is controlled not by the total of resources available, but by the scarcest resource – the limiting factor. This concept was originally applied to plant and crop growth, when agricultural scientists found that increasing the amount of plentiful nutrients in the soil did not increase plant growth. Only by increasing the amount of the most limiting nutrient was the growth of the plant or crop improved.
 
In his book called The Goal, Eliyahu Goldratt applied this scientific breakthrough to business. He popularized the Theory of Constraints, which states that at any given point in time, an organization has at least one constraint which limits its performance relative to its goal. A constraint can be internal or external, a machine, a person or managerial, like a policy or procedure.

Apply this principle to your grain operation and ask yourself, “What is my primary constraint?” For continuous improvement of your business, Goldratt encourages managers to decide how to deal with the constraint and, as a result, improve the overall performance of the business.
 
The Theory of Constraints can and should also be applied to financial management and marketing. Having spent nearly 30 years in the commodity business, I have seen just about every kind of constraint hold back producers from being better marketers.

I listed two examples in my previous blog: You may have superior knowledge of all the marketing tools that are so crucial to marketing today, yet lack the time to employ those tools or the discipline to make decisions and pull the trigger at the right moment. Conversely, you might have time to do your own marketing well, yet lack the knowledge necessary to strategically implement the strategies.
 
  • If you already have superior knowledge of the marketing tools, spending more time learning about them is not going to improve your marketing. Instead, learn to have the discipline to use the tools and pull the trigger when you’ve made a decision to act.
  • If you have the time and discipline but lack the knowledge, hire an expert. In marketing, you either need to be an expert—in which case you also need to have the discipline to take action—or you need to hire an expert. 
Evaluate your marketing process the same way you evaluate your crop enterprise and all the other segments of your operation. Methodically look at it, figure out what you are good at doing, and focus on trying to improve your most limiting constraint.

I wish you well as you continue to remove obstacles in your path to marketing done well.
 
Scott Stewart is president and CEO of Stewart-Peterson, a commodity marketing consulting firm based in West Bend, Wis. You may reach Scott at 800-334-9779, email him at scotts@stewart-peterson.com.

What's Standing in Your Way?

Oct 20, 2009
Do you ever feel you could accomplish more if it weren’t for just one or two things getting in the way? Maybe you’d finally start tweeting on Twitter if you had more time. Maybe you would have gotten into the field earlier if it hadn’t been for the rain. Maybe you would restore that old tractor if you had the expertise.
 
These are constraints, and we all have them.
 
Do you realize that there may be only one or two constraints that limit what you want to accomplish in your marketing? I’m sure many of you already recognize your strengths. You might even know what is limiting you. We work with many farmers in identifying their strengths and constraints. Through a specific series of questions, we seek to uncover a producer’s true constraints that are holding them back from achieving the marketing results they desire.
 
For example: You may have superior knowledge of all the marketing tools that are so crucial to marketing today, yet lack the time to employ those tools or the discipline to make decisions and pull the trigger at the right moment. Conversely, you might have time to do your own marketing well, yet lack the knowledge necessary to strategically implement advanced strategies. These are just two examples of constraints.
 
What are the top constraints in farm marketing? In our firm’s 25 years of experience consulting with farmers, constraints fall into one of these five main categories:
  1. Knowledge
  2. Risk Ability/Tolerance
  3. Time
  4. Discipline
  5. Experience/Control
In our experience, most producers are held back by only one or two constraints. I don’t mean to imply that it’s easy to overcome them. (How do you make more time when there isn’t any?) However, I do believe it’s vitally important for you to truly recognize them. Only by seriously assessing where you’re at can you begin to effectively move forward.
 
If you’re frustrated by marketing, I recommend you have someone help you take stock of your current approach so that you reach the point of truly understanding your strengths as well as what you need to do to take your marketing to the next level. We do this all the time for producers as a free service, before we ever talk with them about becoming clients. We’ve found that it gives the client-advisor relationship a better chance for success from the start.
 
Producers whose marketing skills we have assessed—even those who felt confident in their marketing abilities—have appreciated the assessment. They say it helps them be more honest about themselves, and that having someone else put their analysis down on paper makes a big difference.
 
Despite the time constraint harvest causes, you may find a few minutes in the cab to reflect on what might be holding you back in your marketing. I am curious to know which of the five constraints you think apply to you.
 
Scott Stewart is president and CEO of Stewart-Peterson, a commodity marketing consulting firm based in West Bend, Wis.

Visit www.stewart-peterson.com to learn more about the Marketing Assessment Profile® (MAP), a free, no-obligation service for producers. You may reach Scott at 800-334-9779, email him at scotts@stewart-peterson.com.

Thoughts on Harvest

Oct 07, 2009
I had the opportunity to ride in a 12-row CLAAS corn chopper last week. Wow, what an impressive piece of equipment. As I enjoyed the view from the cab, I wondered what all of you were seeing in the field.
Our clients have shared a variety of comments on harvest conditions, ranging from “it’s better than expected” to “we’re gonna freeze tonight and the only thing we’re doing up here is silage.” That comment came from Wisconsin, where fall swooped down from Canada on 40 mph winds.
Another thought that came to mind during my ride was how important it is to always choose the right tool for the job. A 12-row chopper isn’t right for everyone. That principle holds true for any task. A highly skilled carpenter can use a hand saw to cut a board square and true. As for me, I’d go with a table saw equipped with cutting guides.
In farm marketing, some producers are like the skilled carpenter, well-equipped to use the “hand tool” and do much of it themselves. These producers may be suited to using a discount or traditional broker. If you are…
  • a good independent thinker,
  • disciplined,
  • knowledgeable about each tool and how and when to use it,
  • willing to consistently put in the time to manage your strategies and positions, and
  • have the willingness and guts to pull the trigger when it’s necessary…
…then you may be very well suited to using a discount or traditional brokerage firm.
On the other hand, if you …
  • are often too busy in the field or with other aspects of your business to pull the trigger or make a decision confidently, or
  • lack the time to learn how to use the sophisticated tools it takes to market your crop well, or
  • do not have the desire to acquire more knowledge and skills…
…then a fee-based marketing advisor or consultant might be a better match for your situation.
It just depends how you want to spend your time.
I’m sure you can think of examples where using the wrong tool was frustrating. So while you’re out there harvesting your crop with the tools of your choice, think about the tools you’re using, whether they are a good fit, and whether you enjoy using them.  
Be safe during harvest. I wish you well. And, please, if you get a moment, share how it’s going.
Scott Stewart is president and CEO of Stewart-Peterson, a commodity marketing education and advisory firm based in West Bend, Wis. You may reach Scott at 800-334-9779, email him at scotts@stewart-peterson.com, or visit www.stewart-peterson.com .
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