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February 2011 Archive for Marketing Strategy

RSS By: Scott Stewart, AgWeb.com

Marketing Strategy

Don't be fooled by average

Feb 21, 2011

 

As a word, average is deceiving. When carelessly used in writing, average provides an excuse for lack of effort. It can lull you into accepting mediocrity.
 
The other day, I read an article in which the author suggested you shouldn’t spend time focusing on marketing in volatile times because your reward will be an average price. Let’s put aside the obvious—that I think you should focus on marketing—and look at the trouble caused by average.
 
This is important for a few reasons.  For one, it’s irresponsible to suggest that the best you can be is an average marketer. Articles and blogs that frame marketing as a management challenge offering only an average return are harmful to your business.  You might begin to believe it. You might assume it’s not worth trying to improve.
 
Producers who invest time in their marketing—who are strategic, consistent and disciplined in approach—can build a better-than-average price over time. Yes, it requires effort. However, with the proper approach, you can avoid the frustration felt by the average marketer.
 
You’re no stranger to effort, are you? Did you give up when fields were wet last spring or when corn was still in the field last winter? You’re often faced with challenges. My guess is that when adversity strikes, you look for ways to overcome it. That’s why you’re still in business today.
 
Moreover, you can’t afford to be satisfied with average. Case in point: Our firm researched USDA data to determine how many years it takes for the number of farms in the United States to be halved. We call this period of time the “half-life” of American farms. Since 1919, the number of U.S. farms dropped by half four times. At the current pace, the number will halve again in 2022, 11 years from now.
Of those producers no longer farming, some retired well, some retired hurting and others went bankrupt. Those who retired well did not assume being average was good enough. They likely owned a good portion of the land they farmed, managed their operations better than average and consistently did a better-than-average job of managing market volatility.
Eleven years from now, we are going to see some very big operations. The spread between the haves and have-nots will be wider. We’ll see average and above average marketers. As the years pass, I firmly believe that producers who do an average job with their marketing will struggle and fold.
Why? We are in what’s been described by executives at respected companies like Nestle and in magazines such as the Economist as a period of permanent market volatility. Marketing isn’t getting any easier. Producers who capture more opportunity when it’s available—and minimize risk in down years—will be financially stronger than the average marketer. They will have the means to pay higher land rents, purchase more efficient technology and survive volatility.
Perhaps the reason some people equate marketing to average returns is because much of what is written about marketing is based on a price outlook approach. Price outlook is a useful tool through which you can get a feeling for what the market may do so that you can filter strategic decisions. However, you shouldn’t leave your marketing to it. It is virtually impossible to consistently predict price. Price can drop when all of the fundamentals in the world point higher. The opposite is also true. If you spend your time chasing price, you most likely will see an average return at best.
 
I encourage you to develop strategies that minimize the difference between your price and the market highs and maximize the difference between your price and the market lows. That’s good marketing.
Most of all, don’t buy into the average myth. You can be better than that.
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.
The data contained herein is believed to be drawn from reliable sources but cannot be guaranteed. Neither the information presented, nor any opinions expressed constitute a solicitation of the purchase or sale of any commodity. Those individuals acting on this information are responsible for their own actions. Commodity trading may not be suitable for all recipients of this report.  Futures trading involves risk of loss and should be carefully considered before investing.  Past performance may not be indicative of future results. Any reproduction, republication or other use of the information and thoughts expressed herein, without the express written permission of Stewart-Peterson Inc., is strictly prohibited. Copyright 2011 Stewart-Peterson Inc. All rights reserved.

Super lessons from Dallas

Feb 11, 2011

The Super Bowl teaches football fans a lot. Among those lessons: Shop for snacks two hours before the game to avoid lines. You can get a sore throat in winter and not be sick (nonstop cheering will do that to you). Buy tickets on e-Bay at your own risk.

 
There are lessons for your business, too. Whether or not you watched the game, please indulge a couple of happy Packer fans and allow us to share a few highlights relevant to your marketing.
 
Always prepare:
The score was 21 – 17, Packers ahead. The Steelers were marching toward the end zone with momentum on their side. Then, in one of the game’s most pivotal plays, Packer linebacker Clay Matthews knocked the ball loose from the Steelers running back, and Green Bay recovered the fumble. Matthews later credited his reaction to film study and preparation. He knew what he would do if he saw that particular play materializing. He had made his decision in advance, then executed without hesitation. You’ve heard that marketing mantra here before.
 
Don’t give up:
How many key passes did Packer receivers drop? Six, I think. They were crucial, gut-wrenching drops, the kind that inspire anger and frustration in most people, Packer quarterback Aaron Rodgers not among them. Rather than get upset, Rodgers inspired confidence by keeping his cool and trying again. Receiver Jordy Nelson, who dropped a few of those key passes, said later about his mistakes: “If you play this game long enough, you are going to drop the ball. You have to move on.” You’re going to make marketing mistakes, too. Don’t let them stop you from the end goal: winning.
 
Have patience:
Again, learning from dropped passes: Aaron Rodgers didn’t panic or begin forcing passes to his receivers after they failed to catch so many of them. When the game was over, it was clear his patience paid off. When you hit a rough patch with your marketing, be patient. Recognize it’s going to happen. Adjust your planning if necessary, and keep moving downfield.
 
Create contingencies:
Hours before kick-off, the Dallas fire marshal declared temporary seating incomplete and unsafe, leaving 1,200 ticketholders without seats. NFL personnel scrambled to find a place for fans, but in the end, 400 people had to watch the game on a television monitor. What should the NFL been prepared to do? The lesson here is ask yourself the “what if” questions before worst-case scenarios become reality.
 
Work as a team:
During the regular season, the Packers lost 15 players to injury. Each time, someone else from the team rose to the occasion. Before halftime in the Super Bowl, the Packers lost two key players to injury for the remainder of the game. Again, others on the team stepped in. When your "plan A" strategy does not work, do you have a "plan B," "plan C," and "plan D" in place to save the day? The Packers did! They had bench strength to back them up.
 
Don’t get overly confident:
Was Christina Aguilera too confident prior to singing the national anthem? It’s been reported that she’s been singing it for audiences since age 7. She certainly has plenty of stage experience, so you wouldn’t think stage fright caused her to get the words wrong. I don’t know the answer. But I do know over-confidence is dangerous in marketing. The markets can turn on a dime. Preparation is the key. Aaron Rodgers said on the David Letterman Show that, on paper, his stats, size, speed, etc. would not indicate that he had a chance of being a Super Bowl winning quarterback. He credited hard work and preparation for his success. How many marketers can say the same?
 
The bottom line? Long after hoarse throats recover, grocery store shelves are restocked and snow melts in Dallas, marketing lessons taught by the big game endure. Heed them, and you’ll find yourself on the winning side of the market.
 
Packer fanatic Scott Burditt appreciates the opportunity to relive the game by contributing to this blog.
 
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.
The data contained herein is believed to be drawn from reliable sources but cannot be guaranteed. Neither the information presented, nor any opinions expressed constitute a solicitation of the purchase or sale of any commodity. Those individuals acting on this information are responsible for their own actions. Commodity trading may not be suitable for all recipients of this report.  Futures trading involves risk of loss and should be carefully considered before investing.  Past performance may not be indicative of future results. Any reproduction, republication or other use of the information and thoughts expressed herein, without the express written permission of Stewart-Peterson Inc., is strictly prohibited. Copyright 2011 Stewart-Peterson Inc. All rights reserved.

February 6 Scenario Bowl

Feb 03, 2011

A ball cap placed at just the right angle on top the TV. An old jersey pulled from a dresser drawer. A purposely unshaven face. Come Super Bowl Sunday, what more can a superstitious football fan do to influence the game’s outcome?

 
Coaches for Green Bay and Pittsburgh will take a different approach: planning, planning, planning. As if playing a chess match, coaching staffs will make decisions in advance for every possible scenario the opposing team might throw at them. Every single play in the game will involve scenario planning . . . “if they show blitz, we audible to ‘x.’” At halftime and throughout the game, coaches will be ready to take advantage of opportunities and minimize risk.
 
Even details outside the game—from flights to Dallas to evening activities—will require planning for different scenarios.
 
Winning takes planning for the unknown. It’s that simple. At Stewart-Peterson, we call it Market Scenario Planning. It’s our approach to help you deal with market uncertainties. We do not focus on where prices may go. Instead, we focus on preparing you for whatever the market may do.
 
Chances are you already apply scenario planning to your operation in one form or another. When you develop contingencies for planting crops, you’re using scenario planning. It’s simply the best method for approaching important decisions, and I encourage you to apply it to your marketing.
 
In Wisconsin on Super Bowl Sunday, I imagine scenario planning among fans will go something like this:
  • If Pittsburgh scores, I’ll move my seat and rearrange the ball cap on my TV.
  • If Pittsburgh gets ahead by 10, the Lombardi-era jersey goes back in the dresser.
  • If it appears the Packers might lose, I’ll brainstorm reasons for calling in sick on Monday.
  • If the Packers are up by three scores, I’ll reserve taunts until the game is clearly ours.
  • If the Packers are winning and have the ball with a minute to go, I’ll start posting cocky Facebook comments.
  • If the Packers win, how will I get off work for the victory parade?
 
Planning is a lot of work. It can also be a lot of fun.
 
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.
The data contained herein is believed to be drawn from reliable sources but cannot be guaranteed. Neither the information presented, nor any opinions expressed constitute a solicitation of the purchase or sale of any commodity. Those individuals acting on this information are responsible for their own actions. Commodity trading may not be suitable for all recipients of this report.  Futures trading involves risk of loss and should be carefully considered before investing.  Past performance may not be indicative of future results. Any reproduction, republication or other use of the information and thoughts expressed herein, without the express written permission of Stewart-Peterson Inc., is strictly prohibited. Copyright 2010 Stewart-Peterson Inc. All rights reserved.
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