CHAPTER TWO - MARKET DEVELOPMENT
Business
and canned carrot will be exception. It is critical that adequate resources be
devoted to market development efforts on an ongoing basis if the business is to
succeed. Market development and sales are two different things. Sales is about
finding buying for the products and service already developed. Marketing is
about understanding the emerging needs of customers explaining how a business’s
products and services can a address those needs and developing new products and
services where appropriate.
Marketing includes the fine art of becoming
recognized by buyers end potential buyers in the market place and building on
that recognition to increase sales. Marketing includes market research that
allows a business to stay on top of emerging trends among competitors,
technological advances, and emerging rich markets. Finally, marketing may
include seeking out and establish ing strategic partnership to increase product
and service viability and market penetration . each of these aspects of
marketing should be fleshed out in a complete business plan, though continued
evolution is essential as conditions change.
Competitive Advantage of Canned Carrot
The
competitive advantage of the canned carrot lies in its focus on local
(regional) products for the local (regional) market. The canned carrot must be
able to capture customers by having a high quality, reasonable priced product,
and excellent service, in addition the canned carrot will be able to appeal to
those customers who perceive value in supporting Nigeria agriculture and small
family farms.
In addition to a differentiated
image based on product source, the canned carrot focus on regional markets
creates additional competitive advantages. Large fresh-cut supplies require
high sophisticated, very expensive technologies in order to preserve product
over long periods of time while the products are in transit. We assume that by
maintaining high standards in procurement, production, and distribution, canned
carrot can meet and exceed the quality of product offered by its competitors by
shortening the time period between harvest and consumption thereby increasing quality
without incurring substantial costs required to maintain quality over longer
period of time. Possibly recyclable containers with their own logo as part of a
market strategy to build customer loyalty.
The competitive Environment
To
better understand the competitive environment in which the canned carrot
processing. Business would operate, we conducted limited research on other vegetable
processors in Nigeria.
Vegetable Processors
Traditional Processors
To understand more about the
competition in processing and whether any companies were planning on expanding
into canned carrot processing, we spoke with a traditional processor which has
been family-owned and operated for over 25 year are producer and processors of food-grade
white and yellow corn, with plants in Nigeria. In addition, Hartung Brothers,
inc. are new product suppliers of processing vegetables including sweet corn,
snap beens, pickling cucumbers, carrot and beets. They are also contract
producers of organic grown and vegetables with packaging available. In speaking
with them, we learned that they deal with Agrolink to process their produce.
They are not in trusted in getting into
the fresh processing business, now or in the future.
Seasonality of Produce
The
supply of most Nigeria grown produce is seasonal, yet most institutional buyers
have year-round demand. For example, seventy –five percent (70%) of schools
surveyed for an Oklahoma farm to-school program report said they had a prime
vendor from whom they purchase the majority of their food items throughout the
year.
Nigeria buyers also tend to rely on
relatively few renders. For many buyers, having one vendor makes all purchasing
agreements much more convenient.
Successful marketing of Nigeria processed produce depends on
building and maintaining strong, ongoing relationships with buyers. Seasonal
breaks in the relationship between Nigeria and buyers will make it much more difficult,
if not impossible, for business to create and increase market share. Therefore,
we cannot recommend limiting the business strictly to Nigeria raw product in
season. However, a business model that maiximizes the use of Nigeria. Produce
when available, supplemented by produce from small family farms in other parts
of the country , can distinguish itself in the market place from other
suppliers of while and canned carrot produce who rely on large grower and
imported produce. Some locally- grown products, such as root vegetables, can be
stored for long periods of time under proper conditions. If significant
quantities of these vegetables are harvest during their growing season, it may
be possible to satisfy demand for these products throughout the year for other
vegetables such as lettuce and peppers, it is necessary to find other sources
of raw product during the off season.
At first glance, importing produce
from other parts of the country may seem inconsistent with goals of a locally
based canned carrot produce facility. However, due to the constraints mentioned
above, it may become necessary to go beyond Nigeria’s borders. In doing so
there still exists a significant opportunity to obtain premium products that
distinguish the regional, small-scale canned carrot facility from other
competitors. Best foods global, Nigeria cooperative is a group of organic
farmers in Southeast Nigeria who sell fresh produce year-round farmer’s markets
and community supported Agriculture delovenies. The cooperative is dedicated to
the viability of small family farms and
connects consumers and producers through a controlled distribution system
throughout the Nigeria. By securing supply contracts from small family owned
farms in other states out of season and for products that cannot be produced in
Nigeria, the cooperative can provides fresh, safe, and healthy food to families
in Nigeria, throughout the year, while, at the same time, securing markets for
small-scale farmers.
By developing a network of suppliers
from across the country who share the same standard and values, a business can
continue to distinguish itself as a supplier of a quality product to its
buyers.
Although non 100% local, such a
system helps meet the needs of the buyers while helping to make the operation
of the facility financially feasible, and makes a positive contribution to
small farm viability.
Furthermore, the development of a
canned carrot facility required a large capital investment. In order for the
facility to be profitable, it should ideally be processing product throughout
the year. Otherwise, the fixed costs for the project (i.e. loan payment,
utility bills, etc) will likely outweigh any profit earned during the
production season.
Estimates of Institutional Demand Market Share
To determine
the size of the potential institutional market for fresh and fresh processed
produce in Nigeria, we
1. Organized
data for each type of institution by product, quantity, and price.
2. Calculated
average price and quantity per unit (e.g. bed, Student, etc.)
3. Determined
the number of units on a state wide basis
4. Calculated
overall demand and value of product sold for each product
5. Considered
a range of market shares in relation to a minimum viable market share of 20% of
the identified institutional market for canned carrot processed vegetables.