Alabama A&M University
S M A L L FA R M S R E S E A R C H C E N T E R
FA C T S H E E T
COLLEGE OF
AGRICULTURAL, LIFE
AND NATURAL SCIENCES
United States Department of Agriculture
Office of Advocacy and Outreach (OAO)
Marketing Means Creating Win-Win Situation
Producers must be proficient in growing their product, but marketing that product is just as
im-portant to being a successful operation. The intent of this fact sheet is to foster a better
under-standing of why consumers buy your products, and of how marketing activities can
help this process and give you a competitive edge.
Marketing goes beyond the narrow viewpoint of being only retailing, promotion, and
advertising. Using a broader perspective, successful marketing today means the seller must
consider the buy-er, and act to facilitate the exchange of products or services so that both
parties gain in some way. This emphasizes several points:

Successful marketing involves an exchange process. Usually, the grower trades
product for money, and the buyer trades money for product.

Although there may be several exchanges, the money ultimately comes from the
final consumer. So, producers need to think of the final consumer as the buyer.

To participate in the exchange, the producer-seller must gain, or will not survive in
the long run. If there are several exchanges, each seller must gain.

To participate in the exchange, the product must provide what the buyer needs or
wants. The buyer must get enough value or satisfaction from the grower's product to
jus-tify the price. If there are several exchanges, each buyer must gain. Again, the
buyer is ultimately the final consumer.
Starting with the raw product, various marketing activities or marketing functions can create
val-ue or satisfaction for the buyer in five ways. There is value from form, location, time,
ownership, and information.
First, consider value from the form of the product. Growers can produce the best cotton or
sugar beets, or wheat, or cattle. However, most people do not want and probably will not
know what to do with cotton, sugar beets, wheat, or cattle because they are in the wrong
form. Cotton has utili-ty or more value to the consumer if it is transformed into shirts and
dresses. Sugar beets have more value, or provide more satisfaction to most people if its form
is changed to sugar and even more if sugar is changed to candy or soft drinks. Wheat gives
more satisfaction as flour, or bread and pasta. A steer provides more satisfaction as steaks or
hamburger. There is also value in clean and uniform apples, crisp lettuce, and tray packs of
tomatoes.
Small Farms Research
Center
Alabama A&M University
4900 Meridian Street
James I. Dawson Building
RM #219
P.O. Box 700
Normal, AL 35762
Second, satisfaction can be obtained from the location of a product. Producers can grow
beauti-ful vegetables in Moulton or Decatur, Alabama, but they are useless (can't make
money) if not shipped to Birmingham, Alabama, or Nashville, Tennessee, or Chicago, or
some other city. The product is in the wrong place.
Looking at it as a final consumer, a juicy hamburger with all the trimmings gives me the
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most satisfaction and value as I bite into it. There is a little less utility if I have to drive to the restaurant to get one,
and even less if that restaurant is clear across town. For the final consumer, the hamburger is almost useless if it's
running around a pasture somewhere.
So the hamburger's location is very important, and can add value. The notion of pizza or flowers being delivered to
your door also builds on value from location. Similarly, produce gains value as it moves from the farm to the
packing house to the wholesalers/retailers and finally to the shop-per. Marketing functions that increase value via
location include transportation, aggregation or the accumulation of products, disaggregation or breaking bulk
shipments, and creating or provid-ing an assortment.
Third is value from having product at a desired time. Two examples of the wrong time are the Christmas tree
grower that delivers on December 26, and turkey growers who have turkeys ready one week after Thanksgiving.
Not much can be done with the trees, but the turkeys may have the option of being frozen and sold at a later date.
Thus, being able to control when a product reaches the market can add value. It could be quite profitable to either
be the first with apples on the market, or to hold the crop in a controlled at-mosphere reefer until after the main
harvest. Going back to our restaurant and its customers, satisfaction from time also means not receiving hamburger,
buns, cheese, lettuce, and tomatoes on different days, but rather at the same time and in manageable amounts.
Buyers typically want predictable, consistent supplies. Marketing activities that can help create time value include
sto-rage and scheduling.
Fourth is utility associated with ownership or possession of a product. Possession typically comes with the
conclusion of an exchange and the transfer of ownership from seller to buyer. Sheep grazing in a meadow and
golden fields of grain are nice, but the value is realized only at the sale. Further, producers may have several
options for timing the transfer of ownership. This has certain risk and control aspects, such as who bears costs of
spoilage, loss, or price declines, and who pays freight and insurance. Hedging, and credit and financing issues may
also be in-volved. A cash discount or favorable credit terms might be the deciding factor in making a sale.
Finally, we consider value and satisfaction from information on products. Information typically communicates
what consumers want to know. Newspaper ads tell consumers of a special on lettuce, grades might convey the
tenderness of a steak, store signs explain whether sweet corn is fresh, and labels list the nutritional contents of a loaf
of bread. Kona Coffee and Washington ap-ples get a price premium because of the information conveyed by their
names, as might "organic" produce or those that are "USDA certified." Typical marketing functions that create
information value include advertising and promotion, labeling, packaging and the activities associated with market
news and statistics.
The value that final consumers place on a product ultimately determines the price that growers will receive. The
price, in turn, should be compared against costs to determine if it pays to create the value. An understanding of how
the combination of form, location, time, ownership, and in-formation contribute to the satisfaction of buyers can
help producers and agribusiness owners di-rect their marketing activities toward a more successful operation.
Author: Duncan M. Chembezi, Ph.D. Professor and Director, Small Farms Research Center , Alabama A&M
University
Cooperating Units: USDA Office of Advocacy and Outreach (OAO), USDA/NIFA/ Beginning Farmers and Ranchers
Development Program (BFRDP), USDA/OAO/Outreach Assistance for Socially Disadvantaged Farmers and
Ranchers (OASDFR) Program, Alabama Cooperative Extension Systems, and Alabama A&M University.
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