Strategic marketing can work for agribusiness too

The Australian agriculture industry has boomed in 2022 thanks to strong demand for soft commodities and record-breaking crops1. The war in Ukraine has contributed to a surge in grain prices, and livestock prices are also up significantly.

Unsurprisingly, there is a common misconception that agribusinesses don't need to market themselves. However, Bradley Barnes, Partner at Brentnalls is urging agribusinesses to rethink the value of marketing. “Farmers should invest time and money in marketing as it helps attract potential new clients to an agribusiness and its products rather than relying on the hard slog of sales.

Moreover, having a good brand reputation can not only support sales but may even provide enhanced access to more land for lease or sale if the business expands.” 

Take a leaf out of the wine and fruit book 

The use of marketing is standard fare for wine and fruit producers seeking to build brands celebrated for quality and consistency. However, there is no reason other agribusinesses can't take a leaf from the same marketing textbook to improve their bottom lines. 

Bradley adds, "In truth, grain growers, in particular, can use business strategies to improve profits, such as forward contract sales to lock in prices and hedge wheat sales against wheat futures.”

Alternatively, livestock sellers and milk producers can use long-term fixed price contacts. "Amongst other things, a farmer could look to go organic or make production changes for added quality that helps them stand out.”

These strategies should all be reviewed for their business case value to ensure the additional investment leads to improved margins and profits. Nevertheless, strategic marketing goes further than pricing strategies and will potentially have more customers knocking on your cellar or farm door. 

Moreover, having a good brand reputation not only support sales but may even provide enhanced access to more land for lease or sale if the business expands.

Marketing puts your business on the front foot with buyers

Buyers have more choices than ever before and make buying decisions based on an endless stream of information they can access 24/7. By the time a buyer contacts you, they've already completed as much as 80 per cent of their decision-making2. 

But before you start blogging or advertising, you'll need a marketing plan, which should be an element of your overall business plan – some say the most crucial but often the most difficult to develop. A comprehensive marketing plan examines global and consumer trends, reviews the marketing mix of product, price, place, and promotion. It will also detail how you will market your product or service over a certain period.

Once you have a plan of attack for your marketing, be sure to establish a budget. Of course, every business is different, but your budget should be appropriate to your revenue. 

When it comes to calculating your budget, here's a general rule of thumb3:

• Up to 5% to 7% of your total revenue, and you can maintain your existing sales.
• Up to 7% to 10% of your total revenue allows you to grow your business and be competitive.
• Up to 10% to 15% of your total revenue means you're being aggressive and seeking brand saturation.

Marketing drives your growth

Good marketing and growth happen when a business knows its brand, unique selling proposition (USP) and target market. These three elements combined give you a powerful tool to drive more customers and, most importantly, the right buyers to your business.

Your USP is your marketing holy grail — it's what will automatically drive customers to your door. It makes a client buy your livestock rather than from the competition. 

Every business has a target market or markets. Markets can be segmented in many ways, such as demographics (customers of a certain age), gender, culture, product, location, industry or function and customer values. It's vital that you know yours so that you can communicate with buyers in the most appropriate and effective ways.

If you are starting from scratch and have no idea whom you should market your products, research your potential competitors and observe their customer base. This information will give you a group of prospects that will most likely buy from you as they are buying similar products from your competition. 

Getting on with the marketing 

Now that you've established what you're selling, whom you're selling it to, what makes it different, and a budget, you're ready to start marketing. Most marketing plans incorporate a variety of components and typically will include a website, the use of social media, association membership, advertising, and events.

There's no denying it—today's farmer needs to be technologically savvy, including having a website. A website serves as the most accessible hub for your business. It gives an agribusiness complete control of its online presence. A website is cost-effective and reaches a vast number of customers. Whether you use your site as a static farm brochure to get your name out or sell products online, a website can help your marketing shift to the next level for a minimal investment, especially if you use a web building templates such as WordPress, Weebly and SQUARESPACE. Template subscriptions are offered on monthly and yearly plans. At the time of writing, Managed WordPress starts costs AU$28 a month4, while Weebly offers a basic template free of charge5. 

At the same time, a branded social media page for your agribusiness on Facebook or LinkedIn, that are free to set up, can be used as a marketing channel. Also, consider public relations, blogging, and online advertising such as AdWords to spread the word about your products and brand reputation and drive engagement to your agribusiness. 

Join farm associations

Association membership of the likes of the National Farmers Federation can also be a cost-effective way to market your agribusiness. Membership fees are typically modest, and benefits include newsletter subscriptions and membership directory listings. Meat & Livestock Australia even lists consultants that may be able to help an agribusiness with its marketing plans. 

Monitor your results 

The success of your marketing won't become apparent for six to 12 months. At this juncture, ask yourself the following questions:

• Did we sell more?
• Did we make a more significant profit?
• Did our products sell faster?
• Did we retain more customers?
• Did we attract new customers?
• How many leads are in the sales funnel for future conversion?

By monitoring what works and what doesn't work within your marketing plan, you'll be able to evaluate whether the extra sales were worth the cost and effort. 

Speak with the Brentnalls SA team for expert advice on how you can incorporate your marketing strategy into your business planning to help you stay on track to meet your agribusiness goals.

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1. https://www.agriculture.gov.au/abares/research-topics/agricultural-outlook/agriculture-overview#:~:text=Another%20bumper%20year%20forecast,than%20average%20outlook%20for%20spring

2. https://www.professionalplanner.com.au/2017/03/call-marketing-whatever-you-like-just-dont-call-it-optional/

3. https://www.pixelrush.com.au/blog/how-much-should-you-spend-on-marketing/

4. https://wpengine.com/plans/

5. https://www.weebly.com/au/pricing

Disclaimer

The information provided in this article does not constitute advice. The information is of a general nature only and does not take into account your individual financial situation. It should not be used, relied upon, or treated as a substitute for specific professional advice. We recommend that you contact Brentnalls SA before making any decision to discuss your particular requirements or circumstances.