The subject of generic promotion is one that often raises its head at grower AGMs around the world, and in the grape sector this is no exception.
In reality, the grape industry is no different from many other commodity groups that want to see exports increase in terms of both volume and value in the face of immense international competition and demanding retail customers in sophisticated retail and foodservice markets.
Many have asked the question: “Why are we doing this and what are we getting out of it?” That is of course a legitimate question to ask, and it is only right that it should be asked from time to time. Most suppliers around the world have got involved in this sort of activity at some stage in the past, and the provision of promotional support has become almost an expected part of the overall service package that major retailers now look for from suppliers.
Generic promotion can be very expensive; it can be difficult to see the clear results of monies spent, and it can be difficult to justify to other stakeholders. While the questions are often straightforward, the answers are less so. What we have seen is that it is very easy to spend quite large sums of money on a wide range of activities and still be left with a feeling of dissatisfaction.
The really clever organisations have found a way of spending less, but by doing their homework have found much greater degrees of success. But in our experience the following criteria have to be in place if any export organisation is going to achieve what might be perceived as “value for money” for growers, packers, shippers and importers, let alone the retailer... and, by the way, the consumer is meant to see some benefit too.
Here are what I see as some of the golden rules:
• Decide on the key constraints: look at the big picture. What is it that is stopping you selling more into the market? What can you directly influence, and what can you not influence? Make sure that you link all you do in terms of promotional activity to overcoming that constraint. Do not be distracted into other non-essential activities. Only by looking at the big picture will you be able to see any significant progress over a period of time. Generic activity aimed at the micro issues will not succeed.
• Define the target market: too many export organisations do not drill down to what it is they are trying to do, and who they are trying to communicate with. There is no point in talking about “influencing European consumers”; there are 350 million of them, and you need to be clear about which ones you are looking to target, which geographic markets, which age groups and what consumer habits you are looking to change. The more closely you can drill down the target the more likely you are to succeed. Drill down how you get to them. Which retailers, which importers? Don’t be vague on detail.
• Follow the market: trying to promote varieties of fruit that customers or consumers don’t really want is like pushing water uphill.
Promote the right product at the right time of the year. Promotion never really works well when you are looking to get rid of excess fruit, for whatever reason. Promote the top quality you have and don’t see it as a route to dump excess produce, or other produce that is not top quality. Generic promotion often by its very nature has to help the whole of the industry rather than just bits of it. This can be a tough call, but it is important to look at the strategic issues here.
Promoting the products that you want to might not always be in line with what key customers want to do. But there might be other benefits to be gained here, and the industry itself has to benefit. It might also act as a stimulus for internal change, and this cannot be a bad thing.
• Be patient: any promotional activity is looking to change the behaviour or attitudes at some point in the supply chain, be it the importer, the retailer or the consumer. Changing attitudes and consumer behaviour takes time. Expecting to see huge quantum leaps in the short term is unrealistic.
• Be realistic: you are looking to change behaviour; there has to be a minimum threshold for this to be achieved. A budget that is not at this sort of level will not be successful no matter how hard you try. It doesn’t have to be massive, but without some form of critical mass, success will always be limited.
• Keep a grip on reality and keep the faith: no one has to know how much budget you have and how you are allocating this. The money in effect is yours, and how you choose to spend it is up to you. If you are seen to be handing it over without a few strings attached, then you will get what you deserve from others, both internally and externally.
At the same time, don’t get carried away. Look at the turnover on fruit of some of your major customers. If you are lucky you might be one per cent of their business - don’t flatter yourself that they could not survive without you. In the circumstances, does giving support to key customers make sense? But if you don’t, someone else probably will.
• Do what you are good at and leave other things to those who can do them better: the world is full of amateur PR execs. Stick to the growing and packing side of the operation. By all means get involved in the other activities, make an input and express an opinion. But leave the implementation of the programme to those that probably have more time, expertise and skill to offer. Be prepared to delegate, but never abdicate responsibility.
• Involve the full supply chain: trying to do all this on your own is very hard work, and expensive. Most successful promotions have involved contributions from everyone in the supply chain, where it has been agreed in advance what is going to happen, when it is going to happen and who is going to contribute what.
The full supply chain all pulling in the same direction to the same end has a much better chance of making this work. If your supply chain is not pulling in the same direction for the rest of the year, don’t expect it to all come together like magic at the time of year when you want to promote.
• Stick to your guns, but be flexible: once you have decided on what it is you are really trying to do, be prepared to stick at it. Chopping and changing the basic strategy will always see the effectiveness reduced. Change the short term tactics if you have to, but leave the underpinning strategy alone for a while. Do not fall into the trap of revamping the whole programme every year, but if something is clearly not working then be prepared to change too. Understand why you are changing it though, rather than succumbing to knee jerk reactions, and if you are changing something, make sure that it is for something better.
• Be prepared to learn: you will often have a good idea of whether a programme is going well or not. But be prepared to use external resources at some stage to give you an independent view and feedback. We are all very capable of believing what we want to believe, and a reality check can be extremely useful. Once you have got your internal or external feedback though, be prepared to use this to change what you are doing.
Many organisations seem to fall into the trap of “we do this because we always do it”. Keep the programme fresh, and incorporate new research findings as and when you can.
The key thing to remember is that no promotion can ever cover up any weak links in the service package: good promotional work adds to a good service package. If you have good fruit, the right variety, good packaging and logistics and the right price for the market and have thought through what it is you are trying to achieve, then you have a chance of success. If your service package is weak, then you can allocate as much as you want to promotional work and you will never achieve the full impact. Promotional activity might actually expose your weaknesses even more. Promotion is very much part of the service package, and not a replacement for it.
However, done well and underpinned by sound and logical rationale to address the big picture issues that exporters face, it can make all the difference, and importer, retailer and consumer behaviour can be changed over a period of time. In a harsh operating environment most of the leading UK and EU retailers are motivated by seeing their categories grow in terms of both volume and (especially) value. Those organisations that can help them achieve this are in a good position to reap the benefits in other ways and then share these with others in the supply chain.
Promar International is a leading agri food consulting firm operating across the value chain. The company has carried out a good deal of work in the fresh and processed produce sectors for clients in the UK, other EU markets, Africa, Latin America, the Middle East, the US, China and other Asian markets. John Giles has been with Promar for some 12 years, and can be contacted at the following email address: jgiles@promar-international.com
No comments yet