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Agrimarketing : March 2012
March 2012 Agri Marketing 23 In "My Big Fat Greek Wedding," when Gus Portokalos is confronted with any skin ailment, he says, "Put some Windex (on it)." For Gus, Windex is a wonder-drug for external use against most every non-life-threatening illness. He isn't the average customer. His Windex example is an extreme --- and possibly dangerous --- one! But you don't always know what your customers are doing with your products. And if you ask them, you might be surprised by some of their answers. Take the results of a 2011 Purdue University survey focusing on dairy product purchases, which asked consumers about their use of milk. A thousand people answered the survey. The average number of adults and children in a household from the study was 1.97 and 0.56, respectively. On average, households spent $110.13 per week on total food consumption, including both at-home and away-from-home purchases. Consumers reported that equal percentages of fluid milk were consumed as a beverage (34%) and in conjunction with cereal (34%). Cereal and milk is not a far-fetched concept --- it's not like people were pouring milk into their gas tanks --- but the study showed that one-third of fluid milk purchased is consumed with cereal --- much more than we, the researchers, expected. Cereal and milk go hand in hand --- and understanding the products' strong connection can be exceedingly helpful in marketing and positioning milk in the store. Perhaps people are not doing exactly what you think they are with your products, either. Are you actively asking your customer, whether that be an end consumer or another business, how they use your product (or service) in their operation? You may be missing opportunities to develop information and sales around their non-traditional uses. COMMUNICATING INFORMATION Our survey also showed that your customers may want more information from you. Consumers are increasingly interested in how, where, when and by whom their household goods are produced. They want to know what you're doing with your product, before it even gets to them. This trend is evident in consumers as they purchase food and household goods, but consider whether this increased focus on additional product information is also apparent in business-to-business sales. Are your customers placing higher value on understanding your processes and having more information about your products? If so, you should effectively deliver that information to your customers and capture the associated value. PRODUCT LABELS Thirty-four percent of survey respondents felt that too little information is provided in current labeling and nutritional information. Do you know what information your customers most value on your product labels and other informational materials? It may not be enough to just put information on packaging. Your customers care about where information comes from and consider whether they think an information source is accurate. In our study, U.S. federal government agencies were clearly viewed as the most accurate source for food safety and quality information. Consider whether product information provided by a different source than you currently use would create more value. It's possible that you and your customers have differing views on who should provide or verify product attributes. To truly understand your customer, you must know how they intend to use your product, as well as the attributes they are looking for in the product and in information surrounding its manufacture. Understanding consumers' use of the products you sell can help you better position your products for future sales. It's easy to take for granted that you know how your customer values your product and how they use it. It may be worth investigating whether you are failing to capture additional value that could be created by providing information differently, verifying information through a third party or learning something from your customers regarding a use --- or a variation of a use --- of your products that you were not even aware of. Hopefully your customers don't take Portokalos's approach to creative product use, but even if they did, would you ever know? AM Nicole J. Olynk is an Assistant Professor of Agricultural Economics at Purdue University. She can be reached at email@example.com. Melissa G.S. McKendree is a Research Associate at Purdue University's Center for Commercial Agriculture. She can be reached at firstname.lastname@example.org. Kristyn Kapetanovic is the Marketing Assistant at Purdue University's Center for Food and Agricultural Business. She can be reached at email@example.com. UNDERSTANDING YOUR CUSTOMER by Nicole J. Olynk, Melissa G. S. McKendree and Kristyn Kapetanovic Insights from Purdue University SEMINARS Upcoming Agribusiness Center for Food and Agricultural Business Sales Management and Leadership June 6-7, 2012 Agribusiness Finance for Non-Finance Managers June 18-21, 2012 Learn more at www.agecon.purdue.edu/cab
January February 2012