1. Know your place - the second P (aka ‘Distribution’)
HILFN LFA 1.24 and 1.25
Know your place
Know your place - the second P (aka ‘Distribution’)
Jo Hunt
LFA 1.24 and 1.25

2. Your marketing mix – the 5 P’s
Product
Place (i.e. Distribution)
Price
Promotion
People

3. Place… 1: where do ‘my’ customers already/ want to shop?
2: how do different ‘places’ present the produce? What’s the service like? How does shopping there make you feel?
3 : how much of the distribution do I want to do myself?
4: which places charge what price?
5:how much of the price do I get to keep as a result?

4. For starters…. Where do YOU buy your fresh food and why? Financial –
HILFN LFA 1.24 and 1.25
Know your place
For starters….
Where do YOU buy your fresh food and why?
Financial –
do you always shop at the lowest cost place?
Are there hidden costs of buying from different places for you?
Perceptual –
Do you like the location?
Do you like the service?
How does it make you feel?

5. 1: where do ‘my’ customers already/ want to shop?
HILFN LFA 1.24 and 1.25
Know your place
1: where do ‘my’ customers already/ want to shop?
LFA 1.24

6. How can you find out where your customers want to shop; if they’ll buy your product, and how much they will pay for it?

7. Select your top 3 to 5 places …
For you
For your customers

8. 15 local routes to your customer….
HILFN LFA 1.24 and 1.25
Know your place
15 local routes to your customer….
Farmers markets
Farm shops
Gate sales
Local retailer
National small retailer network
Supermarket
Local processor
Co-op contract
Box scheme
Community Supported Agriculture
Mail order
Internet site
Restaurants
Hotels
School contract

9. HILFN LFA 1.24 and 1.25
Know your place
LFA 1.24
2: how do different ‘places’ present the produce? What’s the service like? How does shopping there make you feel?

10. Four ‘places’ that sell local food
HILFN LFA 1.24 and 1.25
Know your place
Four ‘places’ that sell local food
Black Isle Farm Shop
Rosemarkie Butchers
Sutor Creek
REAL market stall

11. 3: how much of the distribution do I want to do myself?
HILFN LFA 1.24 and 1.25
Know your place
3: how much of the distribution do I want to do myself?
LFA 1.25

12. What is a supply chain?

13. Supply chains farmers market, local shop and local group retailer

14. Draw up the supply chain for…
Wester Ross salmon selling:
At a show
On the web
At a supermarket

15. Why sell direct to consumer?

16. Why get someone else to sell for you?…..
Location
Access
Variety
Small quantities
Customer service
Promotion
Final pricing decisions
Customer focus

17. Which supply chain suits local fresh food?
Short supply chain
Long supply chain
Industrial products
Consumer products
Services
Tangible goods
More control required
Less control required
Larger purchases/ fewer customers
Smaller purchases/ lots of customers
Bulky, perishable products
Cheaper, standard, non-perishable

18. Will you get others to sell for you?
Risk
Who will set price – you or retailer?
Do consumers pay for - service or raw product?
Who controls how much shelf space you get?

19. List for your 3 to 5 selected outlets
Tasks you will do yourself?
Produce
Grade
Package
Label
Sell
Dispatch
Deliver
Invoice/ cash
Keep in touch
Tasks you will pay others to do?
Produce
Grade
Package
Label
Sell
Dispatch
Deliver
Invoice/ cash
Keep in touch

20. 4: which places charge what price?
HILFN LFA 1.24 and 1.25
Know your place
4: which places charge what price?
LFA 1.25

21. rank all 15 from highest consumer price to lowest?

22. 15 local routes to your customer….
HILFN LFA 1.24 and 1.25
Know your place
15 local routes to your customer….
Farmers markets
Farm shops
Gate sales
Local retailer
National small retailer network
Supermarket
Local processor
Co-op contract
Box scheme
Community Supported Agriculture
Mail order
Internet site
Restaurants
Hotels
School contract

23. 4 very different pricing strategies?
HILFN LFA 1.24 and 1.25
Know your place
4 very different pricing strategies?
‘Benchmark’
‘Costs plus’
‘It’s made already’ (aka ‘dumping’)
‘Fairtrade’

24. Carrots (via a supermarkets…)
HILFN LFA 1.24 and 1.25
Know your place
Carrots (via a supermarkets…)

25. Seasonal veg (via a community growing project)
HILFN LFA 1.24 and 1.25
Know your place
Seasonal veg (via a community growing project)

26. ….cheese and year round veg (via CSA membership)?
HILFN LFA 1.24 and 1.25
Know your place
….cheese and year round veg (via CSA membership)?

27. Which ones are most profit sensitive (most likely to be affected by outside cost changes)?
Which ones are most likely to be price sensitive (customers stop buying if you change the price)?

28. 5: how much of the price do I get to keep?
HILFN LFA 1.24 and 1.25
Know your place
5: how much of the price do I get to keep?
LFA 1.25

29. Gross margin =
sales (price x volume) –
transaction costs (what you pay to others to sell your product + additional production costs)

30. % age return on selling veg….
Farmers market
Local retail
Retail chain
Sales (Price x volume)
- Wholesaler margin
- Retailer margin
- Promotion costs
- Premises costs
- wastage
- Additional production costs
Your gross margin

31. Which sales routes will you use?
HILFN LFA 1.24 and 1.25
Know your place
Which sales routes will you use?
Short
Who will do the work?
What volume can you achieve
Long
What %age margin will you get

32. You are in control…. You choose which outlets to use
You plan the volume of sales each year
You choose how much time you spend with customers
You choose how much control you have over price, customers and their sales reaction
And you have to live off what’s left… the profit.

33. Quick review… Are you confident to have a go at:
Assessing 4 or 5 potential local outlets
Selecting the outlets you will use
Describing the roles you will play and those you will pay others to do
Estimating the %age return you will get