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Strategic Marketing: The Importance of Innovation and Relevance Annual Agricultural Outlook Kennedy Hall December 10, 2002 Brian M. Henehan, Senior Extension.

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Presentation on theme: "Strategic Marketing: The Importance of Innovation and Relevance Annual Agricultural Outlook Kennedy Hall December 10, 2002 Brian M. Henehan, Senior Extension."— Presentation transcript:

1 Strategic Marketing: The Importance of Innovation and Relevance Annual Agricultural Outlook Kennedy Hall December 10, 2002 Brian M. Henehan, Senior Extension Associate Department of Applied Economics and Management Cornell University

2 Todays Objectives zBrief Review of Research Focusing on Consumer Attitudes Toward Processed Apple Products zSummarize Key Results zDiscuss Implications for Keeping Products Relevant to Todays Consumers zReview Need for Ongoing Innovation

3 Project Backgroound zProject Involved a Multi-Disciplinary Team at Cornell Ithaca Campus and at Geneva over three years: 1999-01 zAEM Was Responsible for Marketing Research Component zAcknowledge Contribution of Colleagues: yKristin Rowles yGerry White

4 Marching Orders from Advisory Council zNeed to be Forward Looking zDont Duplicate Whats Already Been Done zProduct Concepts Have to Be Relevant to Todays Consumers zMaintain a Focus on Strategic Issues

5 Marketing Research Overview Market Analysis Marketing Research Plan Primary Research Reporting Industry Overview Outreach on Marketing New products workshop, hard cider & apple wine, apple juice and cider Advisory Council, literature survey, processor survey, universe of products, foreign markets Natl consumer survey, consumer & foodservice focus groups, school foodservice survey Industry meetings, articles, final report, website Identify objectives and methods, input from advisory council, select moderators Smart Marketing columns, assistance to commercial partners, training for food entrepreneurs

6 Methods zExtensive Review of Current Research zProcessor survey zFoodservice focus groups and interviews zSchool foodservice survey zNew product development workshop zNational consumer survey zConsumer focus groups

7 Successful Marketing The aim of marketing is to know and understand the customer so well that the product or service fits them and sells itself. Ideally, marketing should result in a customer who is ready to buy. All that should be needed then is to make the product or service available… - Peter Drucker

8 Consumer Survey Methods zTelephone survey zSample of 1,011 women yage 18 and older yprivate households ycontinental U.S. zConducted September 21-25, 2000

9 Consumer Survey zA limited number of broadly appealing apple products indicates a need for new product development. zPurchase of apple products is greatest in households with children. zAfrican American and Hispanic American households have a high incidence of apple juice purchases zThese households are likely to be the best target for new apple products.

10 Consumer Survey zFamilies with children and African American and Hispanic American households showed an interest in the following new product concepts: xSnack packs with pre-sliced apples(caramel dip, cheese, crackers) xApple juice & spring water beverage for toddlers xPre-sliced apples for eating & cooking xApple juice spritzer (non-alcohol)

11 POP Quiz zHow Many of You Have Purchased Fresh Apples or Apple Products Over the Past 30 Days? zHow Many Have Purchased Fresh Cut Fruits or Vegetables (baby carrots, salad)? zHow Many Eat Fresh Apples Cut Into Slices? Whole, Uncut?

12 Consumer Focus Groups zSix groups, two each with: yWomen with children under 6 yWomen age 50-69 yWomen age 25 - 49 who drink wine zEight participants per group zGroups held in Manhattan and Paramus, NJ

13 Focus Group Discussions yUse of fresh fruit yUse of fresh apples yPerceptions of apples yUse of processed apple products yPerceptions of apple products ySampling of products yConsumer Recommendations

14 Consumer Focus Groups zConsumers know that apples are good for you and good for their children, but they are not sure why. zConsumers perceive fresh apples as a traditional fruit that they want their children to grow up with. The traditional appeal of apples is important in promoting fresh apples and apple products.

15 Consumer Focus Groups zSome mothers are concerned or confused about whether their young children should consume full-strength apple juice. zExpansion of current apple product consumption may be limited by a narrow range of available products and a perception of limited menu compatibility. New product development could help to add new choices and to enliven consumer interest in apple products.

16 Consumer Focus Groups zFocus group participants reacted enthusiastically to samples of sparkling hard cider and spicy apple butter. zConsumers are concerned that processed apple products may not offer the same level of nutrition as fresh apples, and they are cautious about eating processed products that they perceive to contain added sugar, high levels of fat, and added preservatives or chemicals.

17 Consumer Focus Groups zConsumers may be interested in apple products with new variations on flavors. z Fresh apple slices and baked apple chips were also well received by focus group participants. Focus group discussions point to an unfilled need in the market that pre-sliced apples may fill. These consumers appear to favor a sweet tasting slice.

18 Maintaining Product Relevance zUnderstanding What Is Relevant to Todays Consumers zPrimary motivators of todays consumers: yconvenience, ywellness, ysafety, and ygratification.

19 Understanding Consumers zTarget Group zYounger zFemale zEthnically Diverse zUrban zEats Away From Home zSeeks Convenience & Gratification z Decision Makers z Older z Male z White z Rural z Eats Home Cooked Meals z Traditional Preferences

20 Why Innovation? zKey to Staying Relevant zResearch and Development yNew Products zCreate Lower Cost Structure yTechnology zContinuous Innovation Needed: Production, Processing, Distribution, Marketing

21 Role of this Research zTo act as a catalyst for innovation in the market zTo stimulate interest in new product concepts and new markets zTo analyze the competitiveness of the regional industry zTo provide assistance to commercial partners zTo complement, not duplicate, on-going market research in this industry zNOT to Provide a Magic Bullet

22 Remaining Strategic Questions zApples and Apple Products Retain Positive Image zPerceived as Healthy Choice zInterest in New Product Concepts zMore Resources Needed to Keep Products Relevant zContinuous Innovation Needed

23 Publications zProcessed Apple Product Marketing Analysis: Hard Cider and Apple Wine, Staff Paper 2000-06 zAdapting to Changing Markets with New Products, Smart Marketing Column, March 2000 zAre Your Products Relevant?, Fruit Grower News, October 2000 zMarket Research for New Products, Smart Marking Column, September 2000 zMarketing Apple Products, New York Fruit Quarterly, December 2000 zProcessed Apple Product Marketing Analysis: Apple Juice & Cider, Staff Paper 2001-01 zNortheastern Apple Processors: Situation and Outlook, Staff Paper 2001- 02, February 2001 zThinking Afresh About Processing (Final Report), Staff Paper, available late June 2001

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