Potato Grower

August 2016/IGSA

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30 POTATO GROWER | AUGUST 2016 30 POTATO GROWER | AUGUST 2016 160938TriSte112.indd 1 6/27/16 8:44 AM Remember the four points of successful marketing? 1. Develop a worthy product; 2. Determine the product's economic viability; 3. Identify the best distribution channel to reach the ultimate consumer; and 4. Develop a marketing strategy that converts the customer into a loyal (repeat) user of the product. The guy who invented Cheerios had a hit on his hands if only he could master these four points of market dynamics. Let's take them one at a time. POINT 1 Had he developed a worthy product? Clearly, Cheerios were tasty, nutritious and safe, but did he have a truly competitive product with what was already out there? Because corn flakes and wheat flakes formed a soggy clump in the bottom of the bowl the moment milk hit them, and because his doughnut-shaped oat product did not, yep, his product could compete. POINT 2 Was his product economically viable? Said another way, would production costs price his product out of a market already filled with corn and wheat flakes? Nope. That wasn't the case either. Oats were cheaper to buy than corn or wheat, and the process of forming oats into little round 'Os' cost less than grinding corn or wheat into a paste and then smashing the paste into a sheet and cooking it. POINT 3 How about finding a distribution channel to reach the ultimate consumer? Happily, the rival Kellogg Company had already blazed that trail with their wheat flakes. Not only had they blazed the distribution trail, they had also blazed the consumer trail. They had introduced the concept of pouring milk into a bowl of their product, sprinkling some sugar on it, and eating away. No need to fire up the stove, and consumers loved the idea. POINT 4 He had to develop a marketing strategy that would convert the consumer into a loyal user of his product. This is where Cheerios Guy really shined: Within months of its introduction, he had changed the original name from Cheery Oats to Cheerios, and a clever picture of children eating little floating Os rather than soggy flakes landed Cheerios right in the middle of the American breakfast table, where it remains to this day. But here's the trick: While a lot of breakfast cereals have come and gone, have gained and lost huge chunks of market share, Cheerios has remained remarkably stable. Why? PROSPERITY BECKONS Good marketing equals good money United Potato Growers of America Jerry Wright President & CEO General Mills owns the Cheerios brand. As potato producers, marketers, and salesmen, how does our performance measure up with their management of Cheerios? Said another way, as managers of our product, what kind of job are we doing mastering marketing's four points? 1. Do we have a worthy product? Absolutely. 2. Is our product economically viable? Absolutely; on average, it costs about $0.14 per pound to produce, pack and sell. It costs General Mills about 10 times that amount to produce one pound of Cheerios, and Cheerios' nutritional value doesn't come close to potatoes'. 3. Have we identified the best distribution channel to reach the ultimate consumer? Again, absolutely! 4. Have we developed a marketing strategy that converts the customer into a repeat user of our product? Honestly, while most consumers are already loyal customers, we can always use more. While Cheerios makes money for General Mills every day, week, month and year, why don't fresh potatoes do the same for the farmers who grow them? First, Cheerios is a unique product that has not been commoditized. Second, General Mills had the foresight to create a brand that supported their unique product in the market. And finally, General Mills has the good sense to balance supply with demand.

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