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Marketing in a Browsing Society (Part 1 of 4)

Posted on March 28 2014 | Author: Admin

The 4 p’s of marketing
The four p’s of marketing are as fundamental to the practice as are basic accounting principles to the discipline of finance. Also known as the “marketing mix”, the 4 p’s of marketing are familiar to those with formal marketing training, yet tend to be relatively unknown amongst practitioners in other fields of business.

Place Product Price Promotion

First conceived in the 1960’s by academic Jerome E. McCarthy, the 4 p's of the marketing mix have been known to swell to eight in number and more, with suggested candidates such as people, policy, processes, programs, patrons, performance and even politics. However, after scrutiny, debate and evaluation, the academicians and more skilled practitioners concur that any additional p’s are truly subsets of one of the original “fab four”. The experts further conclude that the addition of more p’s to the marketing mix would obscure the four-way dynamic and interconnected synergy that is the aim and prospect of a well-designed marketing mix. Similar to the four essentials of a shelter - foundation, roof, side and entrance – each of the 4 p’s has a distinct composition, requiring quality material and skilled workmanship to function at full potential.

Composition of the four cornerstones
A detailed look reveals the independence as well as interconnectedness of each p, as follows: Place: location (region or nation? urban or rural? concrete or virtual? a retail lease on main street or in a mall?); competitors; regulations; distribution; customers; consumers; population density; climate. Product: composition; brand name; quality; after-sales service; packaging; site or country of manufacture. Price: costs; revenue; profit margin; breakeven; taxes. Promotion: personal selling: in-store salesperson, commercial sales representative, online sales; sales promotion: trial offer; introductory or competitive price discounts; public relations: press coverage, social media, community involvement; advertising: website; commercials; brochures.

Which p is the hardest to change?
The 4 p’s and the marketing mix are not exclusive to business. Public sector entities, educational institutions, healthcare facilities, associations and NGO’s all have the 4 p’s, knowingly or not. When refined, the marketing mix works like a four-sided, multi-pronged tool, modified and fine-tuned to suit the needs at hand.

The mantra of “location, location, location” is an expression of this fact. Get it right, and the overall mandate is easier to deliver. If out of sync, the other 3 p’s are compromised; disproportionate resources and efforts are expended to balance the mix.

The hardest p to change, is that which continues to change most rapidly
In a browsing society, by necessity, each p of the marketing mix has a virtual online presence, either with or without a concrete, bricks-and-mortar equivalent. While place is the hardest p to change, every organization faces a virtual place in either a state of flux or perpetual re-creation. Prices can be quickly compared – and changed; product manuals are posted or downloadable; websites are, as has come to be expected, a 24/7 salesforce; online point-of-sale is becoming increasingly commonplace.

Some food industry virtual statistics
Stats Canada reports that 18% of internet users regularly buy groceries online, twice the 2010 statistic.  Online wine and beer sales in Canada and liquor sales in the USA are thriving. A UK online grocery guru predicts the tipping point – online versus store – will occur when online prices are discount to those in-store. If so, convenience stores are anticipated to boom as the source of mid-cycle replenishment while conventional grocer outlets will diminish.

Carol T. Culhane, PHEc, MBA
President, International Food Focus Ltd.
Bioenterprise Regulatory Advisor

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Scaling-up a Food Processing Business – What do You Need to Consider?

Posted on March 12 2014 | Author: Jessica Taylor

Starting a new business can be a daunting, and difficult, process. Food processing companies in particular are faced with many regulatory requirements and potential barriers that must be considered in order to be successful – but what happens once your company becomes successful? How do you expand? How do you scale-up your production and sales? What is required to export your product to other areas of the world?

These are just a few of the many considerations that entrepreneurs need to keep in mind as their food processing business begins to grow. While many of the answers to these questions are dependent on the specific company and their product(s), there are some general guidelines that companies can follow as a starting point for successful expansion.

Getting Started

Funding is often a major obstacle for small companies looking to expand their business; however, there are a number of funding programs that exist to help companies in this position. There are a variety of funding programs available through both the federal and provincial governments to help these business grow and to improve the Canadian economy.

The Canadian government, in conjunction with the government of Ontario, offers guidance through a website called AGPAL that enables individuals and companies to find programs and services provided by both levels of government, specifically within the agriculture sector.  AGPAL is an online search portal where companies can enter their funding needs (i.e. “Business growth, planning & start-up”) and the sector their company falls under (i.e. “Agri-businesses or food processors”) to find a list of possible funding opportunities.

Additionally, Growing Forward 2 (GF2) was launched April 1, 2013 and is a three billion dollar investment into agricultural programs and services for the next five years, funded by federal, provincial and territorial governments. GF2 has both federal components offered through Agriculture Agri-Food Canada (AAFC) and a host of programs through the provincial government.

Finally the Ontario Ministry of Agriculture and Food (OMAF) website includes a list of funding sources that may be applicable to many food processors that can be found here.

Obtaining insurance for a food processing business is very important. The Insurance Bureau of Canada provides helpful information regarding insurance for businesses of all sizes (http://www.ibc.ca/en/Business_Insurance/).

Manufacturing the Product

Facility Requirements
As your business begins to expand, the where and how the product is manufactured may also need to change. Food processing facilities must meet a variety of requirements; within Ontario these include Food Premises Regulation 562 and the Food and Drug Act if the goal is to sell the product nationally or internationally. These regulations must be met regardless of whether the company chooses to build a facility, lease a facility or employ a co-packer.

Food Safety and Quality Control
Food safety and quality control programs are usually put in place to meet market demand (i.e. many retailers won’t sell a product unless the company can guarantee a certain level of food safety). The levels of food safety are: (1) Good Manufacturing Processes (GMP); (2) Hazard Analysis Critical Control Points; (3) Traceability Plan; (4) Global Food Safety Initiative (GFSI).  Being aware of the requirements of your specific distributor and/or vendors is critical in the development of these plans.

Labelling Your Product

Health Claims
Health claims are an excellent marketing tool for your product regardless of what development stage the company is in; however, it is important to understand all of the regulatory considerations prior to using a claim.

The Food Directorate of Health Canada is responsible for creating standards, policies and regulations surrounding the use of health claims on foods. They also conduct both mandatory and voluntary pre-market approval of health claims to assess if these claims are both truthful and not misleading.

The Canadian Food Inspection Agency provides an outline of the requirements for health claims on Canadian food products in the Guide to Food Labelling and Advertising, Chapter 8.

There are a number of different certifications that food processors can get for their product. A certification can give a food product a competitive edge by opening the product up to more markets and/or improving the consumer’s perception of the product. Gluten-free, halal, kosher, organic, vegan and vegetarian are just a few of many certifications that can be considered. Connecting with the appropriate certification body as early on in the product development stage as possible can make the certification process much easier.

Distributing Your Product

Once your product(s) is market-ready you must be able to distribute it to vendors and consumers. This can be achieved through use of a broker, distributor or wholesaler. Additionally, as your food processing company continues to grow you may consider exporting your product(s) to new markets. In order to do so your product(s) must meet requirements of the country to which it is being exported (i.e. if exporting to the US the product must follow all labelling regulations set out by the Food and Drug Administration (FDA)). If you are interested in exporting your product(s) it is recommended that you connect with an importer or distributor in the country that you wish to export to. For assistance in connecting to an importer or distributor contact Ontario Food Export (a division of the Business Development branch of OMAF).  

Next steps…

Exploring these general guidelines is a great start on the road to growing your food processing company. From here, making connections to experts in each of these areas will help to guide your decisions from the very start, allowing the process to run more smoothly. Bioenterprise has created a document outlining these regulatory considerations in greater detail, along with providing additional contacts in this space. Should you wish to acquire a copy of these documents please do not hesitate to contact us.

Jessica Taylor
Junior Business Analyst, Food Nutrition & Health

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