Direct Marketing and Selling Training Course - Malta May 2018

1. PILOT TRAINING COURSE Malta 14th - 18th May 2018 Call:2016 - 2016-1-IT02-KA204-024381KA2 - Cooperation for Innovation and the Exchange of Good Practices-Strategic Partnerships for adult education Direct Marketing and Selling Dr Javier Morales Luque

2. Introduction • Aim: Direct Marketing and Selling are two new waystomaximizethebenefit of europeanfarmers • LearningOutcomes: Direct marketing, directsellingadvantages and disadvantages of direct marketing • Objectives: • Describe theadvantages and benefits of thedirectsellingforfarmers • Learnhowtoadquirethebenefits of directselling. • Learningmethod- selflearning

3. Summary • Direct Selling • Reasons for direct selling • Essential information for farm direct marketers • Advantages of direct selling • Links between rural development and direct selling • Types of farm direct selling • On farm direct marketing models include • Consumer trends affecting farm direct selling • New Markets • Types of direct farm selling

4. 1. Direct selling Consumer demand for fresh, local food products along with the potential for increased farm income have led to a dramatic increase in direct marketing of farm products. Direct marketing has become a highly effective way for small-to-medium sized farms to achieve economic sustainability

5. 2. Reasons for direct selling CONSUMER One is dissatisfaction with farm commodity prices. The farm price is often only a fraction of the retail food price. Prices for produce sold directly to consumers can be substantially higher than typical wholesale prices. Another reason is that producers value the relationships they form with the consumers, as well as the opportunity to receive immediate feedback on their products. Consumers value the fresh, quality products along with the opportunity to support local producers. PRODUCER As for farmers, direct selling can be interpreted as a diversification strategy that can lead to higher profits and better farm household incomes.

6. 3. Essential information for farm direct marketers There are essential pieces of information that all farm direct marketers should develop and use to help promote their businesses. They are: • Business cards • Price lists • Product information sheets that list the varieties grown and provide some basic information about how the products are grown • Quantities and quality • Preparation tips and/or recipes • Website

7. 4. Advantages of direct selling • Direct selling is a commercial activity made by local farmers who utilise communication skillsthat make the purchasing experience of the consumers enjoyable and memorable. • The key to direct sales is mutual advantage, (producer and customer are winners) • Selling direct to consumers is one opportunity for farmers to increase their share of the consumer.

8. 4. Advantages of direct selling • Direct selling allows farmers/producers to avoid expensive overheads, reduce advertising costs and run producer’s businesses flexibly. • Decreasing production costs, direct sales allow farmers to bypass middleman in the distribution chain. • The absence of intermediaries, make high quality products moved by means of direct channels generally cheaper for consumers.

9. 4. Advantages of Direct Selling • It augments farmers’ income and reduces claim for social benefits in rural areas • It heightens the market share of rural areas in the food chain and in services • Farm marketing assists local job creation • It increases the value added of the products • It differentiates and enlarges the supply of the products • It helps farmers’marketing orientation • It improves farmers’bargaining position • It increases consumers’ trust and affects public opinion • It respects environmental and animal welfare requirements • It promotes the development of rural tourism • It can reduce the need for and the costs of transportation

10. 5. Links between rural development and direct selling Direct selling provides a link between urban consumers and rural food producers. It also contributes to the rural economy by providing alternative marketing channels. Less and less of our population lives on or even visits a farm. By adding a recreational component to food consumption, many farm direct marketing enterprises draw urban people to farm communities where they experience a farm atmosphere and spend additional dollars on food, speciality items and other services. This supports sustainable communities. Diversification of farm activities contributes to the well-being of local people in rural areas. These activities contribute to increased employment and to the development of manufacturing and service activities of complementary/ outside worker jobs, in commerce, and tourism. Such activities may also foster cooperation among many other sectors of the economy.

11. 6. Types of farm direct selling • Person-to-person sales - arranging individual appointments with customers • Door-to-door sales - approaching homes and businesses by appointment or unannounced to leave catalogues and offer products • In-home presentations- arranging parties and at-home gatherings to present products (often called 'party plan') • Online shopping - using websites and email lists to build customer networks • Venue sales - setting up booths or kiosks at events to generate new leads and promote and sell products • Network marketing - recruiting other sellers into a network to 'duplicate' your product sales role, earning a percentage of their sales revenue.

12. 7. On farm direct marketing models include On-farm activities: • Roadside/Farm Gate, • Farm Store/Market, • Pick-Your Own • Community-Supported Agriculture (On-Farm Pick-Up) • Run by groups of farmers or local traders

13. 7. On farm direct marketing models include Off-farm activities: • Farmers' Markets, • Co-operatives and farmer associations, • Municipal buying clubs, • Agri-tourism, • Gift baskets and mail-order, • Annual events, such as local food festivalsspecialising in organic food or other products • E-commerce and internet sales, • Direct sales to restaurants, • Delivery to specialty shops and restaurants, • Internet - Online Direct Order, • E-commerce

14. 8. Consumer trends affecting farm direct selling Consumer preferences and market trends are changing day by day because of changing demands for natural and organic products. Consumers want to know where their food comes from, how it is grown and the people who produce it. A growing number of health-conscious consumers are willing to search out and pay extra for foods they believe to be fresh, nutritious and wholesome. Others are interested in eating regional cuisine – local food that is picked and prepared at its freshest. This trend is reflected in foodservice as an increased demand for old-fashioned, comfort foods with a gourmet twist. These consumer demands are driving farm direct marketing.

15. 8. Consumer trends affecting farm direct selling Consumers are concerned about: • Convenience – great tasting foods to be consumed on the go • Family – they want family friendly activities in which everyone can participate • Community – they support local business • Balance – they want balance between work and family • Authenticity – they look for the simpler things in life • Security – they want to deal with people they know and trust

16. 9. New Markets • Baby boomers • Individuals • Blended families • Health correction, e.g. Weight loss • Ethnic, e.g. Asian, Italian • Organic • Students • Vacation home owners/fun seekers As consumers look for convenience, health, flavour and fun, we see the emergence of new markets:

17. 9. New Markets • Is safe to consume and aren’t harmful to one’s health, • Is of proven origin, and their producer is authentic, • The consumption of which is delightful, • And the production of which suits the growing aspects of the environment and animal welfare. Today’s consumers are searching for food that:

18. 10. Types of direct farm selling Farm shops/ farm markets: The types of farm store/markets range from seasonal to a full-functioning, year-round country store, offering consumers an alternative to the supermarket. Success often depends on good research into the local market, products and ways to develop customer loyalty. To be considered a farm shop, you should aim to sell fresh produce and/or local foods that are normally grown, picked, reared or produced on your farm or on land close to where the shop is located. Pick-your-own/ U-Pick marketing: These were very popular in the 1970s; those remaining have become unique and different. Many have added "edutainment" or "agritourism" targeting school groups and families or have expanded into special interest markets such as corporate picnics, film companies, etc.

19. 10. Types of direct farm selling On-farm stands: There are several different ways to operate an on-farm stand, ranging from simple, self-serve stands to elaborate roadside attractions. Self-serve stands require very simple and clearly written directions for the customer to follow, and a slot-drop box, preferably locking, for payment. Some key elements for success in marketing with this method are: refrigeration (keeps your product fresh); clearly written, eye-catching directional signage with dates and times of operation; convenient access from a main road, and ample parking. Roadside/farm gate:  An entry-level approach to direct farm marketing involving little capital investment, roadside/farm gate sales can be as simple as a wagon or as elaborate as a small shed located at the end of your driveway

20. 10. Types of direct farm selling Co-operatives and farmer’s aasociations Co-operatives and associations are organisations owned and operated by a group of people with similar needs. A co-operative may be established by a group of people producing the same products as a way to market their products together at an overall lower price. It may also mean that with increased volume, co-operatives can enter markets that they were unable to penetrate on their own. A co-operative may also pack, store and ship a product. Farmer’s Market A farmers' market is a gathering of several producers on a regular basis to sell a variety of locally produced fruits, vegetables and other value-added farm products directly to consumers. Farmers' markets are commonly held on weekends throughout the metropolitan area and in many towns, which may require travel.

21. 10. Types of direct farm selling Gift baskets: This method of marketing can be a sideline to a farm store or operate on its own. Since both gift basket and mail order sales are built on repeat business, it may take years to build a substantial income. Start slowly by offering gift basket or mail order sales in addition to existing market outlets. Gift baskets work best with products that can be attractively displayed. Often price isn’t as important as quality and uniqueness. Mail order items are usually non-perishable products that can be easily packaged and shipped. Both options require high quality products, packaging and customer service. e-commerce- internet - online direct order (mail-order): The use of the Internet and online direct ordering is increasing. It requires background research and development. It can build customer loyalty for products and is not limited to time, space or geography.

22. 10. Types of direct farm selling Agri-tourism: Also known as “entertainment farming”, agri-tourism is becoming a popular way to attract customers and bring more income to the farm. Tourists today are considered “knowledge seekers” and many are visiting places closer to home. They are seeking authentic experiences of farm life. Cultural heritage and eco-tourism are the fastest growing sectors of the tourism industry. All these trends lend themselves to the success of agri-tourism activities

23. Extra material Video https://www.youtube.com/watch?v=ranzxkS8fbU https://www.youtube.com/watch?v=1G8S1qNq3sc https://www.youtube.com/watch?v=pjosifYyrDg Text (Pdf) http://ageconsearch.umn.edu/bitstream/57657/2/Aguglia.pdf

24. 1. Direct marketing True or false? Direct marketing has become a highly effective way for small-to-medium sized farms to achieve economic sustainability. Feedback when correct: That's right! You selected the correct response. Feedback when incorrect: You did not select the correct response.

25. 2. What are the essential pieces of information that all farm direct marketers should develop and use to help promote their businesses? Feedback when correct: That's right! You selected the correct response. Feedback when incorrect: You did not select the correct response.

26. 3. What are the advantages of direct selling? Feedback when correct: That's right! You selected the correct response. Feedback when incorrect: You did not select the correct response.

27. 4. True or false? Feedback when correct: That's right! You selected all of the correct answers! Feedback when incorrect: Sorry, you have made at least one incorrect answer.

28. 5. What are the types of direct selling? Feedback when correct: That's right! You selected the correct response. Feedback when incorrect: You did not select the correct response

29. 6. On farm direct marketing models include Feedback when correct: That's right! You selected all of the correct answers! Feedback when incorrect: Sorry, you have made at least one incorrect answer.

30. 7. Consumers trends True or false? Consumers prefers don’t know where their food comes from, how it is grown and the people who produce it. Feedback when correct: That's right! You selected the correct response. Feedback when incorrect: You did not select the correct response.

31. 8. What are the new markets? Feedback when correct: That's right! You selected the correct response. Feedback when incorrect: You did not select the correct response

32. 9. Types of direct farm selling True or false? In farmer’s market success often depends on good research into the local market, products and ways to develop customer loyalty. Feedback when correct: That's right! You selected the correct response. Feedback when incorrect: You did not select the correct response.

33. 10. Types of direct farm selling True or false? Gift baskets work best with products that can be attractively displayed. Feedback when correct: That's right! You selected the correct response. Feedback when incorrect: You did not select the correct response.

34. References • Pugh, C.J., 2003. Liability Concerns for Farmers Involved in Direct Marketing of Farm Products. Agricultural Law Research and Education Center Pennsylvania State University, Dickinson School of Law. • Aguglia, L., Santis, F.D., and Salvoni, C., 2010. Direct Selling: a Marketing Strategy to Shorten Distances between Production and Consumption. Paper prepared for presentation at the 113th EAAE Seminar “A resilient European food industry and food chain in a challenging world”, Chania, Crete, Greece. • Anonim, 2013. Report on the case for a local farming and direct sales labelling scheme from The Commission to the European Parliament and The council. Brussels, 6.12.2013.

35. Thank you for having this course!