Market research and environmental analysis
Food distribution is moving food from the producer to the customer: collecting, grading, packing, storing, transporting, processing and selling. Each step may have a middleman such as a trader, wholesaler or retailer.
Market research
Collect facts about customers before you decide.
- Primary research: ask people yourself with surveys, interviews, taste tests and observation.
- Secondary research: use data that already exists, such as sales statistics and reports.
- Find out: who buys, how much, how often, at what price, where and why.
Environmental analysis
Look at the world around the business.
- Competitors: who sells similar food, at what price and quality?
- Trends: people may want healthy, local, ready-to-eat or online food. Climate and incomes change too.
- Rules: food safety, labelling, hygiene and transport laws.
- Strengths and weaknesses inside the business: money, skills, equipment.
A simple tool is a table of strengths, weaknesses, opportunities and threats (SWOT).
Formulating marketing strategy
A marketing strategy is the plan to reach the goal using what research found.
- Segment: split buyers into groups with similar needs (for example students, families, shops).
- Target: choose the group you can serve best.
- Position: decide what your food stands for in the buyer's mind (fresh, cheap, local, healthy).
- Fix the 4 Ps (marketing mix):
- Product: kind, taste, quality, pack size, label, brand.
- Price: cost plus profit, rivals' price, what buyers will pay.
- Place: the distribution channel: direct to customer, or through shops, wholesalers or online.
- Promotion: ads, tasting, social media, discounts, packaging.
- Set a target: for example 400 packs a week.
Choosing the channel: a longer chain reaches more places but every middleman adds cost and time, so food may be less fresh and the farmer's share smaller. A shorter chain is cheaper and fresher but reaches fewer buyers.
Practising and evaluating food marketing
Practice
- Make a small batch and test it first (test marketing).
- Follow food safety: clean hands, correct temperature, honest label.
- Keep cold or fresh food moving fast. Plan transport and storage.
- Run the promotion and record sales every day.
Evaluation
- Compare actual sales with the target.
- Check other measures: customer feedback, repeat buyers, waste (food thrown away), cost and profit.
- Ask why the gap exists: price, quality, place or promotion?
- Change one thing, run again and compare. This is the improve step.
Profit per pack = price - cost per pack. Weekly profit = packs sold x profit per pack.
Try it: sell a snack
In the last 3D step move the price and middlemen sliders. Predict first: does a higher price always give higher profit? Find the price with the biggest profit for 0 middlemen, then for 3.
Key formulas and definitions
- Cycle: Research, Strategy, Practice, Evaluate
- 4 Ps: Product, Price, Place, Promotion
- Profit per pack = price - cost per pack
- Weekly profit = packs sold x profit per pack
Worked examples
1. Name one primary and one secondary research method for a new fruit juice.
Primary: a taste test and survey at a school fair. Secondary: sales reports of juice sellers in the region.
2. A pack costs 12 to make and is sold at 20. 150 packs are sold in a week. What is the weekly profit?
Profit per pack = 20 - 12 = 8. Weekly profit = 150 x 8 = 1200 (money units).
3. The target was 400 packs a week, but 320 sold. What percent of target was reached, and what could you check?
320 / 400 x 100 = 80%. Check price, taste or quality, place (are shops far?) and promotion.
Common mistakes
- Starting to sell before any research.
- Choosing a price only from cost and ignoring rivals and buyers.
- Thinking a longer chain is always better.
- Never comparing real sales with a target.