strategic marketing: the importance of innovation and relevance annual agricultural outlook kennedy...
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Strategic Marketing: The Importance of Innovation and
Relevance
Annual Agricultural OutlookKennedy Hall
December 10, 2002
Brian M. Henehan,Senior Extension Associate
Department of Applied Economics and ManagementCornell University
Today’s Objectives
Brief Review of Research Focusing on Consumer Attitudes Toward Processed Apple Products
Summarize Key ResultsDiscuss Implications for Keeping
Products Relevant to Today’s Consumers
Review Need for Ongoing Innovation
Project Backgroound
Project Involved a Multi-Disciplinary Team at Cornell Ithaca Campus and at Geneva over three years: 1999-01
AEM Was Responsible for Marketing Research Component
Acknowledge Contribution of Colleagues: Kristin Rowles Gerry White
Marching Orders from Advisory Council
Need to be Forward LookingDon’t Duplicate What’s Already Been
DoneProduct Concepts Have to Be
Relevant to Today’s ConsumersMaintain a Focus on Strategic Issues
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
Nat’l 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
Methods
Extensive Review of Current ResearchProcessor surveyFoodservice focus groups and interviewsSchool foodservice surveyNew product development workshopNational consumer surveyConsumer focus groups
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
Consumer Survey Methods
Telephone surveySample of 1,011 women
age 18 and older private households continental U.S.
Conducted September 21-25, 2000
Consumer Survey
A limited number of broadly appealing apple products indicates a need for new product development.
Purchase of apple products is greatest in households with children.
African American and Hispanic American households have a high incidence of apple juice purchases
These households are likely to be the best target for new apple products.
Consumer Survey
Families with children and African American and Hispanic American households showed an interest in the following new product concepts:
Snack packs with pre-sliced apples(caramel dip, cheese, crackers)
Apple juice & spring water beverage for toddlers Pre-sliced apples for eating & cooking Apple juice spritzer (non-alcohol)
“POP” Quiz
How Many of You Have Purchased Fresh Apples or Apple Products Over the Past 30 Days?
How Many Have Purchased Fresh Cut Fruits or Vegetables (baby carrots, salad)?
How Many Eat Fresh Apples Cut Into Slices? Whole, Uncut?
Consumer Focus Groups
Six groups, two each with: Women with children under 6 Women age 50-69 Women age 25 - 49 who drink wine
Eight participants per groupGroups held in Manhattan and
Paramus, NJ
Focus Group Discussions
Use of fresh fruit Use of fresh apples Perceptions of apples Use of processed apple products Perceptions of apple products Sampling of products Consumer Recommendations
Consumer Focus Groups
Consumers know that apples are “good for you” and good for their children, but they are not sure why.
Consumers 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.
Consumer Focus Groups
Some mothers are concerned or confused about whether their young children should consume full-strength apple juice.
Expansion 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.
Consumer Focus Groups
Focus group participants reacted enthusiastically to samples of sparkling hard cider and spicy apple butter.
Consumers 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.
Consumer Focus Groups
Consumers may be interested in apple products with new variations on flavors.
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.
Maintaining Product Relevance
Understanding What Is Relevant to Today’s Consumers
Primary motivators of today’s consumers: convenience, wellness, safety, and gratification.
Understanding Consumers
Target GroupYoungerFemaleEthnically DiverseUrbanEats Away From
HomeSeeks Convenience
& Gratification
Decision MakersOlderMaleWhiteRuralEats Home Cooked
MealsTraditional
Preferences
Why Innovation?
Key to Staying RelevantResearch and Development
New ProductsCreate Lower Cost Structure
TechnologyContinuous Innovation Needed:
Production, Processing, Distribution, Marketing
Role of this Research
To act as a catalyst for innovation in the market To stimulate interest in new product concepts
and new markets To analyze the competitiveness of the regional
industry To provide assistance to commercial partners To complement, not duplicate, on-going market
research in this industry NOT to Provide a Magic Bullet
Remaining Strategic Questions
Apples and Apple Products Retain Positive Image
Perceived as Healthy ChoiceInterest in New Product ConceptsMore Resources Needed to Keep
Products RelevantContinuous Innovation Needed
Publications
Processed Apple Product Marketing Analysis: Hard Cider and Apple Wine, Staff Paper 2000-06
“Adapting to Changing Markets with New Products”, Smart Marketing Column, March 2000
“Are Your Products Relevant?”, Fruit Grower News, October 2000 “Market Research for New Products”, Smart Marking Column,
September 2000 “Marketing Apple Products”, New York Fruit Quarterly, December 2000 Processed Apple Product Marketing Analysis: Apple Juice & Cider, Staff
Paper 2001-01 Northeastern Apple Processors: Situation and Outlook, Staff Paper
2001-02, February 2001 Thinking Afresh About Processing (Final Report), Staff Paper, available
late June 2001
www.aem.cornell.edu