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Case Studies of Successful Marketing Extension

Case study 1
Market research on agro-tourism linkages on a Caribbean island

Farmers on a holiday island in the Caribbean were not supplying the tourist industry.

A study showed that crops such as cabbages, carrots, okra, peppers and sweet potatoes were being grown.

Production was inconsistent due to the lack of irrigation, climatic conditions and pests.

Market research with hotels and restaurants identified a demand for fresh fruits and salads, and buyers indicated a preference for the more perishable local crops.

These findings were communicated at a series of farmer meetings.

Action. After the meetings farmers immediately started to grow melons to supply the tourist industry. Lettuce growers formed themselves into an association and the Ministry of Agriculture agreed to work with them on small-scale field trials of varieties that could grow during the hot summer months. The Ministry provided the lettuce growers' association with an estimate of total lettuce demand. This could be converted into a weekly planting programme, so that the growers could work together to schedule production to meet demand.

Six growers formed themselves into an association to grow a range of vegetable crops according to a production programme agreed with one of the island's wholesalers. In order to provide the consistency of supply demanded by the tourist industry, the Ministry started working with selected growers to develop intensive production systems, such as drip irrigation and shade houses, so they were able to produce high-quality products reliably throughout the year.

Main points

1. Farmers reorganized production to supply specific crops;

2. Farmer groups found that by programming production they could supply the market, carry out contract production at regular prices and reduce imports of specific crops;

3. The tourist trade appreciated the fresher local produce but needed regular supplies;

4. Changes were needed in production techniques to provide the market with what it required in terms of quality and continuity of supply.

Lessons. Extension officers and farmers often feel intimidated by markets and feel inhibited in talking directly to traders and other buyers. Marketing research is not only vital to understand what the market wants, but is also extremely effective at enabling farmers and extension officers to build up their own knowledge of the market. They start to feel comfortable with dealing directly with buyers.

Case study 2
Market research by women producers, Bangladesh

A group of women producers wanted to diversify into new profitable products, especially those suited to the landless among them.

At a preliminary meeting to discuss resources, a short list of four products was selected: (i) bamboo baskets, (ii) potato crisps/chips, (iii) rice cakes, (iv) embroidered blouses.

The women believed that embroidered blouses would offer the best opportunity.

After learning about market research, four of the women decided to research the local town market and report back to the group.

Action. Two marketing specialists and two extension officers accompanied the women to the market, gave them some training in market research and a checklist of questions. Two groups were formed. Initially the specialists led the market research interviewing. After the first two interviews, the women farmers led the interview process. Then the two groups met to discuss their findings and agreed on the next steps.

Decision. The market research found that there was a small and slow market for bamboo baskets, the potato crisp market was dominated by large-scale processors and the market for embroidered blouses was seasonal and difficult. However, there was an excellent opportunity to supply rice cakes. These were currently being supplied from a town two hours away and the women already had the skills and resources to produce high quality rice cakes. The retailers selling this product were enthusiastic about being able to buy locally produced rice cakes. At the next farmers' meeting the women presented their findings.The group agreed to produce samples of rice cakes and take them to the retailers during the following week.

Main points

1. Market research by rural people identified local buyers and a demand for rice cakes and eliminated the other possible products. This illustrates that researching the market and communicating findings to rural people is a powerful marketing extension tool.

2. The producers were quickly able to do their own market research, after being trained in the process and observing it in the market.

3. The development of the opportunity involved: (i) the initial meeting, (ii) market research in the town, (iii) a second meeting when the findings were presented, and (iv) a test marketing.

Lessons. The women had been nervous about going into the market. However, they were supported by one another and helped by the local extension officers and government marketing specialists.

Case study 3
Establishing new village markets, Madhya Pradesh, India

Evidence suggests that villages with over 5 000 people can always sustain a haat (village market) and that 50 percent of villages of over 2 000 have a weekly market.

Research showed that an area 25 kilometres across, containing 25 villages and with a collective population of 15 000, did not have any haats.

Villagers had to travel a full day to buy their essential products.

Action. Specialists from a local project discussed the idea of establishing a haat with village groups. It was agreed that the main centre (Kalda village) of all the villages was best located. A committee of twelve was formed to develop the haat there.

Decision. A site of one acre (4 000 m2) was selected in the village. It had trees for shade and good access to the road. It was agreed to start a weekly haat on a specific date. The site was cleared and levelled. Stallholder fees were agreed. Committee members went to surrounding villages to advertise and promote the new haat.

Implementation. At the first haat 85 stalls were put up, 3 000 buyers attended and total sales of over $3 000 were made. The haats take place every week. The number of stalls has increased to 125 and market turnover in 2004 reached over $4 500 per week.

Main points

1. Research had shown that there was a shortage of village markets in the area and that there was a demand from both consumers and producers for a local market.

2. The idea of establishing a village market received support, and consensus was reached on its location.

3. Prior to starting the haat it was properly promoted to ensure support from the beginning.

4. Once the market established itself sales increased, creating market opportunities for farmers and providing consumers with their needs.

5. It is important to ensure that the timing of a new market does not clash with market days in nearby villages, or traders will not visit a new market.

Case study 4
Banana post-harvest treatment, Africa

Locally produced bananas were sold in bunches to retailers.

They were green, with brown bruises and often infected with a fungus that shortened their shelf life and made them look unattractive.

Market research showed that some imported bananas were being sold.

These were well-coloured and relatively bruise free.

They were being sold at premium prices.

A local trader believed that there was potential for introducing an improved post-harvest system so that a better quality banana could be sold.

Action. The trader started by working with the banana growers in one village. He agreed to collect their bunches of bananas on one specific day of the week. A lorry was hired and he lined it with straw. He purchased the bunches and took them to a shed where he then de-handed them, washed them in diluted detergent, treated them with ethylene (to ripen and give a strong yellow skin colour), graded the hands and transported them in recyclable plastic crates.

He tested the market. Initially the retailers were reluctant to buy the bright, yellow, high-quality bananas, because of their higher cost. Within a week some retailers had purchased small quantities and found that their customers were enthusiastic and were prepared to buy the bananas at higher prices. Soon the market had learned that high-quality, higher-priced bananas would outsell poor-quality bananas.

The next problem was to supply the increased demand. Meetings were arranged between the growers and the traders with assistance from local extension officers. A regular buying route was set up and a firm price agreed. Sales reached 1.5 tonnes a day.

Main points

1. The market research suggested that consumers would be prepared to pay higher prices for better quality bananas.

2. This was proven by test marketing small quantities of treated and graded bananas.

3. To supply the increased demand, arrangements were set up to buy regularly from growers.

4. Volumes increased as farmers responded to the regular income.

Lessons. In this case the trader was pro-active because he believed he could build a profitable business. The extension officer played an important role in helping to create the linkages between the trader and the banana growers.

Case study 5
Tomatoes grown by an irrigation scheme, South Africa
Introducing a new crop

An NGO was working with farmers at an irrigation scheme in Masinga, KwaZulu-Natal.

The objective was to increase farmers' incomes.

Their focus was to improve profitability by growing what the market demanded.

The NGO carried out market research, which identified a strong demand in the Indian communities of Durban for plum tomatoes (processing types).

Also, to purchase the required plum tomatoes traders had to make long trips.

A survey in the area found that only the traditional round type of tomatoes were grown.

Decision. As plum tomatoes had not been grown in the area before, the first stage was to carry out field trials. These lasted four months, the duration of the crop. Crop recommendations were drawn up for both winter and summer crops. A plan was devised to build up the production of tomatoes.

Action. A nursery was established to raise seedlings for plum tomatoes to be sold in Durban. However, strong demand was identified in the nearest town (Greytown) and sales were built up to the level of about 80 tonnes a week from 170 growers, with average prices of R1.40 per kg. The crop gave a much higher yield (average 60 tonne per hectare) and was cheaper to grow as it did not require staking. Average sales were R84 000 per hectare. Farmer net income from 0.1 ha was about R2 000, compared with previous average net income of only R500.

If sales were over 80 tonnes per week then the price in Greytown market fell to only R1 per kg. In order to expand sales and further increase farmer incomes the NGO helped the growers to access the Durban market.

Main points

1. Market research revealed the market opportunity.

2. Field trials had to prove that the crop could be grown successfully.

3. Sales were built up slowly.

4. Market prices were monitored and new markets added if supply exceeded demand.

Case study 6
Production of tomatoes working with a processor

Running a successful processing operation requires a steady supply of raw material.

Processing time needs to be maximized so that the expensive equipment is used to the fullest.

Processors generally want to purchase large quantities of produce.

However, their buying prices are usually lower than in the open market.

One of the major difficulties when working with contracted farmers is side selling, (i.e. when growers sell to the fresh markets when the prices are higher).

A tomato processing factory had tried to involve small local farmers in tomato production by providing seeds, fertilizer and agro-chemicals but had been disappointed because the farmers had sold their crops through the local wholesale market and the factory had been unable to even recover the advances made.

Decision. New management took over the processing factory. They decided that it needed to source its raw materials from the surrounding small-scale farmers. However, it needed to have a strategy to overcome the attractions of the higher priced local market for fresh tomatoes. After holding farmer meetings the company's approach was to provide training, technical support, hybrid seeds and other inputs to twelve farmers with 5 ha each. The aim was to sufficiently raise yields so that the farmers had to sell most of their crop to the processing factory.

Action. Yields of 150 tonnes per hectare were achieved, providing a total production of 9,000 tonnes. In the following year the area under production doubled.

When the farmers understood the technology and started to generate sufficient cash to pay for their inputs, the processing factory no longer needed to provide credit or technical support. The growers supplied both the local market and the factory.

Main points

1. Processing factories do offer the possibility of a reliable demand, but prices are generally lower than on the fresh market, except in times of glut (a saturated market).

2. Contract production is useful in that it stabilizes income.

3. In this case the processing company took a bold decision to cover input and advice costs so that it could be assured that there was sufficient produce to supply the factory and the local fresh market.

Case study 7
Sharing transport to fully exploit market opportunities, Al Bayda, Yemen

Onions have traditionally been supplied from the Tihama Plain.

However, a farmer had experimentally introduced onions near Al Bayda.

They proved ideally suited to the area and excellent yields were achieved.

Quality was good and harvesting was possible throughout the year.

All the growers in the area took up onion production and transported the onions in one-tonne pick-up trucks to the distant city markets.

Decision. The growers had a comparative advantage in onion production. The challenge was to exploit this advantage. All the growers belonged to the same tribe and the tribal chief was encouraged to play a leading role in organizing them. They agreed to hire eight-tonne lorries, which reduced their transport costs from 0.5 Yemeni Rials per kg when using pick-ups to 0.2 Rials per kg. The growers co-ordinated their production and grew a range of varieties with different shelf lives in order to achieve a smooth supply of onions throughout the year.

Action. The farmers never sent more than one lorry to each of the main markets at one time. This ensured that they did not oversupply the market. Instead of selling via wholesalers the grower representative would sell the onions off the back of the lorry by the bag direct to retailers.

Main points

1. This approach to marketing (i.e. collective transport and direct sales), improved grower returns by over 40 percent.

2. The tribal chief imposed the necessary collectivism and discipline in terms of varieties grown, programming of production and trusting the farmer representative who undertook the selling on behalf of all the farmers.

3. The growers had sufficient comparative advantage and market strength to sell direct rather than through the normal wholesaler system. Initially they could afford to offer onions at lower prices than wholesalers to attract custom.

4. The farmers kept themselves well informed about the market by an information network, which included radio, telephone messages to the nearest town and messengers, so that further truck-loads were dispatched when market supplies were getting low.

Case study 8
Farmer group marketing

A project planned to lift rural incomes by improving farmer marketing.

A resource audit had shown that farmers sold small quantities of produce to individual traders who, in turn, sold to the wholesalers in town.

Market research with the wholesalers identified that they were prepared to buy directly from farmers, provided the farmers could fill a complete lorry of eight tonnes.

They agreed to pay the same price that traders would get for delivering direct to the wholesalers' warehouses in town.

Decision. The marketing specialist and local extension officer discussed this business idea with the local community and a plan was agreed. The farmers formed a group with a chairman, treasurer and salesman. They were provided with basic business training, that is bookkeeping, negotiation skills and the contacts of the wholesalers in town.

Action. The farmers negotiated with the wholesalers and selected the one who offered the best contract terms. During the harvesting season the farmers organized to bring in their produce to a central assembly point. The wholesaler's truck was called in. The direct sale enabled farmers to get better prices and the farmer group was confident enough to buy some produce from farmers outside the group. A portion of the margin was held back by the group to set up a small office and invest in some community facilities. The next season farmers increased their production and this successful arrangement attracted additional suppliers from growers outside the group.

Main points

1. The activities were based on an understanding of what the farmers produced, what the market wanted to buy and how it operated.

2. The farmers collectively realized that by working together they could miss out one link in the marketing chain, obtain higher prices and take greater control over their financial future.

3. The farmers took on additional skills. For the first season they were supported by a marketing specialist and their extension officer.

4. In the following seasons the farmers were able to further develop their business on their own.

Lessons. The key issue for the farmers was to be able to bulk together their produce to have sufficient quantity to fill the wholesalers' lorries.

Case study 9
Inward buyer mission, Mozambique

The local market for pigeon peas had very little demand.

Farmers needed additional markets for their produce if incomes were to be increased.

Studies showed that pigeon peas were an important crop in parts of the country.

Market research with local wholesalers suggested there might be export opportunities to India, as the season in Mozambique is not the same as that in India.

Trade statistics showed that India imported substantial volumes of pigeon peas.

Market research was carried out in Mumbai (Bombay) with pulse importers.

They were enthusiastic about obtaining supplies from Mozambique in the following season.

Action. Using international aid funds, an inward buyer mission of pulse importers was organized. They negotiated with Mozambican wholesalers to purchase some 3 000 tonnes. During the next two seasons there was relatively little pigeon pea exported, because of increased production in India. However, one of the importers, who had his own processing operation in India, realized that his exports of processed pigeon peas (dhal) to the USA had to pay a high import duty. Dhal exports from Mozambique would be duty free. He built a dhal processing plant in Mozambique and contracted production with small farmers.

Main points

1. Market research identified external markets;

2. Buyers were brought in to negotiate with local traders;

3. The trade did not progress smoothly;

4. What started as an export operation developed into foreign investment in processing facilities.

Lessons. This case shows how market research can be used to identify an opportunity in an export market. Export sales have the advantage of not only supplying a new market, but also of earning foreign exchange for the country. Inward buyer missions (bringing buyers to the farmers), are usually more successful than outward seller missions (where the producers visit potential buyers), particularly where exporting is concerned. The buyers need to be assured that their suppliers are able to deliver as promised and this assurance is best obtained by visiting the farmers.

Case study 10
Marketing extension training in South Africa

Agriculture was traditionally based on large, commercial, white-owned farms with marketing through marketing boards. Under the new Government, marketing boards have been disbanded and the development of black farmers encouraged.

Research by the Department of Agriculture concluded that development of the black farmers would be dependent on their access to markets. FAO was asked to carry out a joint project to train extension staff in marketing. It was agreed that the project should be aimed at training agricultural extension officers in marketing and in the commercial opportunities available to small-scale farmers, so that they could better advise their new clients.

Action. A group of specialists was identified, covering the main enterprises (i.e. livestock, poultry, wool, grains, horticulture, pigs and dairy), as well as the topics of marketing and marketing extension. The scope and range of topics that needed to be covered was agreed. The trainers gave a presentation to representatives from the national Department of Agriculture and the nine provincial Departments of Agriculture. Consensus was reached on the topics and approach of the training courses.

The trainers prepared training materials, computer presentations and visual aids (including posters, cartoons and photographs). The training materials covered each of the main agricultural enterprises and provided information on how the individual products were marketed, the market opportunities and quality standards. The trainers made suggestions as to how small-scale emerging farmers could access the markets. The emphasis was on what marketing knowledge the extension officer needed to have and what could be done to improve farmers' marketing. Three five-day training courses were organized. At each, three provinces sent ten representatives from their extension departments. These included a senior manager, a training specialist and experienced extensionists.

Training. The training courses were designed so that participants' knowledge of markets, marketing and commercial opportunities developed over the five-day course.

The first day concentrated on providing an overview of marketing and how marketing had changed. It also included presentations by staff from each province on the agricultural and marketing situation in their province, an exercise that forced participants to think about the marketing situation in advance of the workshop.

The next two days concentrated on the various agricultural enterprises. Enterprise specialists led seminars on the products, using the training materials they had prepared.

The last day included a number of participative exercises, such as role play, presentations by the individual provinces on what they had learned and field trips. Each day the participants had to fill in feedback questionnaires. The course could then be modified immediately and the training materials adapted in the light of trainees' reactions.

Outcome. One of the most important lessons learned was that passing on information about marketing was not sufficient. Trainees wanted to participate. Valuable lessons were learned by sharing field experiences. Field trips and practical exercises (e.g. graph reading exercises, calculating gross margins) were highly appreciated. Trainees enjoyed the opportunity of being able to present the existing marketing situation in their own province and discussing what they aimed to achieve when they returned.

After the initial training courses, the training materials were modified and printed and all the presentations consolidated on CD-ROMs. Materials were made available to all extension officers. These were used as the core of each province's own marketing training courses. The participants of the initial training course gave other extension officers training courses. They, in turn, gave marketing courses, albeit in a simplified and shorter form, to the farmers in their area.

Main points

After one year, provincial agricultural departments gathered together to provide feedback on the impact of the course with the following results.

1. The marketing training courses responded to a need both of extension officers and of farmers to be more alert to commercial opportunities.

2. The courses provided important basic information, an understanding of how markets worked, a clear idea of the expertise and knowledge that extension officers needed to have, and the activities that they might be able to carry out.

3. The training materials provided information for the provinces to build their marketing expertise. Particularly appreciated was the listing of contacts, addresses and information sources, so that extension officers could source specialist information and create linkages between their farmers and the agri-business sector.

4. Farmers explained how extension officers' new marketing expertise and understanding had improved their financial situation. Examples included trade introductions, contract production, supplying supermarkets directly and transport sharing.

Lessons. The main lessons from these courses were that trainees wanted to be able to participate. They were enthusiastic about field trips. They wanted to see markets functioning and to be able to talk to traders. A successful technique is to have an experienced marketing specialist carry out a demonstration interview of a trader in front of the trainees. Role play proved to be an excellent method of enabling trainees to practice information gathering.

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