Buyer motivations are quite complex and vary according to gender, age, cultural, ethnic, regional etc. The previous chapter showed that consumer attitudes do not follow a uniform pattern. The Ctifl (Centre technique interprofesionnel des fruits et légumes, Laborde, et al., 1993) identifies three different types of group behaviour patterns. The first group comprises consumers with a basic attitude. They are traditional - i.e. consumers of generic and undifferentiated fruits and vegetables. The second group seeks quality differentiation - i.e. organic or quality certified products, commercial brands, labels of certification of origin or regional produce that is differentiated etc. Convenience consumers belong to the third group. They are looking for fast and simple ways to prepare meals - i.e. prepackaged items, fresh-cut, frozen, canned and ready to eat produce.
There are other factors which also influence buying decisions. The main objective of buying is to obtain satisfaction. For fruits and vegetables, this means being able to meet nutritional requirements as well as being able to enjoy different tastes, textures, colours and aromas. There are two key considerations. The tangible quality attributes such as uniformity, freshness, quality, colour, ripeness, packaging, etc which affect appearance and make produce more appealing or attractive compared to similar products. Buying decisions are also influenced by some intangible quality attributes such as quality, environmentally friendly production techniques, brand reputation, image of the supplier, etc.
Distribution of produce to consumers can be undertaken in two ways: indirectly or directly. In the former, intermediaries (i.e. retailers, wholesalers, brokers, etc) are responsible for conveying consumer preferences to producers. The farmer prepares product to satisfy this demand. On the other hand, selling directly provides farmers with the opportunity to explore the complex range of consumer behavior and to innovate by looking for new alternatives.
The fruit and vegetable sector comprises many small-scale farmers on small plots in many production areas around the country. They are often located in areas distant from their main markets. This is the main reason why produce is distributed indirectly to consumers through middlemen and markets. Different commercial agreements and relationships exist between buyers and sellers. Price normally depends on volume and the quality of produce supplied.
Terminal wholesale markets are probably the most common type of marketing channel. Produce supplied from different growing areas is assembled and sold through intermediaries (wholesalers, distributors, importers, etc.) to retailers, food service companies, supermarket chains or smaller regional markets. The main advantages of terminal markets are: high concentration of supply and demand and larger volumes that can be traded. Other benefits include the fixing of reference prices for the produce traded. Fruits and vegetables should be packaged according to market handling and transport methods. In many cases palletization is required. Wholesalers usually take ownership of produce or they can sell produce on a commission basis.
Producers located close to wholesale markets may rent space on a daily basis to sell their produce. The main benefit is the high concentration of buyers. However, because of small volumes of product for sale, they often lack bargaining power.
Other marketing alternatives to selling in wholesale markets include: sales to collectors, truck drivers, shippers, packers, agents, etc. Sales locally to retail outlets (including supermarkets) provide another alternative. Purchasing directly from producers rather than through wholesalers provides some additional benefits. These include freshness, price or offering a special product that is exclusive. However, high volumes required by supermarket chains may exclude small-scale farmers as suppliers.
Other methods to gain access to large markets is by collecting product from several producers through a cooperative or selling to individual pack houses. Benefits include uniformity of quality and packaging, reduced costs and the opportunity to hire marketing specialists to increase sales and profitability.
This is sales by the farmer direct to the consumer.Different studies show that many consumers prefer direct contact with the producer/seller compared to an impersonal service, although the latter are in some cases more efficient. One of the main advantages of direct sales to consumers is the opportunity to reduce marketing costs and to add value to the product. In this way, the profit margin is increased. Producers need to become aware of existing marketing tools in order to maximize sales.
In most cities municipal ordinances regulate places and areas where fruit and vegetable retail outlets can operate. In selecting a location, the three main factors to consider are: good visibility, accessibility and proximity to buyers. Street or road crossings, the proximity of shopping centers or any other area which has the potential for high volume of passenger traffic are good locations for produce sales outlets. Some municipalities give permission to place exhibits on sidewalks to attract customers (Figure 65) provided they do not interfere with normal pedestrian traffic.
Figure 65: Street or road crossings are the best places for a permanent produce outlet. Exhibitors on the sidewalk increase visibility and attract customers but they must not interfere with pedestrian circulation.
220.127.116.11 Municipal regulations
Municipalities are autonomous and can make their own regulations for the location and operation of fruit and vegetable retail outlets.
18.104.22.168 Layout an organization of a produce outlet
Although many customers have a written or mental list of fruits and vegetables they intend to buy, most buying decisions are made inside the store. The layout and organization of the retail store may help customers to make a purchase thereby increasing sales. The self-service system and the traditional personal service are the two main types of marketing methods. In many cases, a combination of both are offered.
Many customers prefer the traditional system because personal interaction increases buyer confidence. Loyalty can also be built provided good quality, freshness and reasonable prices are combined with good service and friendliness. The image presented by sales staff is important to the customer. This is because they tend to think that people who take care of themselves also take an interest in the produce sold in the store. Sales staff also need to be courteous and friendly towards the customer. There are several drawbacks to traditional personal selling. First, it is not appropriate for customers who are in a hurry. In addition to this, some sales are lost because serving customers requires additional time.
The self-service system requires an attractive display of goods and a good plan for space allocation of the items on sale. This is important because produce that is not visible or attractively presented, is hard to sell. Information about varieties and prices should be clearly legible. Customers should be able to weigh produce or select prepackaged products that have been pre-weighed and labeled. This marketing method is ideal for people who prefer rapid service and prefer to choose size, ripeness, quantity and quality according to their own purchasing criteria.
The main factors to consider for increasing sales in a self-service outlet are: accessibility, visibility and easy flow of circulation. Accessibility is a physical and psychological concept. If produce is piled up high, displayed in an untidy way or difficult to reach (Figure 66), this may have a negative impact on sales. Consumers also become confused and lose time looking for goods. Ease of circulation makes shopping more convenient, particularly if trolleys can be used. As previously mentioned, visibility is a key factor in determining the whether a product can be sold.
Merchandising techniques are important to increase the visibility of the product. From a distance of 2 meters, an average person sees an area starting at 0.80 meters from the floor and up to 2 meters high and about 2-3 meters wide. Visibility decreases dramatically outside the indicated area. A minimum area of 0.30 m wide per item is required for good visibility (Figure 67). Large products like watermelons, melons, pumpkins, etc. require more space. Special allocation and large displays like islands in the middle of the aisles can be used to draw attention for quick sales (Figure 68). Slanted shelves (30 - 45°) and mirrors can be used to enhance product presentation (Figure 69). Refrigerated shelves should be used for highly perishable crops (Figure 70).
Figure 66: A disorganized and hard to reach display confuses customers losing their time looking for the goods.
22.214.171.124 Strategies for maximizing sales
As a rule and priority, a wide range of products should be on offer. As mentioned earlier, this is because most buying decisions take place in the store. A relatively well-supplied produce store should carry a minimum range of around 20 fruit and 30 vegetables. Product choice is not only about the range of crops on offer, but also different varieties, colours types of packaging, etc. Although there are no fixed rules, the proportion of fruits and vegetables on offer should be more or less equal. Vegetables during the summer months should be increased while the opposite should occur during the winter.
The quantity and type of fruits and vegetables for sale varies in each country. However, as a general rule, produce can be divided into two groups. "Basic" refers to bulk produce sales and is demanded by all types of consumers. "Specific" refers to those destined for certain niche markets (Laborde, et al., 1993).
Figure 67: Each item for sale occupies shelf space and this depends on their individual size and marketing strategy.
Figure 68: Large items need more shelf space. Special allocation and large displays like islands in the middle of the aisles can be used to draw attention for quick sales.
Figure 69: Mirrors enhance products increasing their visibility.
Basic products can be divided into permanent - produce that should be available on shelves all year round such as apples, tomato, potato, lettuce, carrots, etc.; seasonal, available only during certain months of the year such as peach, nectarines, melons, etc. and minor produce, such as garlic, parsley, radish, etc. Within specific categories of products are exotics - these are mainly of tropical origin and include pineapple, mango, coconut, etc.; off-season crop, in many cases originating from other countries; mushrooms; ready made salads; aromatic herbs; those of a specific quality, such as quality certified products, labeled with origin certification or regional differentiated produce, etc.; organics and fresh-cut or ready to eat products (Laborde, et al., 1993).
There are many different ways in which produce can be displayed and some may be highly effective. The most common practice is to place contrasting colours next to one another. This is in order to create a contrast of different coloured commodities. For example, red tomatoes next to green cucumbers, or violet and white eggplants, etc. Another method includes mixing and matching products that are often sold together such as tomato and lettuce, for salads, bananas with other fruits, for making fruit salads, etc. Less common is the grouping of similar products such as tubers and roots (Figure 71).
Although this method of marketing is frequently seen in developing countries, street selling and peddling is generally not allowed by most municipalities. There are two main reasons for this. Firstly, there are public health and hygiene considerations. As an activity it generates off-odors and insect and rodent proliferation. The second reason is that it constitutes unfair competition for established outlets. These are periodically inspected and are liable to taxes on their operations.
Figure 70: Refrigerated displays should be reserved for highly perishable items.
Ambulatory selling is undertaken in vehicles either drawn by motor, animal power or humans (Figure 72) and produce is peddled from home to home. Street selling has the same characteristics and limitations as ambulatory selling. As scales are unavailable, produce is generally sold by units (Figure 73).
126.96.36.199 Farmers markets
Figure 71: A strategy to increase sales is to group together similar products, such as tubers and roots.
A farmers market is a form of direct marketing that is located in or within proximity of a community where growers sell directly to numerous customers (Figure 74). Cash sales and the possibility of selling under or oversize units that cannot be marketed through other marketing channels are the main benefits of this system for farmers. For consumers it provides the opportunity to buy fresh produce or home made products and to interact with producers in an informal environment. A farmers market becomes successful when there is cooperation and interaction among three key groups:
Location of the market is an important factor. Different studies indicate that it is more practical to be located within close proximity to buyers than to vendors. Markets are often located in the town square or any other public open space. Vendors provide their own tables, racks, covers for shelter and other facilities for selling that can easily be dismantled when trading is over. Paved drives and walkways provide certain advantages in addition to adequate parking space. A tree-shaded space protected from the weather is much more desirable for both vendors and buyers.
Figure 72: Peddling is limited by the number of items that can be transported. Some municipalities do not allow any type of street vending.
Sponsoring or organizing institutions should charge vendors a stall fee. This is in addition to providing security measures, lighting and cleaning services. They have responsibility for policy making. This includes types of persons permitted to sell at the market, fees, hours, days and months for market operation, sanctions and other operational issues. They also need to arbitrate in the event of problems and disputes. Other responsibilities include: promoting the market, avoiding conflicts through local ordinances and maintaining the market "environment". These are exactly the conditions that make a farmers market so attractive.
Fruits, vegetables, honey, eggs, firewood, flowers, plants, gardening materials and other products can be sold at farmers' markets. Bakery products, jams, marmalades, milk, homemade cheeses, and other products may require special permits. Sales of meat and other products may be forbidden. Only farm products are permitted for sale. Reselling is not allowed. Sales of crafts should be allowed because it attracts people. However, this should be carried out on a limited scale so as not to lose the spirit of this type of market.
The main advantages of selling at farmers markets include: minimum investment required to operate, no need for packaging materials, large volume of produce or a wide variety of products. Disadvantages include: low volume of unit sales, the need for customers to be served and bad weather can discourage them from attending the market.
Figure 73: Street vending has the same limitations as peddling. If no scales are available, products are sold by the unit.
188.8.131.52 Regional markets
Regional markets exist in many developing countries where buyers and sellers meet to trade. From an organizational point of view they are very similar to farmers markets. One of the main differences is that operations are more concerned with wholesaling, although some retailing is undertaken. A sponsoring organization also exists. Responsibilities include undertaking administrative duties of the market, one or more days per week for operating, stall rental on a daily basis, etc. This system provides many small-scale farmers with the opportunity to sell their produce at a fair price.
Farm outlets attract many customers. This form of direct marketing has the advantage of adding value.
Location of the farm outlet is extremely important because it has to be seen from a certain distance. It should be located on relatively busy roads, but traffic should not be over 70-75 km/hour (Lloyd, et al., 2001). The main access routes to cities are probably the best places for these types of markets. However, they can also be located in other areas such as tourist areas. Safe paved drives and availability of good parking space are factors to be considered (Figure 75).
Figure 74: The informal "environment" of a farmers'markets is the main attraction for customers.
Signs should clearly direct customers to the farm outlet with instructions of how to safely turn into the market. These should be seen from a certain distance and well in advance, between 100 and 2 000 m distance (Figure 76). This is in order to allow drivers to reduce their speed for exiting. The faster the traffic, the longer the distance of the signs from the exit, the larger the size of the letters and the lower the number of words that should be placed on the sign. For example, to be legible from 100 m, letters should be at least 30 cm high and 6 cm wide. Twenty-two letters of that size can be read at a speed of 45 km/h but only 10 at a speed of 90 km/h (Lloyd, et al., 2001).
There is no standard formula for designing a farm outlet, as shelters, barns or special buildings may be used. They should be clean and tidy with enough space for displaying produce. They should have a rustic and simple appearance (Figure 77) because this is what mainly differentiates them from other produce outlets. Preferably products produced on the farm should be available for sale. This can however be mixed with other products purchased from wholesalers. Recommendations on how to maximize sales which were discussed in previous paragraphs are also valid here. A special type of farm sales is the "U-pick" or "pick-your-own" system (Figure 78). Consumers can harvest fruits and vegetables on their own. In these type of farm outlets, some produce has already been harvested and packaged. This is included with some crops that the customers harvest. Containers and harvesting tools should be available as well as precise instructions as to which areas are ready for harvesting. Sales are carried out in weight, volume, or units.
Figure 75: To be successful in on-farm sales, outlets should be located on a main road, with ample parking and with a neat display of the goods for sale.
The main benefit to the farmer with this form of direct marketing method is there is no need to harvest. It also eliminates the need for sorting and packaging costs. This results in lower prices, making the produce more attractive to the consumer. The customer also has the opportunity of spending a day outdoors in contact with nature, and produce is harvested at optimum ripeness. Frequently this is a recreational event for families where the objective is to make homemade jam or marmalade. For this reason, individual sales are larger than in other direct marketing methods.
Some supervision is required here. This is because many customers do not have farm experience and may unwittingly damage plants. Moreover, the liability is higher - a higher risk of accidents can occur with harvesting tools, ladders or equipment. A good emergency system should be provided including an insurance policy. Fruit crops are more appropriate than vegetables and different varieties and long harvesting periods are the ideal crops for this system. Pesticide applications and waiting periods should be carefully planned. This is so that there is always an area ready to be harvested.
The basic rule for maximizing farm sales is the concept: "the longer they stay, the more they will spend". For this reason, additional programs should be offered such as farm tours, wagon rides, activities and games for kids, on-farm walking trails, camping, craft demonstrations, nature study, farm animal petting zoo, fishing, etc. Other ways of increasing income is through sales of homemade jams and marmalades, sauces, traditional or special recipes, homemade food, crafts, etc.
Figure 76: To draw travelers attention, signs must be posted in advance for a safe exit or stop and with a letter size legible at distance.
Figure 77: A farm outlet should have a rustic and simple appearance. Furthermore, it needs to be clean, with an attractive display and adequate space for circulation.
Figure 78: "U-pick" or "Pick your own" systems are alternatives to selling on-farm.
Direct buying by restaurants, hotels, hospitals, geriatric institutions, etc. is undertaken to reduce costs and to simplify the daily supply and preparation of different dishes served. Steady all year round demand is the main advantage to the farmer. The farmer has the opportunity of adding value to the product by washing, peeling, pitting, slicing, portioning, etc. One of the main disadvantages is the difficulty of satisfying steady demand with seasonal products and prices can vary significantly. Other factors include: limited storage space in restaurants, regular delivery of small volume orders, higher telephone and transport costs and extra documentation which increase operational costs.
Ethnic and 'high class' restaurants belong to a special category and need to be taken into account. This is because they often require special or premium quality produce. Contracts can be profitable provided quality produce is supplied according to specification and timely delivery. Also, a creative chef can significantly expand sales.