The Royal Norfolk Show 2017: Norwich Business School research proving a valuable marketing tool for small producers
- Credit: Archant
Targeted marketing initiatives could save small producers from getting into damaging price wars, according to a Norfolk researcher leading a study into shoppers' habits.
Prof Andrew Fearne told an audience at the Royal Norfolk Show that companies could find themselves in a 'race to the bottom', which could hurt those with limited cashflow or reserves.
'There is increasing competition for space on retailers' shelves and consumers' attention which means it is important for everybody in the food supply chain to have a better understanding of who buys what and why, so we do not just resort to trying to compete on price,' he said.
'The smaller you are as a business the less you can afford to just shut your eyes and hope people will buy your product, and it is amazing how many small and medium businesses do that, because they have got their head down doing what they do best – making their product – rather than thinking about what consumers want.'
Who Buys My Food, a collaborative study between Norwich Business School at UEA, Tesco and computer science company Dunnhumby, is based around gathering shopper insight to help firms with a turnover of under £6.5m identify their biggest markets. In its decade in operation it has helped more than 700 businesses.
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In his talk at the UEA tent Prof Fearne said producers had been 'exploiting the growth in demand for local and regional food' – a market now worth £5bn, three times that of organic products.
'This fits in with the opportunities that are presenting themselves increasingly to SMEs as consumers look for difference and provenance in the products they purchase,' he said.
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'If you have shoppers' insight, it informs how you market what you do as a business.'
Hillfarm Oils, based in Heveningham in north Suffolk, is one producer to have benefitted from the scheme.
Its business manager Lawrence Frohn said shopper insight had helped the company to identify its biggest market – affluent and health-conscious over-50s.
'We were price-promoting quite heavily at the time because there was a lot of competition between brands on the supermarket shelf. We were getting into a spiral of price promotion we needed to get out of,' he said.
A 'try for free' marketing campaign of 4,000 bottles, which allowed customers to claim back the cost of a bottle of Hillfarm oil, proved incredibly lucrative, increasing sales by 10-15%.
Changing the colour of its bottle tops was also fruitful, contributing to its sales in wholesaler Costco going from 1,000 bottles a month to 20,000.
The company, whose clients include Tesco, has also launched a three-month campaign offering a free digital recipe book to consumers.
Mr Frohn added this was particularly popular with younger health-conscious families, its next biggest target market revealed by the shopper insight.