Securing loyal customers are essentials for every food business. Apart from commitment to deliver safe food to the consumer, marketing aspect are essential to promote food business and to gather a steady base of loyal consumers.
Marketing, in its most simple way, consist of these 4 elements we call “marketing mix” :
These 4 “P”s marketing mix, in combination contribute to defining a branding strategy for these products to cater to our target market. In a simple term, the target market is the intended consumers that we want purchases from -these can vary in demographics, consumer preference, convenience factor etc.
Unless it is a generic product, you would like to have a specific target market that distinguished your company’s product versus competitor’s product. The difference could be product features or even the level of services that we are providing to our customers.
Defining a product feature that can appeal to our customers is a part of branding the product. For example, a gluten-free product, a convenient pre-mixes or generic products that are cheap, healthy substitute products, etc.
Challenge: List what product feature that we want to have. Categorize them into “essential or must–have” and “good to have” section.
The ultimate question is why the customer will buy your product instead of our competitor’s.
Most consumers are price-sensitive especially for generic or common foods in the market place. Price depends on production cost and fixed cost plus profit for everyone in the distribution channels.
Pricing strategy is unique that when we price it too high, consumers might not be able to afford it but if we priced it at a premium, consumers that seek for premium product will purchase the product. Eventually, it depends on what product and to whom we are selling it to.
Challenge: List the cost of production, shipping and other fixed costs (the cost that needs to be paid regardless of income is received). Set a margin or percentage of profit you want to obtain. Add all costs to determine the selling price to your customer.
If your product goes through distribution, consider what is the recommended selling price to the final consumers. Remember, distributors like to have a portion of the margin for carrying the product at their store.
Tips:Learn what is the appropriate margin in the industry.
The ultimate question is how to price it right for the final customer so that they can afford it but still manage to profit after deduction of production cost and distribution cost.
I like to categorize three main point of sales (where customers can get a food product): retails (such as stores, market), food services (restaurants, hotels) and online. Having a business model, objectives and goals can help us define which of these point of sales, to choose from. It is not wrong to choose one or all three point of sales but as a start-up, managing all three point of sales can be challenging.
Challenge: Do a SWOT (Strength, Weakness, Opportunities and Threat) Analysis to determine the business best point of sales. Is it retail, food services or online?
The ultimate question is how do we reach most of our customer with minimal effort?
What I really like about start-up is the food product and the company is totally fresh. There is no restriction of idea to launch and promote the product. Care however, needs to be taken to ensure these product branding are consistent in one direction.
Example is for premium product, product placement should be at a more premium outlet to attract customer. Placement of premium product at a common store, can devalued the product.
Different promotion strategies can be employed to increase visibility of the product or sales of the product including brochure distribution, banner, in-store demo, discount coupon, early bird pricing, promotion through media such as newspaper, magazine and through social media such as Facebook, Twitter, Pintrest etc.
The ultimate question is how do we employ strategies consistent with the product image and branding that increase visibility and sales of the product?
Food business are challenging because not only that the food needs to be safe for consumption, cost of ingredients fluctuate and requirement for consistent marketing effort, it is also about documentation for product listing and product approval for sale at the stores, or by the food services and even online, by the country that we intend to sell to.
After defining our marketing strategies, it is time to deal with something more formal -paperwork. In the food industry, paperwork are inevitable. Paperworks acts as records and records are important to ensure what we do is as per industry standard or based on the point of sale regulatory requirement and sometimes, as required by our direct customers.
Paperworks could be in the following forms for:
Restaurant, cafe, and eateries: application to the local authorities to apply for operational permits and obtaining Food safe certificate
Food manufacturing: daily production records such as formulation, weight, and product approval sheets, food safety programs such as Good Manufacturing Practices, Pre-requisite program, HACCP (Hazard Analysis and Critical Control Point) and more comprehensive 3rd party audited GFSI program such as FSSC 22000, BRC, SQF.
Your customers may also request other documents such as nutritional information, allergen information, specifications, certificate of analysis, supplier questionnaire and a copy of your food safety program certificate.
Natural Health Products: Different countries treat nutraceutical products or natural health products differently. In Canada, the manufacturing and distribution of Natural Health Products require approval from Health Canada and when approved, the natural health product is given a specific Natural Product Number (NPN).
Depending on the type of the products, the application can be as easy as filling up a form to gathering supporting documents to support the application for NPN. Some customers also require a Letter of Guarantee and Good Manufacturing Practices assurance.
Retail Food Products: Product listing documents that typically involve ingredients, nutritional and specification information.
Export/Import: Example of required documents include International Trade Certificate, Specification, Certificate of Analysis for each batch of product shipped, Certificate of Origin and International Import License.
Not every food products are treated the same when it comes to export and import. Some product that contains poultry-based ingredients requires Health Certificate. Gathering this information can take time and can be stressful.
SFCR Tips: Safe Food for Canadian Regulations require the following to ensure the safety of food sold to Canadian consumers – preventative control plan, consumer protective plan, and traceability plan. This is inclusive of food imported into Canada for the Canadian market. Check out resources for complying with food import.
If you are starting up a company and have numerous need for filling up documentation, the tip is to seek help from someone who is familiar and capable to fill up the document correctly and effectively. Why stressed and distract yourself from focusing on the business with a pile of extra paperworks?
The fact is filling up documentation correctly can be proven challenging and time-consuming even for a food technologist like myself. By hiring someone who is familiar at filling these paperworks, you could leave things at our hand and expect the best from us.
Amazingly, I consider these as challenges that I am determined to overcome, especially when it comes to gaining new international customers through supporting international trade documentation requirement.
What do you think about documentation? Is it excessively required in the food industry? Do you wish the process could be simpler? Share your thoughts and remember every thoughts are important to be shared.
About this series:
Most often, it is difficult to evaluate business feasibilities and starting up your food business. This is a part of the “Building Your Food Business” education series for those who like to start a successful food business with consideration of customer and food safety in mind.