Place is all about having your product/service in the right place at the right time and in the right format for your target customers. In the grain and feed business, logistics and transportation have long been a very important part of “place” and continue to remain critical today. You and all of your competitors spend a lot of time and effort to make this part of your business operate as smoothly and efficiently as possible. It only makes sense to continue to work on further improving efficiency in this area, as it makes up a significant component of cost for the value chain.
In addition to transportation and logistics, have you given thought to the way that you interact with your customers? Evaluating how your product/service bundle is available to your customers (in terms of location, time and format) could shed light on some opportunities to become more competitive on the “place” front. Here is a start of things you might consider:
Your website: What information and functions do you have on your website? How is this meeting the needs of your target customers? What changes would bring value to your target customers?
How are you using social media? How are your target customers using social media? What changes could you make to bring greater value to your target customers
What mix of services do you currently offer (e.g., delivery/pick-up; special feed formulations; etc.) and how are they addressing the needs of your target customers? Are there some services you could drop and services you could add to bring more value to your target customers?
Are you providing any customized invoicing and payment for your target customer — (e.g., for farmers with rentals, customized paperwork can make it easier for bookkeeping)?
How do your hours of operation fit your target customers’ needs?
How many locations are you operating from? There can be a real trade-off between the cost of maintaining a business location with the value of convenience for customer loyalty. When considering this issue think about the needs of your target customers. What ways can your staff communicate and interact with your target customers to meet their needs without a physical location (e.g., have your target customers get accustomed to calling one of your sales staff when placing an order that is then filled by you making the delivery)?
Are there smartphone apps you could develop without too much expense, which your customers might find helpful? Think about how to provide extra value to your customers — perhaps something like an app that tracks waiting time for unloading trucks at harvest — would this be useful?
You will no doubt have noticed that some of these aspects of “place” are closely related to “product.” This is to be expected since we are evaluating components of the marketing mix.
Figuring out the appropriate pricing for your business is challenging. If you don’t get the price right, you are either losing business or “leaving money ‘on the table’ or in the hands of your customer” — both of which hurt your bottom line.
Three general ways to think of pricing include: competition-based pricing; value-based pricing; and cost-plus pricing.
Competition-based pricing: In many cases you find that you are in a competitive environment and you must price to meet or beat your competitors (especially in the grain and feed business). In these areas of your business, it is very important that you be as efficient as possible. Since you have little or no latitude on pricing, controlling your costs is critical to your bottom line.
Value-based pricing: This is the situation where you figure out the value that your customer receives from your product/service and price accordingly. Certainly not all aspects of your business will be good candidates for value-based pricing; but think of those areas where you are really solving a problem for your customers in a unique way — and the value that you are delivering to your customers. These are also those cases where the customer cares more about factors other than price.