1 Creating competitive position and choice of marketing and pricing strategy in the traditional food sector dr Tomasz Wierzejski r., Rzeszów

2 Definition of competitiveness „Competitiveness” is a phenomenon, in which participants compete against each other in their efforts to the same or similar purposes; This competition leads to the formation and development of market participants, while admitting a certain profit on the more entrepreneurial entity [Wójcik 2012].

3 Definition of competitiveness Ability to provide goods and services in place, form and time desired by the buyer, at prices equal to or lower than the prices offered by other suppliers. [Freebairn 1986]

4 Definition of competitiveness Competitiveness can be analyzed in the context of: - time (past, present and future competitiveness) - scale (micro, meso, macro) - scope (lokal, regional, national, global)

5 Market concept Market is a space, in which is created a network of mutual relations between the supply side (producers), and demand (consumers)

6 Competitive position is a definite „place” of a company, which results from its resources and systematic response to stimuli from the environment, both emerging opportunities and threats

7 Source of competitive advantage of the agri-food sector - The production costs - The quality of the product - Innovative technology / product - Logistics (distribution) - Flexibility and readiness for change - Creation of consumer needs

8 The behavior of the company and the behavior of competition (constant correlation) Game theory?

9 Who is your competitor? Analysis of the competitive environment is an important part of building the company's market position. It allows to: - following best practices - avoiding mistakes made by competitors - identification of potential areas of cooperation

10 Identification of the target group for the product A key element in determining the success of any business is the answer to the question : to whom I address my product?

11 Indication of the target group can focus all resources in the company in "legitimate" purpose. Therefore serves to rationalize actions taken, including marketing.

12 Marketing approach is based on the ability to anticipate the needs of buyers and behavior of competition in the perspective of at least several years. On the basis of market forecasts made by information collected from various sources, eg. by observing and collecting customer feedback, research institutes forecast reading, watching trends abroad, etc.

13 The product should be seen as a set of different benefits to the customer.

14 Plays the following role : - is the determinant of the value of the product - is a tool that impact customers and competitors - is the basis for the calculation of the margin - is part of the negotiation

15 The answer to the question of how to optimally goods should be delivered to the customer.

16 Inform and convince the client that our product is the bestInform and convince the client that our product is the best. For this purpose, a variety of promotional tools is used.

17 The ability to sell, especially in the context of direct sales, may be crucial for the success of the project. Sales staff

18 The modern consumer, when deciding on the purchase of food, it becomes more and more demanding, therefore, is not enough to fix good price and standard quality. For the appropriate product must go "package" - the message, philosophy, value…

19 As a result, the product on the market for traditional food offered in the form of direct sales, bears the marks of service.

20 What features does this "service”What features does this "service”? - is strongly linked to the seller - is determined by the sales-form - the usefulness of the food has a different character than other products

21 More attractive, for the customer, are products that are not only „food", but at the same time provide a high quality of experience.

22 As a result, the demand for this type of product is also unique - in the first place it is less dependent on the price.

23 Customer service is a set of operations to meet customer needs and their expectations. What are the key elements of customer service?

24 Features of a good seller: •competence, •kindness, •credibility, •reliability, •response, •communication skills.

25 What behaviors of seller do not tolerate clients?

26 Currently, emphasis is placed on the implementation of innovative products. What does it meen: innovative traditional food What are the attributes of innovation?

27 Innovation needs to be seen in the context of the consumer – he usually forces a change in the range of companies. Therefore, the product should be "more" innovative for the consumer than for the producer.

28 Good and in acceptable price merchandise is only the first step in the success of the market. It is not possible without proper communication with the client - Public relations (PR)

29 Pricing strategies Determination of the product price can be based on: - costs, for example: cost plus margin - consumer reaction - time and place of sale - activities of competitors

30 The high price of the traditional food product should advise the client of the high quality of our offer. Paradoxically, in this market, too low price can be an obstacle in creating a product characterized by high quality.

31 In the case of a sale at the markets, the customer can make a direct comparison of the goods and their prices from different vendors. Then the pricing should be different - adapted to the conditions of competition.

32 Price policy and market segmentation - diverse target group - varied offer - different prices

33 Margin on products unique (which does not have a competition) may be far greater than the common products. This is another argument for the implementation of product innovations.

34 Selected pricing strategies - skimming pricing - benchmarking - anchor - combined products - penetration

35 Skimming pricing The strategy is to inflate the price (at least in the short term) - applies particularly to new products entering the market. Overpriced gives a sense of exclusive goods. Moreover, in the long term gives the ability to reduce, without loss of profitable sales.

36 Benchmarking Pricing strategy consisting in systematic observation of the competition and to adapt its offer. In addition, observation of competitors also allows you to get to know the preferences of consumers in the market.

37 Anchor Want to sell expensive productAnchor Want to sell expensive product? Best place it on a shelf near a still more expensive. Price is a relative!

38 Combined products Sale in sets

39 Penetration Entering the market with a lower price than the competition – fix dumping price to build their own position in a competitive market.

40 Diversification of the offer and the systematic modification allows better protect themselves from difficulties in selling.

41 In the case of traditional products sold directly limited the supply chain from "farm to table”. Minimization of intermediaries should favor higher margin. What is the real situation?

42 Recently promoted fashion for healthy eating and active life should be a factor in the success of the sale less processed foods. This „free advertising” should be used

43 Barriers to effective selling traditional food : - relatively low affluence - relatively difficult access to this kind of food - unfavorable appearance of this type of products (packaging) - different (worse?) taste

44 Possible solutions. sales internationalization. product marketizationPossible solutions? * sales internationalization * product marketization * specific distribution model (what?) * the link to the tourist service

45 Optimization model of the company's competitive position in the traditional food sector

46 Examples of other countries Direct sales in Austria - sales forms: in the farm, roadside, in the marketplace, delivery by the seller, through exchanges of agricultural stores, by Internet, by catering - for 31% of households is important

47 Direct sales in Italy % of the agricultural use of the local cooperative adapted for direct sales - sale at farm stores (17.9%), markets (8.7%), home delivery (5.7%) - DS determines the development of investments in resources and staff - close cooperation with gastronomy

48 Direct sales in Germany - sales forms: in the farm, marketplace, roadside, Pick-your-own, farm stores, fixed delivery (Internet), cooperative shops - cooperation with catering and / or their own restaurants

49 Thank You!