Effectiveness and Impact of StateGrown Promotion Programs

1
Effectiveness and Impact of State-Grown Promotion
Programs

• Dr. Wen-fei Uva
• Senior Extension Associate
• Department of Agricultural, Resource, and
  Managerial Economics
• Cornell University
• September 1999
• Modified by Georgia Agriculture Education
  Curriculum Office
• June, 2002

2
(No Transcript)
3
Current Situation

• Food travels an average of 1,300 miles before
  reaching the consumers table in the U.S.
• More than 20 state-grown promotion programs in
  place
• Administration typically rests with the states
  Department of Agriculture
• Funds from state sources often combined with
  funds from licensing fees and private sector
  contributions.

4
State-Grown Promotion Programs

• Common Objectives
• Promoting broad groups of food and agricultural
  products produced within the state.
• Support the local economy
• Agricultural market expansion and development

5
Marketing Concept Differentiate Locally-Grown
Products -- Building a BRAND Loyalty
6
To increase sales at any price -- Reduce
consumers sensitivity to price change
7
Some Research Results Related to Product Origin
Promotion Programs
8
References

• Brooker et al. 1988, Pick Tennessee Product
• Cambell and Feenstra 1998, The Case of
  PlacerGROWN (CA)
• Jones et al. 1990, Ohio Fruit Producer Survey
• Lockeretz 1986, Urban Consumers Attitude towards
  Locally Grown Produce
• Michigan Dept. of Agriculture, 1989, Yes!
  Michigan
• Patterson et al. 1999, A Case Study of Arizona
  Grown
• Ramu et al. 1998, The Case of Jersey Fresh
• Stern and Douglas 1999, Western Massachusetts
  CISA Study
• Skinner et al. 1999, What does the Made in
  Vermont Label Mean to Consumers?

9
Attributes of Locally-Grown Products Valued by
Consumers

• Top of mind beliefs
• Quality
• Freshness
• Taste
• Healthfulness
• Positive experience
• Other positive messages
• Sustainable community development
• Contribution to local economies
• Community connection
• Environment quality

10
Consumer Responses

• Produce display and TV were the most effective
  for building awareness
• Think local produce in the summertime
• Prefer to buy local products if given the choice
• Expect good quality from locally-grown products
• Branding of locally-grown products could not
  substitute for quality
• Consumers who were biased towards the locally
  grown products were most influenced by the logo.
• Messages at a direct marketing environment
  aremore effective

11
Whether or not consumers express preference for
locally produced foods, their buying behavior
will depend upon availability of local products
at competitive prices and acceptable quality.
12
Supermarket Customers

• Liked attractive price tags and produce display
  with the logo
• Disliked the additional brochures given in the
  store
• Higher educated people were less affected by the
  logo
• Processed and convenient food buyers were less
  likely to look for products with the
  locally-grown logo
• Majority (3/4) will NOT change stores to buy
  local
• Most (90) will prefer the grocery store to have
  a greater selection of local produce.
• Repetition of the messages in different forms

13

• Consumers are facing information-overload by
  in-store promotion when shopping at grocery
  stores
• in-store POP promotion alone is not effective
• Consumer loyalty cannot be built through logo
  alone communicating information of additional
  benefits is needed.

14
Producers/Farmers Response

• More likely to participate if they are informed
  of the consumers awareness of the program
• 1/2 will participate the program if it is free.
• Most commonly use the logo on price cards,
  posters and banners, and produce displays.
• The general state-grown promotion program is more
  popular than quality-control program.
• Larger farms and older producers are less likely
  to participate in the state-grown promotion
  program

15
Retailer and Wholesaler Aspects

• Responded the state/locally grown logo added
  value freshness to their produce
• Liked the POP materials the most and media
  promotion
• Retailers are more likely to participate in the
  program than wholesalers
• Primary wholesalers (gt75) are less likely to
  participate in the program
• Producer-wholesalers are more likely to
  participate than non-producer-wholesalers.

16
Program Evaluation Results

• Promotion always has positive effect on sales
• Premium local products can demand a premium price
  when treated as a different product from
  non-local products.
• Ensuring quality is more important than price
• Program visibility and continuity is important

17
Program Evaluation - continued

• Jersey Fresh
• Each 1 spent on the program resulted in a return
  of 46.90 to NJ Agriculture
• For every 1 spent on the program the local
  farmers earned an additional 15.20 in net farm
  income

18
Campaign Components

• Designated Management
• A Promotional Campaign
• Logo, Slogan, POP materials, Posters, Signs,
  Stickers, Educational Materials
• Information
• Farm Map/Directory, Harvest Calendar, Regional
  Food/Nutrition Guides, Features of Participants
• Promotional Vehicles
• Newspaper, Radio, Cable TV, Billboards, Public
  Media, POP materials, Local Partnership
• Education Program for Participants

19
Effective Promotion Messages

• A single promotion campaign
• Messages of quality and freshness
• Clear labels
• Increase convenience and availability to buy
• Contributions to the local economy and community
• Use local farmers to communicate health and
  education professionals as support
• Messages for non-local groups - tourists,
  out-of-state

20
Keys to the Success of a State-Grown Promotion
Program

• A vision
• Seed funding
• A champion to carry through
• A program supported by different sectors of the
  community, not just the ag. sector
• A sense of immediate threat sufficient to
  motivate action among community groups
• Political leadership and technical support

21
Challenges

• Maintain interests among producers, businesses
  and consumers
• Continuity -- The 5-year rule of thumb
• Identify funding sources for long-term
  sustainability

22
Evaluation Questions

• Whether consumers are aware of the promotion
• Whether the origin of food products matters to
  the consumers
• Whether the promotion influences their
  preferences buying behavior
• The effects of promotion on product sales farm
  incomes