Agriculture Reference
In-Depth Information
apples, red capsicum and tomatoes can affect sales across the whole category.
The key is to use red as a draw card to attract customers' attention. We recom-
mend placing red produce in the middle of displays rather than at the end of a
display as this will help even out sales across the display: the customers' eyes
will focus on the end of the display and then the middle of the display.
Keep within the law
As mentioned at the start of this section, farm shops are becoming more
popular and a major driver in food tourism. They are a form of retailing
and must comply with the local retail regulations in the area. They will need
planning permission and the local authority can help with advice in this area.
Planning permission will include access from roads, building regulations,
road signage, advertising and fire regulations.
The Food and Safety regulations also apply to the farm retail store. This
will cover food labelling, food and personnel hygiene, animal and meat
products, food additives and packaging materials and those regulations will
change from region to region.
Price perception
When we talk to farmers about food tourism, price is often a subject that is
discussed. How much is a visitor prepared to pay?
Price is about perception and large successful retailers have done an
excellent job when it comes to price perception. Within Australia and the
USA, retailers promoting by-lines like 'everyday low prices' or 'low prices
are just the beginning' have successfully presented an image to the public
of being the lowest priced retailer in the category. Research has consistently
shown, however, that more often than not they are not the price leader, but are
in actual fact the price 'perception' leader. Consistently these large retailers
have produced the highest gross profit margins, making them daunting com-
petitors to smaller on-farm retailers who feel the need to follow and compete.
Promotions conveying the message that if a customer can find an iden-
tical product for a cheaper price at another outlet it will result in a price
match or bonus discount have further supported low price perception that
these large retailers are the source of the cheapest product.
Price perception is the single biggest driver to consumers considering a
shopping category. It would be fair to say this is reflected in the real world
with these price perception retailers managing to expand at rapid rates and
return high levels of profitability.
So how do you match a price-perception retailer?
You certainly do not mark all your merchandise down. The art of perception
is about visual impressions. This is how you create the visual price competi-
tive impression. Select five high-profile consumable products and position
them in the highest profile positions within the store and mark them at the
most competitive retail price in your 10 km radius.
Positioning signage that states the farm provides the best value in the
region will help build that perception. Statements like 'compare our value'
