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< prev - next > Food processing how to find and keep customers (Printable PDF)
How to find and keep customers
Practical Action
Market research
Where foods are sold through wholesale agents or to distant buyers, processors may not know
the customers or consumers individually and hence they do not know their requirements. It is
therefore essential for processors to gather as much information as possible about all aspects
of the markets in which they wish to operate. To do this, they should conduct ‘market
research’. This is the process of systematically collecting and evaluating information about
customers’ and consumers’ needs and preferences for both existing and potential products.
The process also includes finding out the needs and requirements of buyers who supply these
customers. The general procedure for doing this is shown in Figure 3. Market research also
includes gathering information on how foods move from the producer to the consumer through
a distribution chain and the activities of competitors.
It is often easy to collect too much information, which may confuse decisions rather than
helping make them clearer. Processors should therefore decide from the outset which
information they must know, which information they should know, and which would be nice to
know. Only information in the first category is essential; the rest depends on the time and
budget that are available. There are two ways of getting this information: written (or
‘secondary’) sources of information and conducting a market survey of customers and/or
buyers. Written information (Table 3) is relatively inexpensive and quick to collect and can be
highly valuable in making reliable decisions.
The following source of information are useful to help make decisions on finding customers:
1) Before production starts:
Catalogues, advertisements or price lists of competitors’ products.
Items about competitors, their sales outlets or their products, featured in newspapers and
magazines and on radio or TV.
Articles in trade publications on new products or technologies.
Publicly available reports and statistics (e.g. census data, family expenditure data,
agricultural production surveys, import statistics) from government ministries, universities,
or other national and international organisations such as the World Bank, IMF, UNCTAD
and FAO.
Free or purchased information from chambers of commerce, manufacturers’ association
year books or trade directories.
Purchased information from studies by commercial research organisations (e.g. analysis of
advertising in different media, consumer buying habits).
For those with access to a computer, an Internet search using relevant keywords in a
search engine (e.g. a search for "beef+producers+argentina" produced 2,600 results). It is
important to use “ ” and + signs as shown to narrow the scope of searches and obtain the
most relevant information.
2) Later studies when production is established:
Reports from sales staff of discussions with customers or buyers.
Analysis of sales records and product performance (e.g. average order size by geographical
area, by buyer or distribution channel; sales by pack size).
Returned products or customer complaints.
Financial data on the costs and contribution to profits of each product.
Table 3. Sources of information on customers
There are many different types of market surveys but one of the most useful for a small-scale
processor is a survey to find the size and value of a particular market. This should also provide
information about who will buy a food, when, where from, what quantity and for what price.
(Market size is the total weight or volume of a food bought per month or per year, and market
value is the total amount of money spent on a product each month or year). Although
commercial market research companies exist in most countries, it is preferable for small-scale
processors to conduct their own market research. Not only is this cheaper, but it also means