Session 16: Compost Marketing and Sales

Transcription

1 Session 16: Compost Marketing and Sales Charles Duprey President, Naturcycle, LLC Special Thanks to Ron Alexander R. Alexander Associates Inc for Slide Content

2 Naturcycle, LLC Focused on compost sales and engineered soils in the Northeast. Experienced sales person, and former Sales Manager for one of the largest Composters in NE. Oversaw four person sales forces Contact Info:

3 Naturcycle Compost Projects

4 Charles Duprey Treatment Plant Green Roof (Bronx, NY) 4

5 Overview What is Marketing Marketing vs Sales Distribution Options Branding Product Knowledge Compost Sales Preparing a Marketing Plan

6 What is MarkeLng? - Communicating value - The action or business of promoting and selling goods or services - The management process by which goods and services move from concept to customer Because the purpose of business is to create a customer, the business enterprise has two and only two basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs. Marketing is the distinguishing, unique function of the business Peter Drucker

7 Marketing vs. Sales Role of marketing create prospects for sales and keep the market informed about the compost product Role of sales turn prospects into cash as efficiently as possible; stay in touch with existing and potential customers Recognize geographic constraints Cost of shipping compost limits markets to a mile radius from composting facility Recognize that many buyers do not understand what compost is and how it should be used

8 Key Elements in your MarkeLng- Developing a markelng plan ProducAon / facility Product development Market research PromoAon EducaAon Sales / distribuaon

9 Compost Markets Traditional Markets Homeowners/gardeners Landscapers Containerized horticulture Turf / Topsoil Manufacturing Emerging Markets Erosion & Sediment Control Agriculture (re-emerging market) Soils Creation Bioremediation of contaminated soils

10 Compost Markets Value vs. Volume Markets Retail vs. Wholesale Markets Value Markets Higher value (golf courses, nurseries, sports turf) Quality and consistency more important than price Volume Markets Price is key defining criteria Agriculture, erosion control, remediation, wetlands Retail characteristics of both value and volume Wholesale can be extremely price-sensitive

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12 Marketing Objectives Objectives: Selling existing products to existing customers Developing new products for existing customers Extending existing products to new customers Developing new products for new customers Quantitative, in terms of values, volumes, market shares, profitability Consider 3-year planning horizon

13 Distribution & Marketing Options Distribution Options: Wholesale Retail Distributors In-house use Marketing Options: In-house staff Contracting with private-sector broker Self-use Give-away

14 Distribution Options: Wholesale Examples: landscape, agriculture Users are familiar with soil characteristics and benefits of adding organic materials Focus on specific qualities of your product and their specific applications be knowledgeable Issues: product availability and delivery; storage and handling; seasonality of market, price, branding Block sale concept Certifications, education

15 Distribution Options: Retail Requires product branding (name, logo) and promotional materials Message should focus on specific qualities of your product in residential and commercial horticulture/landscaping Watch for stigmas (e.g., feedstock, contamination) Very high repeat sales quotient with good and consistent product quality Form bulk vs. bagged, blends

16 Distribution Options: Wholesale and Retail Avoid perception that compost is a valueless product!! (Asset vs. liability) Develop education and outreach materials Set up visible demonstration plots Ensure high product quality Word-of-mouth will provide most effective advertising Marketing vs. sales activities

17 Distribution Options: Distributors Reselling through retail or wholesales distributors Product branding is important They promote your brand for their own profit incentive Develop chain focused on specific markets to access, geographical region, market segment Requires moderate level of marketing resources Need to provide tools and training for best results

18 Distribution Options: In-house Use In-house use Demonstrates a confidence in product quality Residential and commercial markets can see the results of compost use Product branding not as important Can save money on fertilizers and fungicides (pesticides) Can potentially absorb a lot of product Inter-department coordination and education vital Requires low level of marketing resources

19 Marketing- Product Branding

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22 Branding Symbolic embodiment of all information connected to a provider Serves to create expectations and associations Brand image create impression that product is unique or special Brand experience if positive, customers will often choose branded over generic items Trademark all brand names of products Color scheme

23 Logos Graphic element, symbol or icon of a brand Effect should be instant recognition Differentiator Unique to you Components be distinctive! Icon the image Logotype letter font Slogan convey the message BMW The Ultimate Driving Machine

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25 PromoLon / AdverLsing Critical in establishing brand recognition Must control costs, have budget Convey your message! Methods Internet / Social Media - Billboards TV - Radio Infomercials - Trailers Display signage at projects

26 Promotional Advertising Generate leads.

27 Promotional Activities

28 Marketing Demo Projects Worked with NCDOT on erosion control demo project (I-40, Exit 37)

29 Be Knowledgeable About the Product

30 Compost Use Guidelines Soil incorporation as amendment 1 to 2 layer, incorporated to 270 cubic yards per acre Mulching for weed control 2-3 layer evenly spread on surface Topdressing for turf improvement 1/8 1/2 layer spread after aerating Planting mixes for containerized horticulture 15-33% inclusion in media Topsoil blending 25-50% of mix compost and fill dirt Land reclamation cubic yards/acre

31 Benefits of Compost Use Physical: Chemical: Biological: Other: Improved structure Moisture management Modifies and stabilizes ph Increases CEC Provides nutrients Provides soil biota Suppresses plant diseases Binds/degrades contaminants Binds nutrients Sequester Air-Borne Carbon

32 Marketing Strategies In-house program requires: Market research Coordination of product utilization research Highly visible demonstration sites Professional education and outreach materials Staffing Broker/blender Reduces risk of market failure Revenue and control are reduced

33 Factors Affecting Distribution and Marketing Strategies Level of available resources to implement strategy Quantity and quality of compost produced Types and sizes of markets in your marketing region Risk and revenue expectations Program goals Most use more than one distribution channel and one marketing strategy ORGANIZED & EDUCATED EFFORT

34 Preparing a Marketing Plan Identify Target Markets and Distribution Channels Develop a Product Specification USCC STA Compost Technical Data Sheet Develop a Program Budget Develop a Pricing Structure Develop Product Utilization Guidelines Develop a Product Identity Plan Research & Demonstration Projects Plan Public Relations & Education Strategy

35 Pricing Structure Survey the competition within 100 miles Both municipal and private If retailing, set price just below others Use lower unit price for large volume purchasers (> 50 CY) Decide who will pay shipping costs Prices vary: (wholesale vs. retail?) $5-$15/CY for municipal facilities $14-$25/CY for private composters Charge a fair price for the product!

36 Public Relations & Education Product Literature Demonstration Sites Public Presentations Articles in Local Press Print and Other Media Advertising Displays/Exhibits Facility Tours

37 Selling Your Compost

38 Compost Sales Bulk vs. bagged sales Most composters sell in bulk (per cubic yard, or per scoop ) Bagged product requires outlets through big box stores or mom and pop garden centers Extremely difficult to ensure adequate profit margins Much more profitable selling to garden centers, but lower volume potential Sell to public at composting facility or sell through broker Pricing Determined by competition in your mile radius In NC, statewide average is $20/CY Larger orders will expect discount Tractor-trailer load volumes, multiple truckloads Pricing may also be influenced by feedstocks used Manure & food waste composts vs. biosolids & mortality composts

39 Sales Staff Necessary skills or knowledge base The composting process Compost application & benefits Product quality issues Government regulation Health, safety, & environmental issues Competition Prior research The green industry User needs Basic sales and marketing

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41 Attributes of a Compost Supplier Produce compost possessing attributes / characteristics that meet end user or application requirements Supplies/produces a consistent product Has implemented an on-going quality assurance or testing program Can supply current compost characterization data (quantifying and qualifying their product s attributes) Field Guide to Compost Use, US Composting Council, 1996

42 Attributes of a Compost Supplier Provides good overall customer service, employs a service minded staff Can assure prompt and reliable delivery (size of truck and mode of unloading are also important) Possesses adequate storage to ensure availability Can provide technical assistance regarding end use Field Guide to Compost Use, US Composting Council, 1996

43 CompeLLon Peat? Topsoil? FerAlizer? Other composts?

44 Developing A Sales Strategy Set up pricing structure Set up Information Management System Record sales, price paid, buyer info Recruit sales staff or hire broker Develop promotional materials Get out and talk to buyers Market research is key!

45 Understanding The Customer How does compost benefit the customer? Benefits identified by purchasers of compost Helps reduce soil compaction Helps increase water retention Helps hold on to nutrients Helps reduce chemicals needed Reduces erosion Increases infiltration Reduces some plant diseases Increases porosity Talk the customer s language what s in it for me? Different benefits are important to different end users

46 Understanding The Customer Anticipate the customer s concerns: What is it made of? How do I know how good it is? Are you sure it is safe how do I know? If it is so good, why is it such a bargain? Will you guarantee it if it kills my plants? What if my kids or dog get sick? Consumer education shortens the list of questions! Handling Objec;ons

47 Sales Information Management Feedback essential to strong sales Develop sales reports monitor goals By Product for product managers By Customers for salespeople By Geographical Area for advertising By Market for marketing staff Allows understanding of total market size, market share and projected vs. actual sales data

48 Hiring A Broker Negotiation Issues Amount of material to be marketed Length of contract Sole-source contract Pick-up/delivery schedule Revenue sharing & reimbursable costs Storage costs and locations Bonding/guarantee requirements Educational/promotional responsibilities Use a formal contract agreement

49 Promotional Materials Product Information Brochures Product Utilization Guidelines Compost Technical Data Sheet Consider logo ed giveaway items Hats, tee-shirts, pens, coffee mugs Your objective is to keep your products name(s) in front of possible buyers as much as possible

50 Sales- Why Should They Buy Your Compost? Quality-Quality-Quality Only sell mature, stable product Effectiveness Insurance Price (Value) Volume markets lower price Convenience Make it easy for customers to pick up Delivery Deliver the compost in a timely manner Cost, bulk density issues

51 Compost Market Development/Sales Investment (2-3 years) Cost Time Staff Game plan

52 Any Questions? Your marke*ng / sales challenges? Ideas? Good Bad?

53 Review Learned What is MarkeLng What DistribuLon OpLons are there for me? StarLng your Branding focus Building Product Knowledge Discussed compost sales Preparing a markelng plan around your unique goals and needs

54 Marketing Plan Exercise

55 Marketing Plan Exercise Groups of 5-6; Each group is one team Each team to meet for 20 minutes Scenarios: #1 Municipal Biosolids 75K CY/yr #2 Private multi-feedstock 35K CY/yr #3 On-farm composter 8K CY/yr Develop conceptual marketing plan Include 2 strategic marketing goals Include 2 tactical marketing actions Attempt to address questions One team member explain team s results to the group