Proceedings of The World Avocado Congress III, 1995 pp. 461-466

 

INTEGRATED LOCAL MARKETING STRATEGY FOR THE SOUTH AFRICAN AVOCADO INDUSTRY

David Hilton-Barber

Chairman, Local Marketing Committee

South African Avocado Growers Association (SAAGA)

Tzaneen, South Africa

1. Introduction

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South Africa, although a comparatively minor avocado producer is one of the world's leading exporters with 70% and more of its annual production sold on European markets.

Returns from domestic sales reflected the lack of commitment to the local market. In 1993 SAAGA collaborated with a professional research company to determine the key success factors for improving avocado marketing in South Africa and to develop an action plan for its phased implementation by an officer appointed on a two-year contract for this specific purpose.

2. Workshop

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The first stage was a workshop attended by the major players in the industry to establish the dynamics for the local market, the product itself, local promotional history, pricing resources. The major issues were narrowed down to three.

2.1. Industry Structure and SAAGA’s Role:

 

The major issue was to get agreement on the structure of the industry and the part that SAAGA should play in the development of the local market.  The structure is set out in Figure 1.

The industry was then stratified-vertically into four groupings as set out in Figure 2.

SAAGA's role was then defined, at the first and second level, as one of communications, co-ordination and ensuring co-operation among the major players. At the third and fourth levels, the role changes to that of promotion and education; in other words, to create the marketing pull to complement the push role the producers have towards the distributors.

2.2. Long Term Commitment

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The second key issue identified by the workshop was long term commitment. Commitment calls for an organised professional marketing approach, marketing expertise, a market orientation and an adequate marketing budget.

 

2.3. Implementation:

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The third issue was the need to establish the logical dimensions of all the tasks involved and to appoint staff to implement a focused, inter-related series of strategies.

3. Fieldwork

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The consultants then tested perceptions among distributors and intermediaries of the avocado industry. The major findings were that the market place was extremely well disposed towards avocados and there was a strong desire among distributors to work with the industry.

4. Final Integrated Strategy

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4.1. Target Markets, Objectives and Means of Achievement

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 TARGET   OBJECTIVES                   MEANS

 ----------------------------------------------------------

Members    Keep them informed of                  simplified version of

SAAGA's plans                            marketing strategy

 

Influence producers                       Visual material

pricing strategy                              (videos etc)

 

Report back on                             Annual marketing Conference

successes achieved

 

Report back on                             Monthly newsletter

criticism/weaknesses                    

 

Report back on                             Meetings

Focus group findings

 ----------------------------------------------------------

FPMs       To increase volume                        Point of sale

turnover

chains       To communicate quality/                Reproduction of

price relationship                            literature

Green-     To emphasise that                           Avocado workshops

Grocers    Consumers view quality

over price                                      Market statistics

Informal   To generate dialogue                      Ripe and Ready stickers                                                                                                                                 

Sector

 Meetings with officials

Avocado Promotions

Visits to producer

areas                                                                                         

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Consumer  To promote health and                 Nutrition leaflets

                  nutritional aspects                        (sponsored)

   To educate consumers re                Interviews with

   ripening signals                               SAAGA's dietician

   To demonstrate avocado's             PR Consultant's                                                                                                                                                                                                    versatility                                          recipes                                                                                         

   To capitalise on                             Magazine features

   editorial and radio/TV                   Visits to producer

   opportunities                                 areas                                                                                                                                                                                                 

 

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References

Farrell David, Study of the Local Market for South African Avocados, 1991

New Products Laboratory (Pty) Ltd, Integrated Marketing Strategy for SA Avocado Growers Association, October 1993

 

 

 

Discussion ----------

Long Term Commitment

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The second key issue identified by the workshop was long

term commitment. The industry is still export-orientated.

The South African avocado industry has never been

controlled (as are the citrus and deciduous fruit

industries) and*in place of single-channel marketing, a

number of export companies compete for the fruit on offer. Notwithstanding this intense competitive spirit, there is co-ordination of export volumes to prevent peaks and

valleys on the European market. This is done by the

voluntary exchange of information which can well be

mirrored in local market co-ordination.

Commitment also calls for:

• meeting the consumer's needs for quality, freshness a

good appearance and an acceptable price;

• a detailed understanding of the market, its

segmentation and potential;

• cost-effective distribution and consistency of supply;

• educational and promotional activities aimed at the

trade and the consumer;

• and product packaging which is compatible with the

demands of the market.

As discussed under industry structure, SAAGAFs role is not

that of a marketer per se. SAAGA's job is to communicate, co-ordinate and ensure co-operation amongst the marketing companies involved in the domestic market.

Fieldwork

The detailed findings and conclusions in the fieldwork phase we 1. The marketplace is extremely well-disposed towards

avocados which are considered unique and with no real

direct competition.

2. The preoccupation with exports presumes a "second

best" status for fruit marketed locally.

3. The industry has done little to help itself or its

allies in the distribution of fruit. Consequently the

market is poorly educated particularly as far as cultivar quality and ripening.

4. Notwithstanding this, there is a strong desire among distri to work with the industry to increase trader.

5. The promotional resources should be directed at point -of-sale rather than consumer advertising.

Final Integrated Strategy

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objective: To create commitment to the controlled development of the local market through the implementation of a focused, inter-related series of strategies.

The consultants recommended a three phased programme:

Phase 1: Sharp focus

- Confining the programme to the'Gauteng area

- choosing one major retailer only for internal promotions - Confining oneself to the Johannesburg FPM

- Selecting key greengrocers as a first-season pilot group - Confining oneself to above-the-line media which reaches

this geographic area only

Phase 2: Medium Focus, extending the above to a larger area

Phase 3: Broad Focus, moving to a conventional nation-wide sales, distribution and marketing programme.

Sharp Focus of the Integrated Marketing Strategy ------------------------------------------------

The Product: the avocado is a popular member of the

fresh produce community. Marketed properly, it has major further sales potential. That said, there are high levels of ignorance concerning avocados in general and the Hass cultivar in particular. This ignorance is centred upon ripening status, health and nutrition, and cultivar types.

Two other areas of concern are local market quality (second best to export) and seasonality (not available for three months of the year.)

Product Strategies* Although overlapping with the promotional area of strategy, the recommended product positioning should be, in order of importance:

- How to identify ripeness

- Health and nutrition

- Versatility

Technical research was suggested to extend the season by

two months through late hanging in cooler areas, controlled atmosphere or even importing from elsewhere, and then, if this is feasible, to conduct test trials among key distributors.

Consumer research was also recommended with an on-going series of focus groups held initially in the production

area and Gauteng, eventually extending these nationally.

The format would be standardised to enable a benchmark process as follows:

-   Frequency of use

-   Diversity of use

-   Where purchased

-   Perceived negatives

-   Perceived positives

-   Product knowledge (or ignorance)

-   Ripening knowledge

-   Health and dietary knowledge

Price: SAAGA cannot dictate price to the industry as this falls outside its mandate. However it should educate producers to the concept of premium price for premium quality.

Distribution: Presentations/negotiations must be undertaken with each of the parties concerned in order to agree the distribution strategy as part of the overall promotional presentation to these parties. In the case of retailers this would include showing draft concepts, budgets and

modus operandi.

A series of meetings should be held with those precluded from this first phase to reassure them that it is a pilot scheme to provide SAAGA with a learning curve and to iron out wrinkles, after which it will be extended to all

parties on a national basis.

Review formats must be devised for SAAGA to report back according to a predetermined set of criteria and frequency.

Promotion: This is the most critical of SAAGAfs overt activities against which its performance may be measured. success in this area will ultimately govern the support it receives from the industry as a whole and upon which will depend the success of the entire programme.

Appointment of Promotions Co-ordinator -----------------------------------------

The committee recommended the appointment of a Promotions officer on a two-year contract to implement the agreed

task. The post was advertised and three candidates were short-listed and interviewed. The successful applicant was appointed and the following job description was mutually agreed for the officer.

Mission:

To increase public and trade awareness and consumption of avocados on the domestic market by co-ordinating research, communication and promotion involving growers, the trade (fresh produce markets, retail chains, greengrocers, the informal sector), the media and the consumer.