Formulation of market strategies - Market strategies for industrial aquaculture

Formulation of market strategies

The present organization of marketing available for aquaculture products has been described earlier, and it appears to meet the needs of a relatively small industry. However, the expected future expansion of the industry may warrant a reappraisal of existing market arrangements and the formulation of appropriate strategies. Cracknell (1979) suggested that the structure and philosophy of hunted fish channels of distribution should not be adopted in the marketing of aquaculture products, and a suitable model might be the organization which undertakes coordinated distribution and marketing of farmed meats. The strategies selected could relate to individual enterprises or farms or to the whole national aquaculture development plan. In either case, the main thrust of the strategy should be the full utilization of the advantages that aquaculture offers for satisfying consumer needs and tastes. Such a strategy can be expected to improve the economic viability of farming operations and help in meeting the objectives and targets of aquaculture.

Market segmentation and channels

The objectives of most aquaculture enterprises allow the identification of defined groups of customers or consumers for their products. Depending on the nature and price of the product, it can be low-income rural populations in need of a low-cost protein food or the discriminating high- and medium-income consumers who prefer farm-fresh products of high quality. Marketing may be designed to reach these selected groups, through what marketing experts call marketing segmentation. Restaurants and institutions are prime customers for aquaculture products. Besides product quality, restaurants need regularity of supplies to include the product in their menus. Regularity of supplies will also be needed for institutional customers, but it may be possible for them to use substitute products occasionally if the price and quality are acceptable. Supermarkets and grocery stores also look for regularity of supplies. Farming operations will therefore have to be adjusted to facilitate round-the-year supplies, when possible. Decisions on the location of the outlets are important and consumer survey data should indicate the most attractive locations.

For policy and business reasons it may become necessary to participate in an undifferentiated market and sell through capture fishery outlets. Even in such cases, aquaculture enterprises can benefit by restricting sales of

their products to off-seasons of fishing, and thus avail themselves of opportunities to raise their prices.

In developing country situations, where a suitable infrastructure for fish marketing does not exist, the establishment of adequate facilities for wholesale and retail marketing, as well as storage and transport, should get special attention. The establishment of fish markets has traditionally been the responsibility of governments and public bodies in many countries.

Product quality and presentation

In a strategy for marketing aquaculture products, greater attention has to be devoted to product quality and presentation. Experience has already shown the value of these in establishing lucrative markets. The production of pansize salmon and trout has helped to expand markets for the species and improve the economics of operations. The presentation of uniform-sized fish, fresh or frozen, could attract more customers. When there is a consumer demand for animals which are too small to be fished from natural stocks, as in the case of abalone, aquaculture could be directed to meet this demand. The potential for producing fish of the required colour and quality by suitable feeding during grow-out, and by appropriate processing, has been well demonstrated in sea farming of salmon and trout. The data collected through market research can form the basis for decisions on product lines that should be developed. In the case of aquaculture products like oysters and mussels, which may be eaten raw, there is greater public concern on possible contamination, when grown in waters that are likely to be polluted. Cleansing and purification procedures needed to ensure product quality have been discussed. Marketing of such products in packages containing certificates of inspection by competent authorities would greatly enhance customer confidence in the quality of the product.

Packaging of the product is equally important in building up consumer acceptance.

Besides protecting the product and improving its shelf life, packaging fulfils a promotional function as well. This is especially important when sales are through self-service super-markets and grocery stores.The package should

gain attention, describe the product features, provide consumer confidence and sustain the product image already established in the consumer’s mind through advertising (Chaston, 1983). Even a brand name for the product, denoting the image that is intended to be created in the customer’s mind, can go a long way in promoting the product. In many developing countries, where the major outlets for aquaculture products are open markets, the priority will be in providing fish stalls and sanitary conditions. Such markets offer opportunities for keeping and selling live fish and shellfish. This will be particularly attractive to customers who eat them raw and need them in an absolutely fresh condition.

The export of aquaculture products involves a more complex organization and often includes processing, quality control, long-distance shipping, import formalities and distribution in the importing country. If there is an established export trade of sea food, it would be simpler to utilize it, unless the magnitude of export warrants the expenditure and efforts involved in entering a foreign market independently and managing it to the best advantage of the exporters. Very often it will be necessary and possible to obtain governmental support for export trade, and this should be made use of, particularly by small producers.

Market promotion

The importance of market promotion in popularizing new products and non-indigenous species has already been referred to. The consumers have to be made aware of the comparative advantages of these products through promotional activities. Of the various promotional activities directed towards customer communication, advertising and personal selling are considered to be the ones that have long-term effect, in so far as sales are concerned. Tasting sessions, free samples, low-price introductory sales, etc., can have a short-term impact on sales. Public media can be used in educating potential consumers on the value of aquatic products in general as food, and the advantages of farmed products in particular. It is also an appropriate means of removing mis-conceptions about the food values, flavour or health hazards associated with farmed products. Publicity by producers will be less convincing than reports by public media. News-papers, magazines, radio and television could all be utilized, when possible, for educational purposes. Selection of the media should naturally depend on the section of the population to be reached.

The most effective means of marketing a product may be through personal calls to every potential customer. This will enable personalized communication and provision of additional detailed information that the customer may need. When large groups of potential customers have to be reached, personal calls will become impractical. The alternative then will be advertising, even though it has the inherent disadvantage of being only a one-way commu-nication process. Initially, the purpose of advertising is to generate awareness among potential customers. Even after a product has established itself in the market, advertising will have to continue to sustain consumer awareness of particular species and product lines.

Advertising is expensive and should therefore be properly planned to reach the audience to whom the message is directed. The message itself should be based on the results of market research on consumer behaviour and the most important benefit factor that will influence their purchase decision. It has, however, to be recognized that advertising alone, without the other components of the so-called marketing mix (product, price and location) will not lead to increased sales.