If you Think Profit – you will find Profit

I am going to give away a secret to making money in the cattle business, no matter which segment you are in.   You must think profit, and commit to it.   If you hope to make a profit but spend most of your time worrying and/or thinking about losing money the predominant thought will certainly cause you to lose money.   And you already have your excuse handy, its these up and down markets that make it impossible.   There is nothing we can do right.   However, if you commit to making a profit you will find yourself taking the necessary steps to hit that mark.

Here’s my closing thought this week: People are upset and saying silly things like the market is broken and we need government intervention or a bail-out for cattlemen.   I, once again, outlined the market is trying to help us this week.   How is that broken?   We can make money on fats.  We can make money as back grounders.   The cow calf operator can make money with all the different classes of cattle in their inventory.   The market is giving us a chance to make some real money right now.   It’s also giving us the opportunity to lose big.   Our free will and our way of thinking will dictate which side we choose to walk on.

https://farmprogress.com/marketing/black-swan-markets-still-offer-profits

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The 6Ps of Cattle Marketing

by Ken Brubaker | Aug 15, 2015 | Brubaker Blog |

Product – Price – Place – Promotion – Possession – Planning

By Ken Brubaker, Brubaker Sales & Marketing, All Rights Reserved

Everyone measures their success in the Cattle Industry differently. Those goals may have many different meanings from producing and showing a National Champion to having a successful production sale or just having a productive sustainable breeding program. The Cattle Industry is one of the most diverse industries in our country, with many breeds, philosophies and kinds of cattle being produced. The great thing about that diversity is there seems to be a buyer for everything of quality within those different kinds. Our industry is very similar to the automobile or fashion industries. Over the years our industry has gone through many changes and usually those changes have translated into income. Right or wrong change equals an increase in income. When you have something that nobody else has they will want it.
Successful programs spend as much time developing and maintaining a marketing program as they do their breeding program. Regardless, if your program’s end product is feeder cattle or seedstock understanding and utilizing the basic principles of marketing give you an advantage and a much greater chance for success.

There are two truths that you will deal with in your marketing program. “Perception is Reality” and “You can have the best cattle in the world, but if nobody knows about them, how can you sell them”. Marketing is more than advertising, as you will see further in this article, advertising is only part of your entire Marketing Program.

Your Customer – Target Market

Before we get into the specifics of the Six P’s an understanding of your customer or “Target” audience is essential. As we already discussed the Cattle Industry is very diverse. Therefore, marketing to the entire industry is a waste of time, money and resources. It is critical to identify who your market is and get as specific as possible to reach that market. Some programs only sell bulls while others only sell females and some programs sell both. That along with identifying what type of breeder will buy your cattle based on pedigree, kind and philosophy allows you to be more efficient with your budgeted dollars and ultimately the results.

Identifying your customer is essential as the first step to guide you in all facets of your Marketing Program. While its true that you never know where your next customer will come from, it is important to understand demographically where your base will come from. Where, who, what are all part of identifying your base. If you are selling bulls to commercial producers, sell the benefits of those bulls and promote the sale to that audience.

Planning – The First P

The saying, “if you don’t plan – you plan to fail” is particularly true when it comes to developing a successful breeding program and marketing program. Planning is an essential part of your success.
Planning your advertising and marketing effort to dovetail with your breeding and calving seasons is important, so that your product is what it needs to be – when the buyers will buy it. If you are planning a bull sale and you calve in April-May you would not want to schedule your sale for January when the bulls are less than a year old. You will compromise their fertility, performance and data with underage bulls. Schedule your sale after the bulls reach a year of age or perhaps even sell them in the Fall as long-yearlings.

Measurements are important to most buyers, both, commercial and purebred producers. Planning your sales effort with your ability to acquire and record that data is important to give potential buyers the information they require to make buying decisions. Planning your breeding program so that you can acquire necessary data in time for your sale is important.

Product – What Are You Selling – Getting Your Piece Of The Pie

The most successful programs that I have observed are those that have a clear vision of what their product is. They have a mission or goal of the type and kind of cattle they wish to produce and a solid philosophy regarding management of those genetics.

It is important to differentiate your brand or product to buyers so they can relate to the genetics you provide them. While thousands of people breed, grow and sell Angus Cattle – not all programs are the same and not all genetics are the same. Product differentiation allows your buyers to zero in on the attributes and benefits of your genetics. In the grand scheme of things the cattle industry is a big pie and you want to get your share of that pie (market share). This is a tool used by other products and industries.

Look at how the soft drink industry has differentiated their products to gain market share. Coke is not just Coke anymore it is – Diet Coke, Cherry Coke, Coke Zero, Caffeine Free Coke and on and on and on. Regardless if you buy a Coke or a Coke Zero you are buying a Coke rather than a competitor’s product – increasing your market share of the soft drink market.

Identify your product to your customers and potential customers and promote the attributes and benefits of your gene pool. Production and performance will be a part of identifying your product – SO KEEP RECORDS ! Production information such as progeny ratios, calving intervals, daughters production are all important if you have identified your product as one that excels in maternal traits – so not only take down the information but submit it to the breed association so it is well documented. If you are selling bulls, birth weights, weaning weights, yearlings etc etc are all critical to give your buyers the information they want to make a buying decision.

Price – Getting Every Dollar They Are Worth

We all want to sell our cattle for as much as we possibly can. I am amazed how many times I go into a program and they expect top dollar for their cattle – but they don’t take care of the basics to create value and increase the value of the cattle they have for sale.

As mentioned above under PRODUCT, the money is in the details. Well documented production and performance information adds significant value to your product and increases price. Sure, some buyers are only interested in phenotype but most in today’s industry want to utilize the tools in the toolbox to make a decision, particularly since prices are at all time highs in all segments of the industry.

In addition to record keeping management also adds value. Nutrition, stock development and herd maintenance all play key roles in adding value. Over fed or under fed cattle will not command the highest value. Providing adequate nutrition to all the cattle to express their genetic potential at optimum levels gives you the greatest chance to add value to your product. The best pedigree and the best cattle “on paper” will not bring the best dollar if you don’t pay attention to the details of records and management to add value to your product.

Place – Where Do You Sell Your Cattle

If you are selling privately off the farm or ranch then you need to make it easy for buyers to find you and provide directions to them. Same is true if you are having an auction but you may have choices. An auction at the farm requires more facilities and more work to have that sale regardless if it’s a pen sale, video sale or traditional auction with cattle coming through a sale ring. You may find it easier to utilize a stockyards, fairgrounds or even a neighbor that raises another breed of cattle that would allow you to rent their facility.

All of these options have value depending on your circumstances and where you are located. The primary focus here is to conduct your sale at a location that is easy for buyers to find and participate.
More and more today we are holding video auctions where the cattle do not walk through a sale ring. These sales can be held anywhere. They can be held on the ranch or at a hotel that is in the nearest town. They could be held miles away if that is most convenient to the buyers to attend.

Possession – You Don’t Have A Sale Until The Buyer Takes Possession

This part of the Marketing Mix may sound self-explanatory, however, this is a key part of the mix. You conduct a sale and the buyer shows up pays for his purchases and loads the cattle and takes them home – you are done right ? No ! If he purchased purebred cattle then the possession of what he purchased is not done until you transfer the registration papers.

Many of the cattle we sell today are sold to absentee buyers – they are not present at the sale. Shipping costs today are higher than ever before with fuel prices what they are. It is a critical component of the sale to provide your buyers with service to arrange trucking

Promotion – It’s More Than Just Placing An Ad Somewhere

A successful Marketing Plan begins with a budget to keep you on track. This is always our starting point as it guides us through the process of keeping costs in line while placing a priority on media that reaches your target market. Our 20 plus years of experience in the advertising industry has given us insight to these different forms of promotion as there are advantages and disadvantages to all of them.
It is well documented that the most successful Marketing Plans utilize a mix in the kind of promotion used to reach the target audience. Technology has driven many changes in that mix over recent years, particularly since more consumers have access to high speed internet. Finding the mix that best reaches your target market has some trial and error to it. Talk to your customers and ask them what they read and how they get their information.

Print Advertising

Print advertising includes magazines and newspapers that cover both regional and local audiences as well as national. A mix of all of these types of print advertising should be utilized as long as they make sense and reach your target market. Our budget will be limited therefore we try to utilize publications that give us the greatest “bang for the buck”. Dare to be different in your ads to capture attention. Your ads need to stand out and capture the reader’s attention.

Broadcast Advertising

Radio and TV provide opportunities throughout many parts of the country and deliver a low cost/thousand audience. Broadcast advertising puts immediacy to your message. Prepare yourself for some sticker shock with some of this media but our research has shown that it can deliver new customers to the established program and bring an industry to a new program.

Electronic Advertising

Electronic media in the form of the internet and E-Mail have exploded over recent years. This is largely due to the ease at which you can create content and copy but more importantly the low cost.
Website – for as little as $500.00 you can direct your customers and potential customers to an electronic brochure that gives them information about your program. Websites should be simple and easy to navigate through. You can give customers a tour of your ranch and cattle program while they sit in their living room. You can offer cattle for sale and promote your production sale very inexpensively particularly when you promote it through an E-Blast program as we have at BSM.

E-Mail Blasts

This service has exploded in recent years with many firms offering the service. Be careful through – just as in a “snail mail” mailing list it as only as good as the database. The database needs to be constantly added and deleting bad addresses that waste your effort – however the cost to do this is very cheap and can add further traffic to your website and more interest in your upcoming sale.

Direct Mail Advertising

Traditional direct mail, brochures, sale books or newsletters are still very affective tools. Not all producers use the internet (or do not use it regularly) and will not get your E-Mail or view your website.

Attractive brochures and newsletters grab attention and can tell your story. Many producers will keep your brochure to refer back to when they are ready to buy.

Brochures, newsletters and post cards can be expensive to produce however they are still cheaper to mail than a sale book. We have found it a good strategy to send out the direct mail first and ask for a sale book request – rather than mail thousands of sale books that can run as high as $3.00/each with postage.

Personal Selling

Nothing takes the place of personal selling. While you may hire a firm like Brubaker Sales to do a lot of the for you – many customers still want to talk to you and get to know you before doing business.

Attend events locally, regionally and nationally and give others an opportunity to get to know you – I’m sure you are a likable person and this will allow a selling connection – even if you never try to sell them anything. Get involved with breed associations and cattleman’s associations to build relationships with other producers that can become your customer.

Outdoor Advertising

You may be amazed how important a sign at the end of your lane or along the highway can be to your marketing program. Not everyone has a location suitable to a billboard on the interstate but if you are this can be a great way to promote beef to consumers and promote your program.

Customer Service

I’ve included Customer Service as part of promotion simply because that is exactly what it is. Good customer service becomes good promotion and bad customer service becomes bad promotion. In our industry we deal with mother nature and things don’t always turn out the way we want – we can limit the negativity by working with a customer to repair the problem. The programs that take care of their customers keep their customers and those that don’t loose them. Be fair and responsible to your customers and they will return to do business with you for many years.