By: Bill Engelbrecht
(Mr. Engelbrecht had a Masters Degree in Marketing, and he was a breeder of Angus cattle in Illinois. This article was originally published in a slightly longer version in a 1980 edition of “Drovers Journal”, but his ideas are still quite relevant.)
The marketing of purebred livestock is unlike many of the other activities that occupy our time. Many purebred livestock breeders in the Midwest make their money from corn and beans. Very, very few make their living from purebred cattle and, if the truth be known, most don’t make any money at all in the purebred cattle business. One reason for this may be a lack of emphasis on proper marketing.
Some people buy cattle to make money while others do it to lose money. Some buy cattle just to keep the kids busy during the summer and others to start them on a lifetime career. Some buy cattle because they like them big and ugly while others like them because they’re pretty. Some buy them based on reams of facts and figures, while others buy them not knowing a ratio from a ration. Some buy them to show and some buy them to perform, while still others buy them for no good reason at all.
When faced with this complex marketing environment, we often rely on our instincts as farmers. We become preoccupied with production and avoid the marketing function. Statements are heard like: “Our cattle sell themselves”; or “I’m not one of those promoters” or “our best ads are born, not written”, and “a good product sells itself.” Most of those statements hold little water when it comes to marketing purebred livestock and are pure “bullwash”.
Lets assume for the moment that you have your production—your product— in order. Naturally, you are going to try to improve it year after year, but today, your cattle are what they are and you are faced with marketing them. Let me then encourage you to put together a plan—to put it on paper—to stick to it—to work at it and to execute it on a long term basis.
Some of the things to consider in your marketing plan are as follows:
(Modern Photo by Diane Robertson)
1. State the Facts About Your Operation.
Before you do anything else you must accurately state the facts about your cattle. It is critical that you do this in a formal way—put it on paper. If the formality of doing this bothers you—keep in mind that it’s the “seat of the pants plan” that rarely works. Now, try to answer these questions about your product:
*Who has been buying my cattle for the past five years? List them by commercial, junior, purebred, niche market, etc.
*Where do they live? Put dots on a map.
*How much did they pay relative to the market and competition?
*What do other people think of my cattle program? (Get some help on this one—ask your spouse, a relative, your regional manager, state secretary or a fellow breeder who will tell you the truth.)
*Who are your competitors? By breed &/or end market. Where are they located?
*Who has been selling cattle in your area? How do their herds compare to yours?
*What do they have to offer that you don’t?
*How would you describe your program today? How do you want it to be in five years?
The end result of all these questions is that you have a thorough understanding of your product, your operation, your competitors, and your customers. All of your marketing, advertising, sales and promotion activity must stem from these facts. Nothing else is more important.
Now—and only now—you are in a position to identify the real opportunities and problems that exist for marketing your cattle.
2. How Much Should You Spend?
Quick now—how much did you spend in promotion last year? If you know what your last herd bull cost, what your new baler cost and what your feed cost, then you should know the same about this kind of expense.
You need a plan—a budget. You need to determine how much you want and need to spend ahead of when it’s time to spend it. Setting the amount to spend has a lot to do with whether you are getting started or are an established breeder. Whether you are aggressive or conservative. Whether you are investment spending now, hoping it will pay out at a future date.
There are a few basic guidelines to help determine a budget. The simplest one is based on the past. If you have been doing a real good job in the past, then simply take last year’s figures and adjust them upward to reflect the increased cost of inflation or the increases in advertising rates. This is done to make sure you get the same promotion impact as you had last year. Another way is to estimate how much your most successful competitor is spending and then for you to match him dollar for dollar.
Still another method is to base it on a per cow or per unit base. Tell yourself that if these cows are worth keeping, they are worth $65 per cow per year to go toward merchandising their offspring and your program. And finally, a more sophisticated method is to base your budget on anticipated gross sales.
Generally, this should be somewhere between 3% and 10% of gross for an average breeder. If you expect to sell $50,000 worth of breeding stock, then you should plan to spend between $1500 and $5000 to advertise, promote, and merchandise them. Keep in mind that this is a guideline and some really aggressive breeder may spend up to 20%, while the very large herds because of economics of scale may get it done for a lower percentage.
Also, think about when you should spend this money. Always spend it well in advance of when your product is actually to be purchased. Consider spending it also on a fairly consistent basis.
To run an ad each year in August to announce your sale in September is hardly being serious about the event. And, just because you don’t have anything for sale right now or the market is depressed is hardly a reason not to present your program to potential long term customers. Some of them don’t make up their mind for 3 or 4 years to come see your cattle. But, when they do it may pay back all those ads that never seemed to draw a response.
The crucial factor here is that on Jan. 1 you put this money into your budget and plan to spend it. Start by putting 10% of it into a reserve for special opportunity and then divide the other 90% among your field day, show ring, magazines and newspapers that you feel will work best.
3. Where Do You Spend It?
With your budget firmly in hand, you will now start to feel that you “have a plan” and that you are in command. Where to spend it is not an easy choice, but again there are some basic principles that can help.
Your first task is to list the options and places you can spend this marketing money: field day, brochures, road signs, a judging contest at your farm, county fair, state fair, sale advertising, or general advertising, etc.
Your next step is to go back and re-look at the facts about your herd—who were the people that purchased your cattle the past five years? Where do they live? Where do you realistically think they will come from?
The best return on your investment is to “spend your money where your market is”. There is a great likelihood that if people within 100 miles have bought all of your cattle the past five years, they will constitute your market for this year as well. Pouring all your marketing dollars to reach and influence people within that 100 mile radius would be a sound strategy. To spend your money taking animals to an adjoining state fair 300 miles away may not be a good investment at this time if you are just getting started. It may be fun, and educational and it may be social, but it may not be a good use of a limited budget in a plan that is designed to show a profit. Or, it may give your ego a big boost to see your expensive ad in a national magazine, but it hardly gives your marketing plan a big boost.
A more expanded approach may make sense when you have reached and influenced all the people in the 100 mile radius and it’s time to develop an additional market. Now each dollar spent is stretched and has to work harder because you are attempting to change peoples’ minds about where they should buy their bulls and heifers. And changing peoples’ minds and habits is difficult to do and demands a major commitment in time and money on your part. You are asking customers to trust somebody who is a long way from home, to travel further and spend more time and effort.
New markets are not developed overnight, so don’t get discouraged early on if you don’t see results. It may require from 5 to 10 years or longer to develop these new markets.
Take care to evaluate the universal temptation to become “a nationally recognized” herd. It’s extremely difficult to do for the average breeder; however there are excellent national publications that can help you accomplish this. Remember, too, that just because you like to go to certain shows or read certain magazines does not mean your customers do. Find out where they go and what they read and then spend your money there.
In summary—find the customers you believe will buy your cattle—then concentrate on them with repeated efforts—again and again until it works. Resist a scatter plan that splits up your dollars into bits and pieces and attempts to cover everyone. To attempt to market to everyone is to market to no one.
4. What Do You Say?
If you hold a field day you should attempt to leave people with a specific impression about your operation. If you go to the expense of showing cattle at a state fair, then your conversation/display/handouts should all be geared to deliver that exact same impression. If you run some advertising then hopefully you’re once again trying to convey that same impression or fact or image about you and your cattle. All your promotion efforts need to work in concert.
Your problem now is to determine what you would like to have your farm stand for. Once again you need to go back to the facts you stated about your operation—“what you say” must be rooted fundamentally in your cattle operation and you. For long term success “what you say” must be an accurate refection of what you have. You can commit no greater error than to have people expect a certain amount of quality or performance and then be disappointed when they don’t deliver. You may never see them again as customers.
Therefore, in one short sentence, how would you describe your cattle operation? How would your fellow breeders describe it? How would your customers describe it? You know you have the right answer if you all use a similar set of words.
How many times have you seen an ad run that has the following: “Come see Engelbrecht’s Angus—we have popular bloodlines, performance cattle, big strong bulls, good milking cows, show heifers and friendly people”. They wasted some of their money running that ad.
Now consider this as a possible alternative: “Come see Engelbrect’s Angus—they are the only place within 100 miles where you can find performance tested bulls with 1200 lb. yearling weights”. That may not be perfect, but I think you get the idea. The first ad is a laundry list of things every purebred breeder probably has and the other breaks you away from the crowd and single mindedly tells people what it is you are trying to accomplish.
There are many things you can become known for: performance cattle, show cattle, price, reliable people, reliable pedigrees, central location, club calves, fancy facilities, exclusive source of certain bloodlines, line breeding, no-nonsense commercial bulls, volume of selection, a small select herd, cows that milk, bulls with frame, and the list goes on and on.
You may, in fact, excel in nearly all of the above traits—the problem, is that it is hard to convince your customers that you do. To be all things to all people is not to be believed. With a hundred breeders in your area all saying the same thing, it causes a blur unless you are able to set yourself apart with your communication.
What you say is far and away more important than where you said it or how much money you spent saying it.
5. Conclusion:
My emphasis on promotion in no way was designed to imply that you can use promotion to sell an inferior product. To the contrary, promoting an inferior product is the fastest way to go broke. But, once you have your production phase in relatively good shape, don’t simple wait for the buyers to drive in. It won’t happen. And if you develop an aggressive, common sense “marketing plan” you won’t be one of these buyers who goes back to corn and beans because he didn’t know how to market his purebred livestock.
(Modern photo, not part of original article.)