Evaluating the Potential of Success for Value-Added Products

Extension
W040
Evaluating the
Potential of Success for
Value-Added Products
Complete these tools – get a broad
assessment of the potential of
value-added market success.
Project Partners
This project was funded in part under an agreement between the Center for Pro? table Agriculture and the Tennessee
Department of Agriculture. State funds were matched with federal funds under the Federal-State Market Improvement
Program of the Agricultural Marketing Service, U. S. Department of Agriculture.

---

Foreword
Within three years after market introduction, approximately 80 percent of all new products and businesses fail.
Therefore, it is important to evaluate potential for market success before excessive time, effort and ? nancial
investments are made to launch a product into the marketplace.
This publication contains two tools to assist farmers and agri-entrepreneurs in evaluating the potential of
market success for their value-added products. These tools do not, however, replace the need to complete
business and marketing plans. The ? rst tool, Assessment of Marketing, is designed to help appraise a
product, marketing plan and marketing conditions to determine the likelihood of achieving marketing success.
The second tool, Getting Value-Added Products into Grocery Stores, is designed to help assess the
potential for value-added agricultural products to be marketed in local grocery stores.
Each tool provides a series of statements about the product, marketing plans and marketing activities.
Participants are asked to indicate whether they agree, somewhat agree, somewhat disagree or disagree with
each statement. The responses can then be compared with preferred responses and scored. The value of the
tools to producers relies heavily on the accuracy of the answers provided to the questions.
The tools provide assessment information to farmers and agri-entrepreneurs in three ways.
1. Total Scores – Participants are directed to score their responses to each statement and calculate
a total score for each tool. The total score is compared to ranges of scores with related feedback
indicating the general level of market planning preparedness and potential for marketing success.
2. Preferred Responses – Preferred responses to each statement are given. By comparing their
response to the preferred response for each statement, farmers and agri-entrepreneurs are able to
identify strengths and weaknesses of their speci? c product, marketing plan and market situation.
3. Explanations for Preferred Responses – The preferred responses are explained based on
marketing fundamentals and survey results. The explanations are based on information found in
Extension publication PB1699, Marketing for the Value-Added Agricultural Enterprise, and
Extension publication PB1719, How to Get Value-Added Products into Local Grocery Stores. The
explanations provide an opportunity for respondents to learn methods to improve their potential for
market success.
These instruments were originally designed for use as online, interactive assessment tools. The interactive
version of the Assessment of Marketing is available online at http://cpa.utk.edu/Tools/Marketing.htm. The
interactive version of Getting Value-Added Products into Grocery Stores is available at http://cpa.utk.edu/
Tools/Grocery.htm. The interactive version will automatically score responses submitted by the participant.
This printed version was developed for use by farmers and agri-entrepreneurs in training sessions and
workshops and for distribution by county Extension agents to those without Internet access.
This project would not have been possible without contributions from the United States Department of
Agriculture Federal-State Marketing Improvement Program, the Tennessee Department of Agriculture Market
Development Division and University of Tennessee Extension. Special recognition is due to Anne Dalton, Rob
Holland and Lynne Scott for development of the publication, to Russ Bragg, Alice Rhea, Stanley Trout and
Wanda Russell for participation in the peer review and to Kim Stallings for cover design and layout.
Additional information related to this project, as well as other resources for value-added agriculture businesses,
are available from the Center for Pro? table Agriculture at http://cpa.utk.edu or by calling 931-486-2777.
Megan L. Bruch
Extension Specialist
Center for Pro? table Agriculture

---

Evaluating the Potential of Success
for Value-Added Products
This project was funded in part under an agreement
with the Tennessee Department of Agriculture
and the USDA Federal-State Market Improvement Program.
July 2004
Megan Bruch
Extension Specialist
Center for Pro? table Agriculture
The University of Tennessee
Rob Holland
Extension Specialist
Center for Pro? table Agriculture
The University of Tennessee
Anne Dalton
Extension Assistant
Center for Pro? table Agriculture
The University of Tennessee
Lynne Scott
IT Administrator
Department of Information Technology
The University of Tennessee
Table of Contents
Assessment Tool #1: Assessment of Marketing
Background...........................................................................................................1
Assessment Tool ...................................................................................................1
Scoring, Preferred Responses and Explanations..................................................5
Total Score Interpretation Key ...............................................................................9
Additional Resources ............................................................................................9
Assessment Tool #2: Getting Value-Added Products into Grocery Stores
Background.........................................................................................................10
Assessment Tool .................................................................................................10
Scoring, Preferred Responses and Explanations................................................12
Total Score Interpretation Key .............................................................................15
Additional Resources ..........................................................................................15

---

Assessment Tool #1:
Assessment of Marketing
Background
Marketing is an important part of your business planning and operations. It is dif? cult, if not
impossible, for your business to succeed if any of the details for marketing your product are
neglected. Regardless of the greatness of a product, unless consumers know about it, are convinced
of its greatness and can obtain the product, success will be limited.
This instrument assesses a product, the marketing plan and marketing conditions for achieving
optimal marketing success. The tool is designed for and targets you, farmers and agri-entrepreneurs,
who have a speci? c product identi? ed, have a complete marketing plan for the speci? c product and
want an assessment of the probability of this product succeeding in the market. The assessment will
not be as accurate if “just any” value-added product, rather than a speci? c product, is considered.
The result will indicate the likelihood of your product’s success in the market. No recommendations,
marketing plan or interpretations will result from the interaction. This assessment will provide you
with an indication of the degree of market success your speci? c product might have, and if your
marketing plan for the product is complete. Strengths and/or weaknesses in marketing awareness
and readiness should be gleaned from using the tool. Hopefully, you will obtain a broad perspective
of the dynamics of marketing based on current research.
Assessment Tool
The assessment tool consists of 45 statements. These statements are presented in six sections:
Section 1: Market Research and Analysis
Section 2: Marketing and Financial Objectives and Goals
Section 3: Marketing Strategies
Section 4: Marketing Tactics
Section 5: Marketing Budget
Section 6: Monitoring and Evaluating Market Response
The assessment tool statements are contained in Table 1.1. For each statement, read it as though it
was written for you and your speci? c product and marketing plan. In the statements, “my product”
refers to your product – the one you produce or plan to produce. “Competitive products” refer to
products that would be competing with or can be substituted for your product.
Read each statement and circle the response code that best describes your situation and product.
If you agree with the statement, circle A under Response Code. If you somewhat agree with the
statement, circle SA. If you somewhat disagree with the statement, circle SD, and if you disagree,
circle D. You must answer ALL the questions to receive an accurate score. Remember, the more
realistic you are in selecting your response, the more accurate the assessment. The ? nal column in
Table 1.1 will be used for scoring purposes after you respond to each statement.
1

---

Table 1.1: Assessment of Marketing Tool
Response Code
A=Agree
SA=Somewhat Agree
Statement
SD=Somewhat
Score
Disagree
D=Disagree
Section 1: Market Research and Analysis
1. My marketing plan includes market research and analysis.
A
SA
SD
D
2. The market analysis showed a strong market for the product.
A
SA
SD
D
3. Competitive products have been identi? ed.
A
SA
SD
D
4. The current market for competitive products was studied.
A
SA
SD
D
5. The information obtained about the competitive products’
A
SA
SD
D
markets was used in developing/re? ning my product.
6. Social trends, including but not limited to health, safety and
A
SA
SD
D
environmental issues, exist that could positively affect my
product’s sales.
7. The strengths and weaknesses of competitive products have
A
SA
SD
D
been identi? ed.
8. The strengths and weaknesses of competitive products were
A
SA
SD
D
addressed when determining marketing strategies for my
product.
9. Suitable market channels for my product have been
A
SA
SD
D
appropriately evaluated.
10. The market channels identi? ed as suitable can accommodate
A
SA
SD
D
the required level of sales.
11. A target audience for my product has been identi? ed.
A
SA
SD
D
12. Age, gender and family type were used to de? ne a target
A
SA
SD
D
audience for the product.
13. Information on personality traits, including but not limited to
A
SA
SD
D
attitudes and values, was used to de? ne a target audience
for the product.
14. The target audience’s activities and interests were identi? ed.
A
SA
SD
D
15. Information concerning the target audience’s activities and
A
SA
SD
D
interests was used to position my product.
16. My product meets needs of the target audience that are not
A
SA
SD
D
currently being met by the competitive products.
2

---

Response Code
A=Agree
SA=Somewhat Agree
Statement
SD=Somewhat
Score
Disagree
D=Disagree
Section 2: Marketing and Financial Objectives and Goals
17. The marketing plan includes marketing and ? nancial
A
SA
SD
D
objectives and goals.
18. An estimate of sales has been calculated for my product.
A
SA
SD
D
19. Speci? c, quanti? able sales goals for the product have been
A
SA
SD
D
established.
20. Sales goals for the product can be easily measured.
A
SA
SD
D
21. My product’s price is consistent with marketing and product
A
SA
SD
D
positioning strategies.
22. Variable costs were used in determining the price of my
A
SA
SD
D
product.
23. Fixed costs were used in determining the price of my product.
A
SA
SD
D
24. Estimated sales were considered in determining the
A
SA
SD
D
product’s price.
Section 3: Marketing Strategies
25. My marketing plan includes marketing strategies.
A
SA
SD
D
26. My product has been ? eld-tested.
A
SA
SD
D
27. Field test data were analyzed, and results were used in
A
SA
SD
D
formulating marketing strategies.
28. My product meets the consumer’s needs at a lower price
A
SA
SD
D
than its competitive products.
29. My product’s packaging is enticing and will sway the target
A
SA
SD
D
audience to purchase it.
30. Information on the package is easily communicated.
A
SA
SD
D
31. My product is packaged in container types and sizes that are
A
SA
SD
D
friendly to the target audience.
32. Packaging is such that my product can be easily placed on
A
SA
SD
D
shelves or other store displays.
33. A niche market exists that my product can tap.
A
SA
SD
D
34. National and regional demands for my product are
A
SA
SD
D
increasing.
3

---

Response Code
A=Agree
SA=Somewhat Agree
Statement
SD=Somewhat
Score
Disagree
D=Disagree
Section 4: Marketing Tactics
35. My marketing plan includes marketing tactics.
A
SA
SD
D
36. Promotional activities and tactics, used to entice customers,
A
SA
SD
D
have been planned for my product.
37. Speci? c plans for advertising my product, such as radio
A
SA
SD
D
spots, newspaper articles, billboards, etc., have been
developed.
38. Both promotions and advertising will be used to generate
A
SA
SD
D
sales.

39. A timeline for implementing promotions and advertising has
A
SA
SD
D
been determined.
Section 5: Marketing Budget
40. My marketing plan includes a marketing budget.
A
SA
SD
D
41. My marketing budget is 5 to 10 percent of the expected
A
SA
SD
D
annual sales.
Section 6: Monitoring and Evaluating Market Response
42. My marketing plan includes monitoring and evaluating
A
SA
SD
D
market response plans.
43. An instrument for evaluating marketing effectiveness has
A
SA
SD
D
been developed.
44. A timeline has been designated for the marketing evaluation.
A
SA
SD
D
45. My marketing plan includes a marketing plan checklist.
A
SA
SD
D
Total Score
4

---

Scoring, Preferred Responses and Explanations
When you have finished providing responses to each statement in the tool, you are prepared to
score and evaluate the results. First, write the number of points awarded for your response in the
Score column in the assessment tool, Table 1.1, according to the point system summarized below
in Table 1.2. That is, for every statement that you circled A for agree, write “4” in the Score column.
For every statement that you responded SA for somewhat agree, write “3” in the Score column and
so on.
Add the points for each of your selected responses to determine your total score. Refer to the Total
Score Interpretation Key on page 9 to ? nd out what your score indicates. Finally, check your
responses against the preferred responses given in Table 1.3, and read the explanations to the right
of each preferred response.
Table 1.2: Assessment of Marketing Point System
Response
Points
Agree (A)
4
Somewhat Agree (SA)
3
Somewhat Disagree (SD)
2
Disagree (D)
1
Table 1.3: Assessment of Marketing Preferred Responses and Explanations
Statement
PREFERRED RESPONSE--Explanation
Section 1: Market Research and Analysis
AGREE
— Market research and analysis is an essential component of a
1.
marketing plan. This section should include, among other facts, information on
the target audience, competitors and industry trends.
AGREE — The stronger the market or demands for the products, the greater
2.
chance for success. If a market analysis does not reveal a strong market for the
product, the product should be re-evaluated.
AGREE — When evaluating the market for a value-added product, it is
3.
important to identify competitive products so that market research can be done
and data obtained on these products.
AGREE — It is important to do a detailed study of the competitive products’
4.
market to gain information about the product’s consumers and the market
outlook.
5

---

Statement
PREFERRED RESPONSE--Explanation
AGREE — Information about the market of competitive products, be it positive
5.
or negative, should be used when developing a product. Knowing what has or

has not been successful is more productive than working in the unknown.
AGREE— If social trends exist that could positively affect the product’s sales,
6.
obviously the product would have greater opportunity for success.
AGREE— An important step in marketing is identifying the strengths and
7.
weaknesses of the competitive products.
AGREE— If the strengths and weaknesses of competitive products are
addressed when developing a product, the new product can include and build
8.
on the strengths of the competitive products and avoid the weaknesses of those
products.
AGREE — Determining the most effective and ef? cient channels is very
important. No matter how great a product is, if there is not an appropriate
9.
channel to get it to the consumer, a sale cannot be made.
AGREE — Regardless of how suitable a market channel, it must have the
10.
capacity to accommodate the level of sales needed for the business to succeed.
AGREE — By identifying consumers who are most likely to purchase a product,
11.
marketing resources can be used more effectively and ef? ciently.
AGREE— Using age, gender and family type helps segment potential
12.
consumers. This information makes it easier to focus market strategies on a

targeted audience.
AGREE— Information on personality traits can be used to more narrowly de? ne
13.
a target audience. Luxury products, premium brands and stylish services sell by

appealing to the consumer’s attitudes and values.
AGREE — Identifying the target audience’s lifestyle helps to further de? ne
14.
the audience. Consumers often buy products because of their activities and

interests.
AGREE — The activities and interests of the target audience should be
considered when positioning a product. For instance, if hiking is an identi? ed
15.
activity of the target audience, it would be wise to position the product as a
must-take item on hiking trips or an item for “trail survival.”
AGREE — If a product meets needs of consumers that are not currently being
16.
met, for example, the product is easier to store, stays fresh longer, seems more

user friendly, its opportunity for success is greater.
6

---

Section 2: Marketing and Financial Objectives and Goals

AGREE — Marketing and ? nancial objectives and goals are among the eight
17.
elements of a marketing plan.
AGREE — How does one know the amount to produce unless an estimate of
18.
sales is made? Estimating sales is a dif? cult task; however, not evaluating sales
can lead to a costly mistake.
AGREE — Speci? c, quanti? ed sales goals should be established. Goals provide
19.
direction and help with focusing marketing efforts.
AGREE — Sales goals should be formulated so that at any given time the goals
20.
can be measured.
AGREE — Price should be consistent with the market and product positioning
21.
strategies. For example, the price of a product needs to re? ect an upscale
quality if an upscale market is to be targeted.
AGREE — Because they vary or change as the level of production changes, it is
22.
more challenging to determine “variable costs.” However, they are important and
must be considered when determining the price of a product.
AGREE — Regardless of the level of sales, there are expenses that will always
23.
be incurred. These are “? xed costs” and should de? nitely be used in determining
the price of a product.
AGREE — Unless an estimated sales is used in ? guring the product price, it is
24.
not only impossible to determine if there will be a pro? t but a break-even price
cannot be established.
Section 3: Marketing Strategies
AGREE — Marketing strategies outline and describe the plan that will be used
25.
to reach the speci? c marketing and ? nancial objectives and goals. A marketing
plan should include a marketing strategies section.
AGREE — A ? eld test provides the opportunity to obtain information about the
26.
product and/or the marketing techniques before product marketing reaches the

full-blown stage.
AGREE — Since the results of analyzed data from a ? eld test are direct input
27.
from consumers, it should be used when formulating marketing strategies.
AGREE — If a product meets the needs of consumers at the same degree
28.
that the competitor’s product meets their needs but is priced lower than the

competitor’s, the new product has a greater opportunity for success.
AGREE — It is the product’s packaging that usually attracts the consumers’
29.
attention and initially makes the consumers aware of the product. In retail stores,

the packaging can be viewed as the silent salesman.
AGREE — To be effective, packaging information must be easily communicated,
30.
which is usually achieved by easy-to-read text and simple graphics.
7

---