PAEX Vietnam – On November 2011 a 3 day training workshop on marketing of agricultural products was attended by 24 core-Agricultural Extension trainers (ToT trainers) from 5 provinces in South Vietnam. After two and half days of theoretical and practical sessions, ToT trainers went to the Vinh Trach farmer club (Vinh Trach commune, Thoai Son district) of An Giang province to put their new gained knowledge to the test.
Vinh Trach club was set up in 1995. It specializes in rice varieties. Since 2005 already, the club has been involved with VVOB (MDAEP and PAEX). Mr. Tran Hoang Minh, head of the farmer club, provided an overview of the business activities of the club to the visiting ToT trainers. After 20-minute presentation of Mr. Minh, ToT trainers discussed possible marketing development strategies and they presented following proposal to the Vinh Trach farmer club:
Step 1: Analysis of business environment - The club gets good support from local authorities and donors (political forces). They can access loans, have an office and some basic equipment, and income from other services; but they have to cope with quite strong competitors in their market areas (economic forces). The club management board takes over many different tasks (socio-cultural forces). Club members are trained on production techniques of rice varieties (technological forces).
Step 2: Studies of customers - The club currently has some stable customers (farmers (10% of the total customers), agencies (20%), companies (50-60%), and co-operatives (10%). The potential customers are agencies outside the province (50%), companies (30%) and co-operatives and farmers (20%).
Step 3: Market Segmentation – It is recommended that the club provides a number of high quality varieties for both domestic market and Cambodian markets.
Step 4: Marketing plan - a slogan e.g. “Faith and quality – destination for farmers” and more attractive packaging is suggested.
Step 5: Communication media – involvement in exhibitions, fairs, for a and development of a club website are suggested.
Step 6: Marketing mix 4P (Product, Place, Price and Promotion) – A higher diversity of rice varieties is suggested. The selling price of the club should be 10% lower than that of competitors. The club should be linked to sales agents or should cooperate with agencies in other provinces. The club should have an attractive discounting policy for sales agents.
Step 7: Budgeting: 10% of benefits is spent for the marketing strategy.
Mr. Minh was happy to receive some interesting ideas from ToT trainers. He said that “The club provides types of varieties based on farmers’ needs. We are connected to some sales agents; however, it is not much and the club did not provide a discounting policy to sales agents. I appreciate the idea that we should focus on sales agents, because we get more profits from sales agents than from companies. Farmers are not stable customers, but they are core sources. We have models of rice varieties, advertises in some sectoral websites, develops leaflets, and has a trade name. We did not attend exhibitions or fairs as fees for joining exhibitions are quite high. The selling prices of rice varieties is around 10 to 20% cheaper than market prices….” Mr. Minh indicated that some of the ideas should be applied, and others will be further considered in Vinh Trach club.
While the ToT trainers went back with more practical marketing knowledge, Mr Vinh was already discussing these ideas with his colleagues.
