What They Didn't Teach You in Feedlot Marketing School

Vern Pierce, Ph.D., Department of Agricultural Economics, University of Missouri, Columbia

Marketing involves communicating what your business is about. It involves establishing a brand. Not too unlike the "brand" that is often placed on cattle communicating the owner of that animal, a company brand communicates the basic philosophy of the managers of a business.

You have a brand whether you purposefully thought it through or just let it happen. When someone asks another producer about the quality of your feedlot, the answer given is your brand. Marketing involves influencing what those producers say about you.

What is your brand? Is it written down? It is not just a slogan. It must be the way you (and everyone who works for you) does business. Your brand includes your fundamental business philosophy as well as the characteristics of the target customers that you will seek to draw to your feedlot. Your marketing plan is designed to communicate your brand to potential customers. Who will your customers be in five years?

You could rely on the old school philosophy, "I have been dealing with my customers for years. I know these producers, and their cattle and they will continue to come to my lot." There are a few small problems with this marketing philosophy, like every word.

Have you really been dealing with the actual cow/calf producer for years or have you been working with an order buyer or someone else acting in your behalf? In either case, these producers you have been "dealing with" for years will be making some fundamental changes in what they are looking for in a feedlot.

Marketing plans to attract their cattle to your feedlot must be relative. The first innovators in the cow-calf business began health and genetic programs to differentiate their cattle and were disappointed to find that the commodity marketplace could not differentiate those cattle through the system long enough to be able to pay those producers for their efforts. This has been a stumbling block for others to follow suit, and thus caused our progression to increase consumer satisfaction to stumble.

However, that system is changing to one based on relationships where cattle and their growers will be evaluated based on the actual quality of the final consumer product. Producers, as a result, will be looking for feedlots (partners) who are able to buy cattle based on quality and provide information back so that future decisions can be based on how cattle actually perform. They expect and will be paid for their efforts this time. The point is that the producers, their philosophies, and perhaps more critically, the marketing system they use will be substantially different in the not too distant future. This will require a different focus in your marketing plan to attract those "new producers" to your lot.

The beef system is changing from a detached, segmented marketplace where each player in the system viewed their job as done when the cattle left their place to a system where producers from the seedstock operator all the way through to the feedlot will be interested in what impact their decisions had on the final product.

They will be interested for many reasons. The most important of the reasons is money. However, to make this change a little more interesting, money will be allocated in this new system along with another important asset - information. As you know, the percentage of cattle that is sold on some type of quality grid is growing. Think ahead for a moment. As more of the cattle that you sell to packers are priced on a quality specification grid, will the way that you seek out cattle to come to your feedlot change? Certainly, you will begin to look for those producers who are changing their management practices to match the demands of this new information driven system.

Now, the question again. Do you know your producers and which ones are changing their decision making process? Those people will need a different message from your marketing plan than the more traditional commodity minded producers.

Branding your marketing plan first requires that you have one. Attracting customers with certain philosophies that match your brand as outlined in your marketing plan requires that you have identified them. This is transition time in the beef business. Consciously deciding the segment of the business that you want to be the best at and then developing and executing a plan to make that happen will be the difference between the steps on the ladder of success and those in front of your local courthouse. ©