There is no better time than this to talk about market types. The looming uncertainties of crop production this year and the European Union requirements for organic produce is news received differently by many. For those who understand their markets, it is good news, for those who got the market wrong its bad news.
There are three major types of markets
NEW MARKET: a new market is created by coming up with a new type of product not in existence and creating a need for it
EXISTING MARKET: a market in existence
NICHE MARKET: usually found in an existing market, one creates a product specifically for a particular segment of the market.
Before you start farming, you would have considered a lot of things including where you will sell your produce. When thinking about the market most people would not look at it in depth, it is easy to say that tomatoes are in demand but what we fail to address is what the market type for the tomatoes is. Would you rather get into an existing market and compete fiercely with those in it which is not a bad thing or would you rather identify an unmet need and create a product for them e.g. organic foods.
When you plant your produce with the market in mind then you will not have to struggle at the end of your harvest o move your produce. A lot of energy and money is saved when you know who your produce is meant for and you deliver according to their expectations.
Advancements in agriculture have made it possible to grow almost any kind of crop in a farm using controlled environments like green houses. Given this opportunity, diversification should not be a problem. Competition should not stifle prices. Instead farmers should not be afraid to identify and create new markets, serve niches and have good business which is not the case.
A classic example would be the quail’s hype, the quail eggs have a market comprising of people who have ailments and special conditions that require the nutrients it offers. The few who understood this market had thrived in it and provided their customers with value. When the product was hyped, many reared the quails and flooded the market, the prices dropped because the market was smaller than the produce.
Another great example would be the milk ATMS that are quickly gaining popularity. They are found inside supermarkets and as stand-alone businesses. The need for them was created by quite a large market that needs fresh milk at an affordable price. The mil ATMs are owned by farmers and some by businessmen.
Market research is also important so as to know whether the market is large enough to make solving their problems worth.
Had the many farmers known about the requirements of the European countries for organic produce then this currently faced challenge would be out of the question. In any business failing in getting your market right is a big mistake and could be very costly.