E-Commerce Strategy Plan for Farm Markets

To view this page ensure that Adobe Flash Player version 9.0.124 or greater is installed.

Please login or register to make a comment!

...Description...... more. less.

roadside or near the farm. Product lines often are highly variable; some offerings are highly perishable while others are value-added. It is the latter category that holds possibility of being sold via Internet marketing methods. The material presented in this E-Commerce Strategy Plan for Farm Markets is designed to assist farm market operators in establishing new or improving existing Internet marketing ventures. E-commerce can be used to enhance or even create new direct farm marketing initiatives. This Strategy Plan helps determine whether e-commerce is right for your farm market; and if so, provides you with guidance to implement it. E-Commerce Strategy Plan for Farm Markets 4 Why Market Your Business on The Internet? In the past decade, the Internet has quickly integrated within the everyday lives of the general U.S. population so successfully that a company 9s web presence is often the first contact and impression it makes with the consumer (Klotz 3). The price of computers has dropped drastically, resulting in a new way of life and sharing of information. Now, virtually every consumer has easy access to the Internet at all times, whether it be on a standard desktop computer at home or work or even the cell phone that many do not leave home without. It is quickly becoming a serious issue for businesses that do not have a web presence. Local ads in phone books are becoming obsolete, and businesses that rely upon them are losing customers who simply do not realize they exist. The vast majority of consumers today do a web search for what they are looking for. If you do not have a web presence but your competitor does, you are losing potential customers. As farm direct marketing in the United States evolves, producers must find new ways to adapt to changing consumer preferences and demands 3 chief among them is the convenience of shopping from the comfort of home using the Internet (Klotz 13). By using the Internet as a tool, consumers are now able to learn everything about a product and the companies that sell it. They can compare prices, shipping costs and get feedback from previous customers all before even contacting you. Although most Internet customers currently purchase non-food products such as multimedia items and airline tickets, trends are showing an increasing demand for agriculture-based industries such as home, garden and food products (Klotz 15). If a consumer perceives a product to be authentic or higher quality and it is not available through local markets, the Internet provides a method of purchasing it directly from a reliable source (Klotz 16). E-Commerce Strategy Plan for Farm Markets 5 E-Commerce What is E-Commerce? E-commerce is the buying and selling of goods and services on the Internet. It generally has the following elements: " Product/service " Place " Marketing " Accepting orders " Accepting payment " Fulfilling orders " Accepting returns " Customer service (Brain 2). In order to conduct business, you must have the initial product or service to offer. If we want to sell crops, then we must first have the crops to sell. It makes no difference how you acquired the crops 3 whether you grew them yourself, got them directly from the farmer, or bought them from a distributor (Brain 5). Once you have the product or service, you must have a place from which you plan to sell it. This is not limited to a physical store or a roadside stand. Even a phone number can serve as a place. A customer can call your business 9s phone number, list the products they wish to purchase, and pay for them (Brain 6). Our websites and virtual shopping carts serve as another place where people can purchase our products. Marketing is essentially figuring out how to get people to come to your business. If no one knows you exist, it is going to be very difficult to sell your products. While some of the normal features of marketing (such as advertising) still apply to e-commerce, they have a unique spin on them. In its most effective form, Internet marketing is a complex process involving search engine optimization, pay-per-click advertisements, and other assorted methods to drive traffic to your site. Order acceptance is handled differently through e-commerce as well. While a storefront has a staff member manning the cash register and checkout line, this is not necessary in e- E-Commerce Strategy Plan for Farm Markets 6 commerce. Using the shopping cart interface, consumers populate their shopping cart with the items they wish to purchase from your store and check themselves out. When customers begin the checkout process, they are required to put in their credit card or payment information. By using this way to accept money or payment, the customer 9s credit card information is handled through your merchant account and payment gateway. Using these tools, the credit card is authorized and the transaction is allowed or denied. Once the funds have cleared, the money is deposited into your business account. After the items have been paid for, you must have a way to fulfill the order. At a normal store, the customers simply take their items and leave. With e-commerce, because they are not physically at a storefront, purchases need to be shipped. The final two elements are directly related 3 accepting returns and customer service. On an e-commerce site, there must be a return policy displayed for customers to read. This policy can be anywhere from call sales are final d to lifetime warranties. The decision is completely up to you; however, the stronger the return policy is, the stronger will be the customer 9s faith and opinion in customer service, your site, and your product. What Can E-Commerce Do for You? Many businesses are exploring e-commerce solutions because of the numerous advantages that come along with running an effective e-commerce site for their customers. Some of the stronger advantages include: " Lower transaction costs, " Larger purchases per transaction, " Customer interaction, " Ability to build complicated orders over a longer time period, " Ability to compare products and prices, " Ability to offer a larger catalog of products (Brain 15). By automating the process through which a customer orders a product or service from your company, one can easily lower the transaction costs through e-commerce. No employee is needed to help customers fill their order or pay their bill. E-Commerce Strategy Plan for Farm Markets 7 At the same time, a well-designed shopping cart interface allows customers to involve themselves in the shopping experience in a way no other tool is able. Many shopping carts now analyze the items the customer is viewing and purchasing, and make suggestions of other items they may enjoy based upon other customers 9 similar purchases. Amazon.com has made this into an art form, with each product offering other similar products of interest to each customer, while coupling it with cSuper Saver d shipping on orders over $25. Customers are now making larger purchases per transaction because of the constant suggestions that fit their needs and interest. When considering e-commerce for an agriculture-based business, it is easy to focus on just selling business-to-consumer (B2C) products online. However, many agriculture- based businesses would be best served by using e-commerce to strengthen existing customer relationships, while building new ones (Brain 17). With an e-commerce presence, other businesses may find it easier to patronize your business. Some strong business-to-business (B2B) e-commerce relationships could be created or enhanced by going online with the following: " Direct sales to restaurants " Direct sales to farm markets " Direct sales to schools, hospitals, and other institutions (Brain 18). Businesses such as these have the need to feed large quantities of people, but tend to purchase their products from large corporations outside their local area. If the opportunity exists to get the same products from their own community, why not explore it? Is E-Commerce Suitable for Your Agriculture Business? There are many benefits to e-commerce, but each business must carefully weigh the pros against the cons to ensure that it is the right economic decision for their farm. When considering the options associated with e-commerce, the food and agriculture industry presents some unique obstacles for a small farm. Shipping could prove to be very problematic. Fresh agricultural products cannot simply be stored in a warehouse until someone orders them online (Brain 2). With a set time period in which a product E-Commerce Strategy Plan for Farm Markets 8 can be considered cfresh, d it becomes nearly impossible to have a product ready, ordered, shipped, and used by the end consumer in the appropriate time frame. End users are not going to purchase tomatoes or sweet corn on the Internet when they can drive to their local store or Farm Market, handle the produce and purchase it, making B2C sales of fresh produce online unlikely. That is why many growers are beginning to think coutside the box. d While crops have a short shelf life, other products, such as jams, sauces, and dried herbs can be made and stored for longer periods of time. The main problems with shipping products to the end consumer are no longer such a difficult obstacle to overcome. E-Commerce Opportunities in Agriculture Food production and processing has become very centralized in America. Most of our food is grown and distributed by large-scale or corporate farms (Bellows 1). The small farm is finding it more and more difficult to compete, and because most consumers are shopping at large grocery store chains, the small farm is no longer the primary source of produce in its own backyard. As a result, consumers have become disconnected from the producers of the food they eat. Roadside stands and Farm Markets help with the B2C disconnect, but still are largely shut out of the convenience of the grocery store. E-Commerce will allow the Farm Market to reach the consumer in additional ways 3 for example, specialty & value-added products, corporate gifts, and delivery services. Farm Markets may provide consumers with a way to buy fresh, local produce, with a separate stop from the grocery store, but B2B commerce is largely ignored. Getting local produce into local institutions (such as grocery stores, schools, hospitals, restaurants, prisons, and other institutional dining facilities) must be addressed through local and regional efforts and streamlined with e-commerce. E-Commerce Strategy Plan for Farm Markets 9 When the Farm Market is able to sell products to local stores and institutions, it gains new and reliable markets, consumers gain access to what is often higher-quality, more healthful food, and more food dollars are invested in the local economy (Bellows 2). Table 1 below illustrates some of the E-Commerce Opportunities for Farm Markets. While this Strategy Plan focuses on recognizing and implementing the Farm Market 9s Output Opportunities, it should be noted that the Farm Market also could use e-commerce to procure inputs, as well as industry related information. Table 1. E-Commerce Opportunities for Farm Markets TYPE OPPORTUNITY B2B INPUTS Produce from Fresh Market Growers Selling Online OUPUTS Produce Direct to Schools Produce Direct to Restaurants Produce Direct to Organizations INFO Magazines & Newspapers Market Analysis Weather Reports B2C OUPUTS Pre - Orders for Consumers Specialty & Value Added Products Corporate Gifts Delivery Services Business to Business Produce Direct to Schools There are more than 2,000 Farm-to-School programs operational in 39 states with more than 8,700 individual schools involved. Contacts and existing programs for each of the states involved are available at http://www.farmtoschool.org . E-Commerce Strategy Plan for Farm Markets 10 Opportunities exist for Farm Markets delving into e-commerce to work within these programs or work directly with the organization to place product orders and delivery scheduling online. Produce Direct to Restaurants Some reports state that more than 50% of American meals are eaten away from home (Adams 24), indicative of a growing market for direct sales of produce. Many high- volume restaurants may not be interested in fresh produce, but the fine-dining niche may be an excellent market sector. Farm Markets that are able to consistently produce and deliver high-quality, high-value products from their farms have an opportunity to sell directly to local upscale restaurants that would embrace a fresher, tastier product. Selling to local chefs helps build a more stable regional food economy and more sustainable agriculture (Bachmann 1). By using e-commerce, the Farm Market can allow client restaurants to log in, place customized orders and schedule delivery dates, streamlining the ordering and fulfillment process. Produce Direct to Other Organizations Farm Markets poised to sell online to schools and restaurants also have opportunities to market to additional institutions such as grocery stores, other farm markets, hospitals, nursing homes, prisons, and other institutional dining facilities. The process would be the same as working with restaurants. Business to Consumer Advance Orders for Consumers Farm Markets can use e-commerce to accept advance orders. Advertise at the market the fact that you will soon be reserving products online. Hand out flyers with your website address on them. A few days prior to going to the market, post the inventory of products you will make available for preorders. Customers can come online and place their orders. Your customers will make their shopping quicker and easier while you build a strong relationship with each customer. Customers who can't arrive at the opening of the market E-Commerce Strategy Plan for Farm Markets 11 will also appreciate that they are not left getting what items have already been picked over. Specialty & Value Added Products Most commonly, specialty and value-added products are simply fruit or vegetables that are transformed into gourmet food items. Typical value-added products include jams, jellies, preserves, fruit sauces and spreads, pickles, preserved vegetables, tapenades, hot chili sauces, extra virgin appellation olive oils, herb-flavored olive oils and vinegars, and salsas. Value-added can also include other types of products: cut flowers, dried flower arrangements, wreaths and wall swatches, braided garlic, painted gourds, dried herbs, sachets, soaps made from home-grown herbs, and herbs grown and sold for medicinal properties (Ohmart 1). These specialty and value-added products are now being developed by small- to medium-scale farmers and sold directly to customers through farmers markets, individual and direct wholesale orders, and e-commerce websites. The common factor is that the Farm Markets develop, process, and distribute the end product themselves (Ohmart 2). E-commerce can significantly increase your target market and reach. As an example, Fruitcompany.com offers fruit baskets, gift towers, gift baskets, premium fruit, a monthly fruit club, and an exotica fruit club. Frog Hollow is another good example of a farm that is not only packaging fruit to sell online, but also creating specialty and value-added products, such as pastries, chutneys, and spreads ( http://www.froghollow.com ). Corporate Gifts Specialty gifts and value-added products make excellent corporate gifts. By marketing your website to corporations that routinely send out corporate gifts, you can create a recurring revenue stream with high-volume customers. Another example of a company marketing fruit baskets and fruit towers is GourmetGiftBaskets.com ( http://www.gourmetgiftbaskets.com/Fruit-Baskets.asp ). Delivery Services E-Commerce Strategy Plan for Farm Markets 12 Similar to accepting preorders for your customers, some Farm Markets may want to provide delivery services, especially if they are fairly close to urban areas where fresh produce and Farm Markets aren 9t readily available. E-commerce again will make the payment process easier. One example of a delivery service is Orlando Organics ( http://www.orlandoorganics.com ). It functions simply as a delivery service (and organic growers from around the country could also serve as one of its suppliers). E-Commerce Strategy Plan for Farm Markets 13 Writing the Internet Marketing Plan The Internet Marketing Plan is a vital tool to the overall success of your project. What is your budget? What market are you trying to reach? How will you go about connecting with that market? How do you determine if it was a success? A well-written and developed Internet Marketing Plan should incorporate at least the following topics: " Executive summary, " Internet marketing statistics, " Marketing communications strategies, " Internet marketing budget, " Internet marketing task force, " Internet marketing program implementation, " Summary (Spencer 1). The executive summary should give a broad overview and brief glimpse into your internet marketing plan. Make sure to include the reasoning behind the plan, the measurable goals, an overview of the products and/or services you wish to offer, the market 9s size and outlook, any potential competitors, and what you view as opportunities (Spencer 1.) The executive summary should serve as a starting point for a casual reader to understand what will be discussed in detail should they continue reading the rest of the report. The internet market statistics section should delve into the identified target markets for your product and/or service, including the size and makeup. What are the demographics for your target market? Are there any trends within your industry that could give insight to future market fluctuations? Can you estimate the number of users? What are their behaviors (Spencer 2)? Before starting the marketing communications strategies section, you must first clearly define your marketing goals and objectives for the site. When defining these objectives, make sure to be as detailed as possible, and always have them be measurable. A poor objective would be, cto create a successful site. d What makes your site successful? A better, more measurable objective would be cto increase the traffic to our site by 500 unique visitors per month d or to cincrease the Internet sales of our products by 25%. d With these objectives, you can accurately measure the performance of the site against the E-Commerce Strategy Plan for Farm Markets 14 end goal. If, during the review, you find that you are not on track for meeting these specific goals, you can seek to identify problem areas that may be keeping you from achieving them. Once you have your specific goals and objectives, you can begin to create specific strategies for reaching them. When creating the strategies, there is no need to recreate the wheel. Try searching for trade publications, market reports, competitor 9s websites, and case studies to see what has been done before (Spencer 2). Will these strategies work for your company? Can you implement any of these ideas into your marketing plan? By reviewing these other forms of information, you can really begin to brainstorm how to transform a combination of ideas into what could be a creative and successful strategy plan. Next is the Internet marketing budget. Here, you must create a budget by estimating the costs of maintaining the site. Will you be updating the site yourself, or outsourcing the updates to a different company? If updating the site yourself, you must take into consideration the costs of hardware (such as a computer), software (a File Transfer Protocol or FTP client to upload changes to the website) Internet connection, advertising, salaries of those updating the site, hosting costs, and any merchant account/payment gateway fees. You should also take into consideration the start-up costs of designing a website and developing any programming for it (such as a shopping cart). If you choose to outsource the work, you need to set a monthly budget for changes to the site. The Internet marketing task force will be radically different for an agriculture-based business versus general commerce. Generally, companies choose to pull employees from different departments, including marketing, sales, customer service, information services, and research and development (Spencer 3). These diverse departments are probably non- existent in a small agriculture-based business, and usually rely on a smaller workforce that must continue running the day-to-day activities associated with their business. E-Commerce Strategy Plan for Farm Markets 15 For this reason alone, it may be wise to consider outsourcing the Internet work. With a seasonal business it is more than likely that the website will require the vast majority of upkeep during the peak seasons. The Internet marketing program implementation section should include a timeline for project completion, along with important milestones and dates that should be met. How will you meet the milestones and deadlines that you have set? Finally, you should summarize the main points from each section, along with the recommendations you have for the marketing plan, as well as any reasoning behind them. Writing the Internet marketing plan is a time-consuming and often difficult process that many organizations frequently overlook. Although it is true that this is a daunting task, the benefits of having done it cannot be ignored. With this set plan, it will become clear exactly what your objectives are, and how and when you are going to reach them. E-Commerce Strategy Plan for Farm Markets 16 Target Markets What Is a Target Market? Target market is a term used in business that refers to a market segment to which a particular good or service is marketed. This can be defined by any number of factors, the most common being age, gender, geography, socio-economic group, or other demographic factors. Who do you want to market your product or service to? Defining Target Markets Table 2 illustrates your target market and primary competition in each of the areas of opportunity. Who your competitors are depends upon what type of e-commerce business you are creating. If you are marketing fresh produce to local organizations, your competitors may be other farms looking to do the same thing. The c30 mile market technique d was applied to this strategy 3 most customers of direct marketers are believed to live within 30 miles of the point of sale (Adam 4). If you are marketing specialty products to buyers worldwide, your competitors are also worldwide 3 and can best be found by searching the Internet. In either case, identify your competitors, document what they are doing well, what they are not doing well, and develop your strategy based on what you 9ve learned. Examine their websites. Are they taking advantage of these direct marketing opportunities at all? Are they using e-commerce to enhance them? Look for ways to improve upon what they are offering. Develop or modify your existing marketing plan to document your market research. E-Commerce Strategy Plan for Farm Markets 17 Table 2. Farm Markets E-Commerce Target Markets OPPORTUNITY TARGET MARKET COMPETITION B2B Produce direct to schools Schools within 30 - mile radius Farm Markets and fresh market growers within 30 - mile radius Produce direct to restaurants Restaurants within 30 - mile radius Farm Markets and fresh market growers within 30 - mile radius Produce direct to organizations Organizations within 30 - mile radius Farm Markets and fresh market growers within 30 - mile radius B2C Pre - orders for Customers Consumers within 30 - mi le radius Farm Markets within 30 - mile radius Specialty & value added products National Best performing websites that compete in your niche in regards to site design and site search engine performance. Corporate gifts National Best performing websites t hat compete in your niche in regards to site design and site search engine performance. Delivery services Consumers within 30 - mile radius Farm Markets within 30 - mile radius. Detailed market research and analysis are imperative before you promote and sell your products online. You will reduce business risk by collecting valuable information, identify problems in the market, and perhaps even discover other opportunities for profit. You will discover what you like and don 9t like in a website with regard to design, layout, ease of navigation, and ease of purchase procedure. Knowing the size and makeup of your target market, its geographic location, and demographic and behavioral characteristics, makes it easier to create the appropriate marketing strategy and avoid wasting time and money marketing to the wrong people (Adam 4). Identifying Your Target Market Needs, Wants, and Demands E-Commerce Strategy Plan for Farm Markets 18 One of the toughest problems facing companies is identifying their target market needs, wants, and demands. Farms must measure not only how many people want the product or service they are offering, but also how many of those people are actually willing and able to purchase it (Yuan 1). To start identifying the market needs, wants, and demands, one must first understand the fundamental differences and relationships among them. Needs meet the basic human requirements for survival. People need food, air, water, clothing, and shelter. These needs become wants when they are focused on specific items that can satisfy the need. These wants are shaped directly by the surrounding society. For example: to satisfy the need for food, a family in America may want a hamburger, while a family in China may want fish and rice. Both satisfy the essential need, but due to what is popular and available in their individual societies, the want is different. Demands are wants for specific products backed by an ability to pay. Many people may want an expensive BMW, but very few can actually afford to purchase one (Yuan 2). Understanding customer needs and wants is not always simple. Some customers have needs of which they are not fully conscious, or they cannot articulate these needs, or they use words that require some interpretation. Consider the customer who says he wants an "inexpensive car." The marketer must probe further. We can distinguish among five types of needs: " Stated needs - the customer wants an inexpensive car. " Real needs - the customer wants a car whose operating cost, not its initial price, is low. " Unstated needs - the customer expects good service from the dealer. " Delight needs - the customer would like the dealer to include an onboard navigation system or other perks. " Secret needs - the customer wants to be seen by friends as a savvy consumer (Yuan 3). E-Commerce Strategy Plan for Farm Markets 19 Positioning Your Product or Service Competitive Advantage Competitive advantage is gained by exploiting the unique blend of activities, assets, attributes, market conditions, and relationships that differentiates an organization from its competitors . This can be gained either by lowering your prices or by offering greater benefits that justify a higher price. There are four types of strategies that businesses can adopt in order to gain a competitive advantage over their competitors: " Differentiation, " Cost leadership, " Differentiation focus, " Cost focus (Strategy 1). The differentiation strategy involves selecting criteria used by buyers within the market and positioning the business solely on meeting those specific criteria. Generally, this strategy is used to set a higher price point for a product, because it will reflect the higher costs and value-added features passed on to the customer. The higher price point of the BMW vehicles is an example of differentiation (Strategy 2). The objective in the cost leadership strategy is to become the lowest-cost producer in a certain industry. If the business utilizing the cost leadership strategy can achieve a sales price that reaches the average of its competitors, then theoretically this business will have the best profits. This strategy is best used by large-scale companies that are able to produce a standard set of products with little in the way of options or add-ons. This standard product can then be produced on a large scale. Dell Computers is an example of a company that has flourished using this method (Strategy 2). Both the differentiation and cost leadership strategies can be narrowed down such that a company attempts to achieve to be the best in one particular segment or a group of segments. This is a variation called focus. E-Commerce Strategy Plan for Farm Markets 20 Identifying Competitors Who your competitors are depends upon what type of e-commerce business you are creating. If you are marketing fresh produce to local organizations, your competitors may be other farms looking to do the same thing. If you are marketing specialty products to buyers worldwide, your competitors are also worldwide 3 and can best be found by searching the Internet. Identify your competitors, document what they are doing well, what they are not doing well, and develop your strategy based on what you 9ve learned. Some important questions to ask when reviewing your competition: " Who are my competitors? " What strategies are my competitors using? " How are my competitors likely to respond to changes in the market? A SWOT analysis of both your company and the competition could prove very beneficial. Identifying the Strengths, Weaknesses, Opportunities, and Threats that are associated with your company and the competition allows you to address any potential problem areas that may result in losing a customer to your competitors. What Differentiates You From the Competition? Take a long hard look at what sets you apart from the competition. Your online presence should make clear what your unique selling proposition is. What makes you different? It is relatively easy for a direct marketer to promote a product as farm-fresh and different from the one sold at the large grocery stores. Other ways to differentiate your product are by procuring it earlier in the season, marketing it as low-spray or organic or naturally raised, and by adding value to it as previously described. (Adam 6). If marketing to local schools and institutions, you need to identify why they should do business with you, and how your e-commerce presence can make their transactions smoother and easier. E-Commerce Strategy Plan for Farm Markets 21 Establishing Your E-Commerce Presence Site Planning There are three major types of websites: " Website to transact sales " Website to distribute information " Website to transact sales and distribute information (Holcombe 7). Choosing the type of website that is right for you and your business is a decision that must be carefully made, and it must fit with your overall marketing plan, including the budget. A website to transact sales will be more expensive than one with a purpose of simply distributing information. When developing an e-commerce site, it is important to keep the following in mind during the planning stage: " Suppliers " Customer relations " Back-end administration (Brain 28). The suppliers and customer relations work just as they would in a regular business, however, the back-end administration can be a complex system depending upon your e- commerce design. Will customers be able to sign up for accounts in order to use and return to your shopping cart? How will you track what each customer is purchasing? What will you be using as a fulfillment center in order to ensure that all purchased items are being shipped to the correct customers in a timely fashion? When designing your shopping cart, it is important to understand what you want to be able to do with it. If the feature is not available in the programming at the start, it can be very timely and costly to add later. In addition to making sure that the shopping cart is working properly, you also want to make the design and navigational structure easy to follow and use. Nothing will frustrate customers faster than not being able to find what they are looking for on your site quickly and efficiently, and once a customer is frustrated, it is very easy for them to move on to a competitor 9s site to use their services instead. E-Commerce Strategy Plan for Farm Markets 22 When designing the navigation structure, it helps to create an outline of all of the pages you would like to include on your site. A good rule of thumb is that you should be able to get to any section of your site within three clicks of the home page. Defining the Website 9s Purpose The most critical step in the design of a website is to define its purpose. Identify your target markets and online objectives and map out a design that will address the needs of your target markets and meet your objectives. Common objectives may be: " Advertising products & service, " Selling products & services, " Customer service & support, " Product and farm information, " Creating brand awareness. Upon establishing site objectives, determine content that is relevant to meeting those objectives and the navigational structure that best presents the content in a clear, concise, and logical fashion. Search engine optimization should also begin in this phase, as the content is prepared. Keywords and key phrases should be derived from the first draft of site content, any printed promotional materials, from reviewing the websites of the competition, and by assessing website traffic logs. Graphic Design and Website Development The objectives and navigational structure are then folded into a "look and feel" that should highlight the most important areas visually as well as capture the spirit ofyou 9re your business. The site should not only look good - it should be tailored to channel Internet users to the areas of your site that will fulfill your objectives. A "mockup," or a graphical representation of the main template, should be created before forging ahead to ensure that your site objectives will be met by the design. Once a design is approved, the "mockup" image is typically split into smaller graphic elements, with each individual element optimized for appropriate size and download E-Commerce Strategy Plan for Farm Markets 23 speeds. Template pages are created from the HTML output. When the templates are created, page elements such as META tags, ALT tags, descriptive titles, etc., will be folded in that will optimize the pages for search engines. Consistency with fonts, font sizes, graphics, tables, and site architectural layout will ensure a professional look and feel. Pages are created from templates, and are published, replacing the mockup, and are available for review and comment as they progress. When designing the site, there are certain elements that you should take into consideration before starting the design process: " Making the site search engine friendly, " Designed to encourage repeat traffic, " Designed to encourage customer loyalty, " Designed to incorporate cstickiness. d When designing the site to be search-engine friendly, it is important to use the page elements such as META and ALT tags where necessary. Many search engines, such as Yahoo and Ask Jeeves, use these as reference points for natural search results. The Google Search Engine, however, pays particular attention to the actual content on the pages. Flash-based sites with many moving images will not perform as well as a site with well-written and defined content on the home page when using Google. A well-designed and developed website includes design elements that help build the natural traffic results. E-Commerce Applications When deciding on developing an option for taking payments via a shopping cart interface, there are three main choices: " Storefronts, " Off-the-shelf shopping carts, " Custom shopping carts (Holcombe 16). No matter what you choose, you want the end result to be an attractive, professional e- commerce solution that is user friendly. A storefront is the least expensive of the three types of shopping carts. These template shopping carts are usually acquired through Yahoo Stores or another such provider, and E-Commerce Strategy Plan for Farm Markets 24 allow businesses to jump into the e-commerce arena with ease and few start-up costs (Holcombe 16). The downside is that this option offers very little in the way of variety, and is difficult to customize to fit your needs. Off-the-shelf shopping carts (such as X-Cart or Ultra Cart) offer more in the way of variety and options, but the price increases. You can customize nearly any setting in these, and make it fit the general look and design of your website with relative ease (Holcombe 17) Building your own custom shopping cart is by far the most expensive option, as you will need to hire professional programmers. The flexibility this option provides, however, is greatly superior to any other option. If you have a need for a feature not offered by the other options, it may be worth the extra cost to get exactly what you want (Holcombe). Payment Gateways & Merchant Accounts When handling a transaction online, there is a basic financial process that most shopping carts follow: " Customer finds your website via search engines, pay-per-click advertising, or direct traffic. " Customer finds the item(s) of interest and decides to purchase the item by adding it to his or her shopping cart. " Customer proceeds to the ccheckout d area and submits their personal and financial details (such as shipping/billing address and credit card information). " The details submitted by the customer are then sent to the payment gateway service to validate or reject the financial transaction. " If the transaction is validated, the customer 9s credit card is charged for the agreed upon amount, and it is deposited into the company 9s merchant account. A payment gateway is a service that acts as an intermediary between the merchant 9s shopping cart and the financial networks associated with the transaction being conducted (Payment Gateways 2). E-Commerce Strategy Plan for Farm Markets 25 When choosing a merchant account and payment gateway provider, there are many items to take into consideration, as this is a vital element in the success or ultimate failure of your e-commerce venture. First, begin by making sure the gateway you are selecting is compatible with your shopping cart. Whether you have had your shopping cart custom built or you have modified an off-the-shelf package, there will be certain payment gateways that are compatible with the programming, and some that are not. Ask for a list of compatible payment gateways and begin by contacting those companies. If you already have purchased a gateway, and it is not on the compatible list, ask the programmers why their shopping cart does not support it. Often, programmers will be happy to support another payment gateway service if there is a demand for it; however, this can prove to be a lengthy process, and often doesn 9t happen until they are ready to go live with the latest version of their product (Payment Gateways 3). Second, make sure that your gateway offers the Address Verification System (AVS) Protection. This decreases the chances of accepting fraudulent transactions by verifying the purchaser 9s billing address with the address associated with the card itself (Payment Gateways 3). If the addresses do not match, the transaction is rejected. Most merchant banks offer a reduction in the fees they charge your account if you show them your payment gateway selection is equipped with the AVS Protection, as it reduces the chances of a chargeback. When selecting payment gateways and merchant accounts, it is important to remember to get information and quotes from multiple companies. Although it may be easiest to go to your own bank to get a merchant account, chances are you can find another source that is just as reliable, but charges less in fees against your account. When selecting the merchant account provider, make sure to have the company fully explain each charge that could be assessed against you. If you do not understand what a E-Commerce Strategy Plan for Farm Markets 26 particular fee or rate is, or why it could be charged to your account, make sure to ask for clarification. Some of the more common fees and rates from merchant account providers are: " Statement fee 3 a basic charge each month for issuing a statement for the transactions occurring that month; " Application fee 3 a charge to process the initial application for a merchant account; " Setup fee 3 any charges or fees associated for creating a merchant account; " Discount Rate " Mid-qualified and nonqualified rate " Transaction fee " Monthly minimum 3 this is the minimum amount that will you will be charged each month, even if you have not sold any products (Payment Gateways 5). If you are just starting up your e-commerce business or your products are at a relatively low price point, you may want to consider a third-party credit card processor, such as PayPal or 2Checkout. The individual transaction rates tend to be higher, but they do not charge monthly fees, chargeback fees, or some other common costs. This can prove to be a nice way to start your e-commerce business while you take the time necessary to properly select a merchant account and payment gateway provider. However, when selecting the third-party credit card processor, the process of purchasing an item from your shopping cart will actually take the customer away from your site. When finishing the checkout process, the cart will redirect the customer to the third-party credit card processor 9s website to validate the transaction and charge the customer 9s credit card. This may create a less professional image of your site and shopping cart. Hosting and Security Once you have designed and developed your site, you need a place for it to live 3 the hosting company. Hosting companies sell server space for your site to be placed on so that people searching on the Internet will be able to bring up your site. There are countless hosting companies, with a very wide cost range. You should pick a hosting company based upon the amount of downtime it has and the customer service it E-Commerce Strategy Plan for Farm Markets 27 provides. Nothing is more frustrating than your site going down and not being able to talk to a real person in order to get help. The hosting company will also be able to help you with the secure server (or SSL) Certificate. Data sent via an SSL connection is protected by encryption, a mechanism that prevents eavesdropping and tampering with any transmitted data. SSL provides businesses and consumers with the confidence that private data sent to a website, such as credit card numbers, are kept confidential. Web server certificates, as they are also known, are required to initialize an SSL session (Rapid SSL 1). Customers know when they have an SSL session with a website when their browser displays the little gold padlock and the address bar begins with a chttps d rather than chttp d (Rapid SSL 2). E-Commerce Strategy Plan for Farm Markets 28 Monitoring Performance Monitoring the performance of your website is a vital aspect in the overall success of your e-commerce business. How many unique visitors are coming to your site? Is the traffic consistently increasing? Are sales improving? There are many ways to track the performance of your site. Many statistical packages, such as the free Google Analytics, are available that will allow you to track amazing amounts of information on your site and those who are using it. Some of the more important items to closely examine are: " Unique visitors, " Traffic sources, " Keywords, " Page views. When monitoring the traffic to your site, you will see hits and unique visitors. While many companies choose to broadcast the many hits their site receives, this is not an accurate statistic to use when attempting to monitor the overall performance of your site. An individual hit occurs every time a user visits a page on your site. If that person visits your site and looks at five pages on the site, that is considered five hits, even though it was only one unique visitor. If that person visits the site more than once, his hits continue to add up for viewing the same pages. Many companies use their website as the default homepage on their employees 9 computers. If they have 500 employees, and each one is accessing information from the website, they immediately have accumulated potentially thousands of hits each day, just from their own employees. It is also important to monitor where your traffic comes from. With a statistical package, you can see the breakdown of traffic sources, including direct traffic (when someone types in your specific URL), referring sites (using affiliate reciprocal links to your site), and search engine traffic. E-Commerce Strategy Plan for Farm Markets 29 Within the search engine traffic results, you will be able to view a breakdown of the keywords used to search and find your site, as well as how many people used that specific combination of terms. This becomes a valuable tool, as it will allow you to see what people are searching for to get to your site, and you can modify your content and metatags accordingly to capture more of that particular traffic. Finally, there are page views. Chances are the most popular page is your homepage, but what pages do people visit from there? Where are the most popular exit pages? By monitoring this, you can review your content by assessing what people want when they find you. If you have a popular exit page, review your content on that page to try to figure out why people may be leaving your site once viewing that page. Is there something on it that may put off potential customers? Can it be fixed? While consistently increasing traffic may be a goal, it may not be a sensible one. Most agriculture-based businesses are seasonal by nature, and therefore so will be the traffic to the website. Instead of setting a goal of increasing traffic each month, make sure that the traffic from Fall, 2008 is greater than it was in Fall, 2007. This will help account for the seasonal nature of your business, and allow you to set more traceable and realistic goals. E-Commerce Strategy Plan for Farm Markets 30 Summary and SWOT Analysis With increasing fuel prices and more competitive marketplaces, Farm Markets should be aware of, and pursuing, an online presence to help lower costs while increasing sales to potential customers throughout the country. Although the initial upfront costs of designing and developing an e-commerce website can be relatively high and off-putting, the benefits can outweigh the initial cost and, with low recurring costs, an e-commerce presence often becomes the most profitable area of a business. It is important to consider a Strengths, Weaknesses, Opportunities, and Threats (SWOT) Analysis of your business. Strengths: " E-commerce sites and sales are at an all-time high. " Maintenance costs are relatively low after setup. " Consumers tend to use the Internet as their first attempt at contacting companies. " An e-commerce presence allows your business to have a constant way for customers to contact you 3 24 hours a day, 7 days a week. Weaknesses: " A learning curve will be present if it is your first time venturing into an e- commerce presence. " Many products and services simply will not sell online, when the customer can get the same item from the market down the street. Regular produce will be tough to sell. More creative product lines may be needed. " Start-up costs can be off-putting. Opportunities: E-Commerce Strategy Plan for Farm Markets 31 " An e-commerce presence will enable your business to reach a nationwide (and sometimes worldwide) marketplace, allowing you to gain customers that would have normally been unobtainable. " An online presence will allow people in the local area to find you 3 they may not have even realized you exist! Threats: " Customers are able to shop around and compare prices and companies from the comfort of their home. " Online competition is particularly tough. You no longer are competing with just other businesses in the area, but anyone with an e-commerce presence who is selling a similar product. With a well-developed plan and understanding of how to market unique products, an online presence can prove to be a cost-effective way to improve visibility of your actual storefront and allow customers to order your products at their convenience. E-Commerce Strategy Plan for Farm Markets 32 Works Cited Adam, Katherine (1999). Direct Marketing . ATTRA Publication #IP113 . Retrieved March 3, 2008, from the National Sustainable Agriculture Information Service Website: http://attra.ncat.org/attra-pub/directmkt.html . Adam, Katherine L. (2004). Entertainment Farming and Agri-Tourism: Business Management Guide . Retrieved February 19, 2008, from the National Sustainable Agriculture Information Service Website: http://www.attra.ncat.org . Bachmann, Janet (2004). Bringing Local Food to Local Institutions . ATTRA Publication #IP255 . Retrieved March 3, 2008, from the National Sustainable Agriculture Information Service Website: http://attra.ncat.org/attra- pub/sellingtorestaurants.html . Bellows, Barbara (2003). Bringing Local Food to Local Institutions . ATTRA Publication #IP242 . Retrieved March 3, 2008, from the National Sustainable Agriculture Information Service Website: http://attra.ncat.org/attra-pub/farmtoschool.html . Brain, Marshall (2006) How E-Commerce Works . Retrieved March 2, 2008, from the How Stuff Works Website: http://communication.howstuffworks.com/ecommerce.htm . Chambers, W., Hopkins, J., Nelson, K., Perry, J., Pryor, S., Stenberg, P., Worth, T. (2001). E-Commerce in United States Agriculture . Retreived February 22, 2008, from the Farm Foundation Website: http://farmfoundation.org/ . Farm Computer Usage and Ownership 3 August 2007 . Retrieved February 22, 2008, from the United States Department of Agriculture Website: http://www.usda.gov/wps/portal/usdahome . Holcombe, Colin (2001). An Advanced Guide to E-Commerce, 11 th Edition . Litlangs Publishing. Klotz, Jennifer-Claire (2002). How To Direct-Market Farm Product on the Internet . Retrieved February 22, 2008, from the United States Department of Agriculture Website: http://www.usda.gov/wps/portal/usdahome . National Farm to School: Retrieved February 22, 2008 from National Farm to School Website: http://www.farmtoschool.org/ . Ohmart, Jeri (2003). Direct Marketing with Value-added products. Retrieved March 3, 2008, from the UC Sustainable Agriculture Research and Education ProgramWebsite: http://www.sarep.ucdavis.edu/CDPP/valueadded.htm. E-Commerce Strategy Plan for Farm Markets 33 Orbinger Lee Ann. How Creating an Online Business Works . Retrieved March 3, 2008, from the How Stuff Works Website: http://money.howstuffworks.com/online-biz- do-it.htm . Payment Gateways, Internet Merchant Accounts and 3 Party Credit Card Processors. Retrieved June 16, 2008 from the Taming The Beast Website: http://www.tamingthebeast.net/articles2/back-end-ecommerce.htm . Spence, Stephan (2004). The Internet Marketing Plan. Retrieved June 26, 2008 from the Net Concepts Website: http://www.netconcepts.com/internet-marketing-plan/ . SSL FAQ (2004). Retrieved August 2, 2008 from the Rapid SSL Website: http://www.rapidssl.com/ssl-certificate-support/ssl-faq.htm. Strategy: Competitive Advantage. Retrieved June 26, 2008 from the Tutor2U Website: http://tutor2u.net/business/strategy/competitive_advantage.htm . Wilson, Paul. An Overview of Developments and Prospects for E-Commerce in the Agricultural Sector. Retrieved February 19, 2008, from the European Commission Agriculture Directorate-General Website: http://ec.europa.eu/agriculture/index_en.htm . Yuan, Brian (Yuan Qingjiang). Core Concepts of Marketing Needs, Wants, and Demands (February, 2008). Retrieved March 22, 2008 from the Sun Website. E-Commerce Strategy Plan for Farm Markets 34 Appendix E-Commerce Website Site Worksheet E - Commerce Sales Channel A product A place to sell the product A w ay to get people to come to your Website A way to accept orders A way to accept money A fulfillment facility A way to accept returns A way to handle warranty claims A way to provide customer service Integrate other business functions or pract ices into the e - commerce offering. Fundamentals 3 Objectives, Target Markets, Products & Services Objectives of the Organization Needs, Wants and Expectations of Target Markets Products and Services that are being offered Common Objectives Status Advertising products & services Selling products & services Providing customer service and product support Providing product or corporate information Creating and establishing corporate identity or brand awareness E-Commerce Strategy Plan for Farm Markets 35 Considerations Element Statu s Search engine friendly Keywords in Keyword and Description META Tags, page text, and domain names, page titles, ALT tags Different META tags on each page Keyword density and location Header tags Search localization Hypertext links, anchor s File names Referring websites Flash and text in graphics Website accessibility issues Encourage repeat traffic Contests & competitions Cartoons, jokes, trivia, games Advice columns, tip of the day What 9s New page Bookmark t his page Calendar of events Blogs Online community Coupons, discounts, giveaways Specials & promotions Employment opportunities Useful links Viral marketing elements Word of mouth (Tell a friend, Send this to a friend) P ass it on (Customers forwarding e - mails to a friend) E-Commerce Strategy Plan for Farm Markets 36 Leverage sales force Affiliate or associate programs Permission marketing Newsletters Contests Notification of new giveaways Encourage customer loyalty Members - only area E - Club with offers/discounts/freebies Incorporate cstickiness d Advice columns Description of products Discussion forums News sections Weekly contests Target Market Needs Wants Expectations WOW

less