Transcript EXECUTING GROWTH STRATEGIES: Achieving a Strong Brand Name Shermain Hardesty, Moderator

EXECUTING GROWTH STRATEGIES:
Achieving a Strong Brand Name
Shermain Hardesty, Moderator
University of California, Davis
IMPORTANCE OF BRANDING
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Differentiation strategy
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Competition for shelf space
Competition for consumer’s dollar
One brand often covers broad product line
CO-OP STRUCTURE CAN
IMPEDE BRAND-BUILDING
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User-benefit principle
User-financed principle
User-control principle
USER-BENEFIT PRINCIPLE
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Focus on member deliveries
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“Horizon problem”
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Limited product line
Seasonal product availability
Net margins distributed primarily in proportion to
patronage, not investment
Members whose earnings are deferred for brandbuilding get no direct return
Brand-building expenses can cause co-op’s
returns to be uncompetitive
USER-FINANCED PRINCIPLE
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Member retains are primary source of
equity for most co-ops
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Members often reluctant to contribute equity
or build reserves to invest in brand building
Cash-strapped members want to maximize
cash patronage payments by minimizing
retains
USER-CONTROL PRINCIPLE
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Ag marketing co-op board membership is
often very homogeneous
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Boards can lack marketing & finance
expertise to provide strategic oversight
Producer members often advocate for
marketing programs in their communities
CO-OPS CAN OVERCOME
THESE STRUCTURAL
CHALLENGES
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Dairy Farmers of America
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Don Schriver, Vice President
CROPP/Organic Valley
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Jerry McGeorge, Cooperative Coordinator