Economic and Marketing Information
FOR INDIANA   FARMERS
Prepared by the Agricultural Staff of Purdue University, Lafayette, Indiana
September  30,   1964
Advertising and Promotion
For Agricultural Marketing
Edward Dailey, Agricultural Economics
Using advertising and promotion to assist in selling
farm products is not new. In 1907 a California marketing cooperative, for example, spent $10,000 in Iowa to
promote oranges. Over the years promotion activities
by producer-promoter groups have shown much variation. Farm products were promoted vigorously during
the depression years and up to World War II. With the
disappearance of the wartime demands commodity promotion has expanded both in numbers of groups promoting and in size of budgets.
Latest USDA surveys show that over 1,200 commodity
groups are currently spending about 100 million dollars
per year for promotion and advertising.
Opinions Divided
The merit of using promotion to expand consumption
of food products has been widely debated. Proponents
of advertising for farm products can point to campaigns
where increases in consumption as a result of advertising and promotion are a matter of record. Other observers of agricultural product advertising will point
out that gains made in consumption of one product
through promotion will be offset by lower consumption
of a substitute product.
Despite divided opinions, the promotion of farm
products assumes a large and increasing interest to producer groups and to those engaged in marketing agricultural products.
Variation Exists in Promotion Opportunity
While promotion has long been used by some commodity groups, to others it is new and untried.
Many questions are being asked about organizing for
promotion, and about the costs, practices and effectiveness of promotion for various commodities and marketing situations. While a favorable cost/benefit relation
for promotion campaigns for some commodities is a
matter of record, for others the record is not quite so
clear.
Studies made of promotion effectiveness show that the
opportunity for effective use of advertising and promotion   varies  markedly   among   different  products.   Each
situation as it relates to advertising and promotion
must be studied separately. Advertising appears to work
wonders in some cases, yet can fail miserably in others.
The Promotability Audit Appraisal
The test (see page 2) is designed to serve both current
and potential agricultural product advertisers. For those
groups with existing promotional programs it may provide the basis for revising or strengthening the program. For those considering employing promotion to expand demand it provides a structure to consider the important factors in a systematic way.
This test or appraisal is based on accepted principles
of advertising, on experience of producer-promoter
groups and on studies of demand and market research.
It outlines considerations important to profitable promotion. How the questions are answered will give a
good indication of the effectiveness of a promotion program for a particular product or commodity group.
This appraisal calls for an honest evaluation by all
those interested in the outcome. A rating scale is used
to allow differences in judgment to be registered.
A high score indicates greater opportunity for an investment in promotion to give favorable results. The
audit can serve as a guide but the exact score at which
promotion should be undertaken cannot be pinpointed.
Audit Use May Help
Promotion can be an effective tool for some farm commodities and some marketing situations. However, as
might be indicated by the audit appraisal some situations are better adapted to the use of advertising and
promotion than are others.
With our high present and potential capacity to produce agricultural products promotion will continue to
occupy the interests of many producer groups. Even so,
the practice of producer-sponsored commodity promotion will in all likelihood, continue to be debated.
The chances for making good promotion decisions
can be increased by a consideration of the principles
and guidelines listed in the promotability audit appraisal.