Farmers’ Market Prices Analysis
Despite the positive impact of technological and scientific development, the quality of food industry suffers from it considerably. The products that are offered to the consumers in the supermarkets and grocery stores are full of pesticides, chemicals, and genetically modified organisms that usually have the negative effect on people’s health. As a result, the farms that produce ecological products are becoming increasingly popular because they tend to grow agriculture products without chemicals, fertilizers, and pesticides. The farms, such as Urban Farmz, deliver fresh and ecological agriculture products directly to the final consumers and improve their strategies constantly.
The mission of Urban Farmz is to provide fresh, natural, and useful products to the increasing number of customers. Obviously, the company wants to pursue the vision of making the world a supplier of safe products which are not only attractive but also beneficial. In order to follow the mission and reach this vision, the company sets the long- and short-terms goals. Thus, its main objective is to increase the products’ range and their diversification. Moreover, Urban Farmz is willing to improve the sales and market shares. In addition, the company aims to develop the loyal relationships with the target audience.
In order to reach the settled goals, Urban Farmz has already developed a strategy that corresponds to the company’s resources and external environment conditions. One of the key success factors of such a small farm as Urban Farmz is its positioning strategy. The company has become the food production without fertilizers and pesticides. It offers healthy products compared to the rest of the companies in the food market. The target audience of Urban Farmz consists of people who lead a healthy lifestyle or live near the farm. The farm meets the needs of its customers, regardless of their age, sex, or social status. Moreover, with the online commerce development, the distribution strategy depends on the Internet and fast delivery which increase target market despite its geographic criteria. According to the globalization perspective, the company uses domestic market approach. It sells the products only in the USA. The company does not have an intention to expand to the international market. The specification of the product line is oriented only on the domestic market.
An important element of the marketing strategy is pricing. Due to the fact that Urban Farmz is a producer that delivers the products to the final customers without intermediaries, it is able to set the most effective financial strategy. The intermediary expenditures are avoided, and the company can control the whole process. Several options of price strategy choice are available: cost-based, demand-based, and competition-based strategies. However, the best variant is the combination of strategies. The cost-based one allows to set the minimum price that cannot be minimized. Though, it cannot be used separately because, in farming, it is hard to estimate exactly the expenses on the human labor. The demand-based strategy can help to vary the price level depending on the market fluctuations while the competition-based strategy allow to adopt the market price level that the competitors have already set.
However, there is one more option of pricing strategy that is the best one for the farmers. Due to the fact that the company is positioning itself as a producer of healthy, ecological, and organic products that are highly popular and apreciated, the value-based pricing strategy can be used for managing the turnover. This type of strategy is based on the customers’ perception of the company and brand. For example, having analyzed the situation of Urban Farmz, it is obvious that their clients are ready to pay more for quality and natural products. Thus, the prices can be set higher comparing to the cost-based offers or even slightly higher than the competition-based norms. This type of pricing will support the overall positioning strategy, increase the profit margin of the company and, consequently, Urban Farmz’s profitability.
If to evaluate the soap price, one will definitely agree that $15.95 is absolutely fair. First of all, this price meets the market conditions and, at the same time, supports the value-based pricing strategy ensuring large profit margin and notable success for the company. According to the customers’ perception, even if the company decides to have a higher price for the soap than its competitors have, it will create a positive attitude to the product. Indeed, it becomes valued as a high-quality product made of natural ingredients at home. Moreover, the price difference of $1.95 is not very high and the customer would rather choose natural soup than the one of the mechanized line production. However, in order to increase the market share of the Urban Farmz’s soap, the company might slightly decrease the price to $14.99. The profit margin is still high and the percentage of customers will definitely decrease. The competitors’ price of $14 will be in the same perception range of new Urban Farmz’s soap priced $14.99. Though, the customers will definitely prefer natural soap of Urban Farmz.
One more type of the pricing strategy can be applied by the company, namely the promotional pricing. Analyzing the Urban Farmz Company, it is evident that the promotional pricing strategy is the part of the value-based strategy. This strategy usually sets temporary the lower prices on the products in order to capture the market share and develop loyalty among the clients. It might be efficient for Urban Farmz to use this type of pricing strategy for new products when they are just introduced to the market. The promotional pricing strategy can stimulate the customers to try new product. However, this type of pricing strategy can be used only for a couple of months. After, the prices will be slightly decreased till they reach the value-based level.
Thus, the best pricing strategy for Urban Farmz is value-based. However, it is important to emphasize that before implementing any plan, a considerable market research has to be accomplished in order to determine the attitude and perception of the customers to the brand. Only after the experts examine the market, the prices can be settled effectively without the decrease of the demand level. In fact, the value-based pricing strategy has many advantages compared to the others. First of all, due to the increasing popularity of ecological and natural products, the products of Urban Farmz are in high demand. Thus, the prices can be higher. Moreover, the value-based pricing gives an opportunity to set more rewarding price than the production cost. Finally, it allows to make the profit margin bigger, thus contributing to the company’s profitability.
Taking everything into account, the farmers’ market price analysis proves that consumers are ready to pay more for the top quality products. It means that nowadays, the farming industry is a promising business. More and more people are willing to get high-quality natural food products. Being a representative of farming industry, Urban Farmz has managed to become extremely successful on the market. The best pricing strategy for this company is a value-based one. However, the elements of the promotional pricing strategy can be beneficial for company’s new products that have not been introduced to the target audience yet. Thus, the soap pricing strategy of $15.95 is competitive. Thus, the company should evaluate the market in order to set reasonable prices and capture the clients.

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