Success requirements for companies competing in the California Dairy Feed Industry:
Product: No matter what segment of the business is being serviced, the products
must be of high quality and nutritional value. Quality is more apparent in
processed grains (rolled, crimped, steamed etc.), pelleted feed, and pre-mixes.
With such products consistency is absolutely necessary. If dealing with more value added products, it is important to have a unique benefit, something that
stands out in the customers mind, and be the first to bring it to the market.
Price: Price is a big factor in the commodities business where there is little
difference from company to company. The price must then be with in 1% from
that of the competition. However, in the value added products, value is more important, as long as the benefits outweigh the price. Pricing also depends on
how well differentiated one is from the competition.
Place: In this business it is absolutely necessary to deliver the product directly to
the farm and into the correct bins, bunkers or silos. Further more, in the
California market, the feed companies are expected to check inventory and advice the producers when to order more. Timely delivery is also essential. Never leave
a dairy producer without feed
Promotions: Volume discounts and early payment discounts are very important.
One must keep up with what the competition is doing. Free samples of new
products with the delivery of feed load and special deals on related products are
common.
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