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Hollabaugh Bros. - A Market Research Case Study

Market research can be difficult to begin when you don't really know how to start the process. In this example, we have performed some research for Hollabaugh Bros., Inc., which is located in Adams Co. PA, just outside of Gettysburg. This research is based on the business's location and type of operation, but do note that we performed this research solely as an example of what you can find for your own business. Note that we used Google throughout, but do not feel like you must limit yourself to any single search engine.

Industry Analysis

We gathered fruit industry data from several different web sources. First, we searched for “ag marketing.” This led us to The Agricultural Marketing Resource Center's website (http://www.agmrc.org). With a couple clicks, we found that the total farm value of production for fruits and tree nuts was $11.9 billion and annual per capita consumption was 297.7 pounds. Furthermore, this industry makes up 13 percent of the total of U.S. crop production. The website did not indicate the year represented by the data.

We wanted to find more about Pennsylvania, so we searched for “ag statistics.” We quickly found the National Agricultural Statistics Service webpage (http://www.nass.usda.gov). The 2002 Census of Agriculture indicated that the fruit, tree nuts, and berries industry was over $109 million in Pennsylvania in 2002. Adams County ranked first in the state with over $34 million.

To determine how the fruit industry has changed, we located the Produce Marketing Association's website (http://www.pma.com). We discovered that retail produce sales have increased by nearly $24 billion between 1997 and 2005 and that, as a percentage of retail food sales, produce sales have increased from 9.5 percent to 11.7 percent between 1996 and 2004. These trends are expected to continue as consumers spend more each year on fresh produce. There is evidence that the industry is growing, particularly as consumption of fresh produce increases. Consumers are increasingly willing to pay more for food that they consider to be safe, of high quality, and locally grown.

Market Analysis

We first wanted to determine the demographics of Adams County, so we searched for "demographic information" and were directed to the US Census website (http://www.census.gov). Within a few clicks we had learned a lot about the county according to the 2000 census.

  • Population - 98,322
  • Persons 65 years old or over - 13.9%
  • Households - 33,652
  • Retail sales per capita (1997) - $5,520
  • Median household income (1999) - $42,704
  • Persons per household - 2.61

We also wanted to find relevant consumer research studies. We searched for "buying local produce." We found that consumers value quality and consistency, taste and freshness, knowledge of how the produce was grown, food safety, and availability (see http://ianrnews.unl.edu/static/0309050.shtml)

During our search, we came across a link to a 2002 research report produced by staff at the Food Processing Center at the University of Nebraska (http://www.foodmap.unl.edu/report_files/locally_grown_concumer_survey_report.pdf). They surveyed 500 consumers who purchased locally produced foods and found:

  • 88 percent currently purchase locally grown fruit and 8 percent more indicated that they would if it were available.
  • 94 percent currently purchase locally grown vegetables and 2 percent more indicated they would if it were available.
  • 81 percent currently buy locally grown produce from a farmers' market, 76 percent from a grocery store, and 74 percent direct from a local farmer.

The data do not indicate the proportions of the total population, including those who do not purchase locally grown foods, that fit into each category but they do show that farmers' markets and direct marketing are good ways to reach consumers who purchase local foods.

Competitive Analysis

To learn a little bit about similar operations in Adams County, we visited the Pennsylvania Preferred program's website (http://www.papreferred.com) housed by the Pennsylvania Dept. of Ag. We followed their directions to find information about eight other firms.

Company

Open Dates

Enterprises

Beechwood Orchards

May - Nov

Fruits, vegetables, plants, honey, jam, pumpkins, maple syrup, U-Pick

Boyer Nurseries & Orchards

Mar - Dec

Fruits, vegetables, herbs, plants, nursery stock, honey, jam, pumpkins, maple syrup, U-Pick

Barbour's Fruit Market

Jun - Oct

Fruits, vegetables, honey, maple syrup

The Peters Orchards

Jan - Dec

Fruits, vegetables, baked goods, canned/preserved fruits

Round Barn Farm Market

Jun - Oct

Fruits, vegetables, herbs, baked goods, plants, gifts/crafts, jam, pumpkins, potatoes

Kuhn Orchards

May - Sep

Fruits

Sandoe's Fruit Market

May - Nov

Fruits, vegetables, plants, gifts/crafts, honey, jam

Weiser Orchards Fruit Stand

Jun - Nov

Fruits, vegetables, baked goods, honey, jam, pumpkins, maple syrup, melons, U-Pick

This information could help Hollabaugh Bros. to position itself in terms of enterprises grown. To complete the competitive analysis, we would need to learn a lot more about each firm. It would be good to know about their "position". That is, are they high quality/high price, low quality/low price, or are they somewhere in between. Do they offer other goods or services that complement their products identified above? Are they a relatively big player in the market? What types of consumers do they target?

There are many things you need to do to perform market research. This collection of data is a good start to the marketing planning process and is intended to show how much you can learn from your home computer with a bit of patience and knowledge about how to search and what to search for. This information is readily available. Make use of similar data and information as you perform your own market research.