Collaborative Marketing
Collaborative Marketing


Table of Contents

Introduction

Exploring Collaborative Marketing

Getting Started

Collaborative Marketing Group Profiles

Resource Guide



Steering Committee Tasks

  • Examine initial budget estimates closely, discuss them thoroughly, and keep refining them.
  • Assess prospects for the proposed business under a wide range of possible market scenarios.
  • Initiate and maintain contacts with potential customers and suppliers.
  • Continue to informally share ideas with other potential participants, but remember that it is far too early for a formal membership campaign or equity drive.
  • Identify and contact key agencies/individuals who can provide technical assistance and financing.


Selecting a Consultant

These tips on selecting a consultant are based on conversations with Rosemary Mahoney from CDS and Pam Thomsen from the Brainerd SBDC.
1. Clearly identify and communicate goals, objectives, and deliverables for the project. Put your expectations in writing, including the scope and content of work, timeline, and budget.
2. Request references and a sample feasibility study, marketing plan, or business plan. Make sure the consultant is knowledgeable about your group’s proposed line of business.
3. Check your comfort level. The consultant should be willing to spend time answering questions for your group to be sure everyone understands what is being proposed.

Getting Started

2. Informally Explore and Develop Your Idea

The Origins of Apple Crisp Cooperative
Beginning in the spring of 1993, apple grower Ross Nelson began circulating the idea of a marketing cooperative - an idea that Harry Hoch and several other producers quickly embraced. Together, Nelson and Hoch organized a meeting of 10 apple growers that same spring to discuss industry concerns and to brainstorm collective marketing ideas. At the end of the first meeting, a handful of growers volunteered to research information on cooperative development and to identify consulting options. "We tossed around the possibility of building a processing facility right away or of packing and labeling as a cooperative," Hoch recalls. Ultimately, the group agreed to a long-term strategy that involves three development stages: (1) packing and shipping apples collectively; (2) labeling and marketing collectively; and (3) acquiring buildings and expertise needed to store, pack, and process apples as a cooperative. With these long-term goals in mind, Hoch, Nelson, and Rick VanLin agreed to act as a steering committee on behalf of other interested growers. One of the first organizations they contacted was the Agricultural Utilization Research Institute (AURI) to get input on their plans. An AURI representative met with the steering committee to outline grant programs available and also pointed the growers to Cooperative Development Services (CDS).

Ideas for collaborative marketing usually originate with an individual or a very small group. In the initial phase, it’s important to look at your idea from a very broad perspective, without having too many concerns about the details of establishment and operations. The idea generation phase usually flows fairly seamlessly into a second phase in which you informally explore and develop those details. During this phase, the group of potential members of your CMG is likely to expand and you will make many more contacts with outside experts and organizations that may provide support for further development. The experiences of Apple Crisp Cooperative serve as an excellent example of a group’s activities during this phase of development.

Keep asking and answering questions

During this phase, you should return to many of the questions you considered during the idea generation phase.

  • Does our idea address a real, continuing market need or opportunity?
  • Is our idea technically feasible?
  • Is anyone else pursuing it?
  • Is collective action the best way to develop our idea?
  • Who will benefit from our idea?
  • What will be the costs of developing it and how can we finance those costs?

Note that the focus is shifting from "this idea" to "our idea." At this stage, it is crucial that you and others in your group share the same vision for marketing collabo-ratively and that you are committed to working together to develop it. Some important new questions arise during this informal exploration and development phase.

  • Do we share common goals and vision? Will this be a win-win situation for everyone involved?
  • Are the people needed for success involved in the process?
  • How large a group is needed to successfully implement this idea?
  • What organizational forms will we consider?
  • Who can help us with a more formal assessment of the technical and economic feasibility of our idea?

Establish a steering committee

During this phase, the level of activity is likely to pick up considerably. While this is not a time for making significant financial investments, it is a time for you and others in the group to increase your investments of time, energy, and expertise. In the process, you will learn much about commitment to your idea and your ability to work together. A steering committee can coordinate these efforts. It should meet regularly, with members sharing the workload of refining the idea and developing a plan for presenting it to potential members, customers, suppliers, and outside investors.

Consult with resource agencies

As you progress through this phase, members of the steering committee should also establish links with organizations and individuals who will provide essential resources and assistance in subsequent phases. Contacting government agencies and/or other organizations that are potential sources of funding and technical assistance is the best way to start. Most public and private sector resource organizations work together, and it is not at all unusual for a single CMG to work with several. As this phase progresses, though, your steering committee should probably select one or two "lead" agencies or organizations that can help coordinate outside assistance as your group continues to develop its business idea.

Identify an attorney

Regardless of size or structure, nearly every CMG will eventually need the services of an attorney. Your group may need an attorney to help assess alternative organizational forms and then take the steps necessary to legally establish yourselves as an organization. The choice of an organizational form depends on many factors. These include the nature of the business activity you are considering, the size of your group, and requirements established by potential sources of funds or technical assistance. In some cases, the right choice for the long run may not be clear and your group may choose a simple, relatively informal structure that can be modified as your business idea develops. Even in the planning phases of development, however, groups often need advice on how to safeguard the interests of the organization and individual participants. In later phases of development, legal counsel on securities regulations and possibly cooperative law is essential when equity is raised for a new business venture. Your group may also need the services of an attorney when you enter into loan agreements with lenders, make contractual arrangements with customers and suppliers, purchase property or equipment, hire employees, and begin operations.

During this phase, your group’s steering committee should identify attorneys who are able to work with you on legal issues. You may prefer to meet with an attorney in your local community or you may determine that the legal issues facing your CMG will require expertise that local attorneys cannot provide. Your group may want to set up an initial meeting with an attorney at this point. Often the first consultation is free, and being aware of legal issues before they become a problem can save money in the long run. During an initial meeting, you can describe your business idea and the attorney can identify what legal services are likely to be needed, when they will be needed, and how much you might expect to pay for legal fees. Even if you do not meet with an attorney at this point, you should identify one or more attorneys to contact when a need arises.

Identify consultants

Consultants can help your group do a more formal technical and market feasibility study and develop a business plan. A lead agency or organization may have staff who can provide these services, or they may be able to recommend consultants who would be appropriate for a particular business idea. Sound information on feasibility and a solid business plan are essential as you and other potential members consider investing in and committing farm production to a collaborative marketing venture. Lenders, key suppliers, and customers will require the same information before establishing a relationship with your CMG. Be sure the consultants you choose have expertise and experience in your commodity area. Also be sure that they will deliver an "action plan" along with the results of their research. The best information on market demand or business conditions is worth little without a clear plan for acting on it.

Identify potential lenders

Finally, your group’s steering committee should also begin to identify potential lenders. It is far too soon to be making even an informal loan proposal, but you can collect information that will save time and increase your chances of success when you do request a loan. For each lender you are considering, you’ll want to determine whether they make loans for facilities, equipment, and operations to businesses like you are considering; what information and documentation they require for a formal loan proposal; and whether they have experience working with state and/or federal agencies that may provide loan guarantees. After gathering this information from several potential lenders, your group will probably be able to identify the lender who will be approached first when and if you make a formal loan application.

Outcomes

As in the idea generation phase, there are three possible outcomes from this phase of development for your CMG. First, it may be clear that the idea is not feasible. Your group may then disband or continue to explore other alternatives. Second, a subset of your group may decide to develop the idea as individual entrepreneurs. Finally, you may decide to continue with formal development of the idea through collective action. Groups that do continue with development should have thoroughly discussed all aspects of their business concept. They should also have identified a lead organization to help guide them through further development and consultants for feasibility analyses and business plan development. They may also have identified an attorney and a potential lender. Often, they will have also formally organized as a legally recognized entity by the end of this phase.

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