Hey there y'all...Welcome Back to Que-Licious!
I recently read a blog post about marketing and case study findings in the small food business industry that spoke directly to me. The complete article can be found here at Small Food Business; The Soup to Nuts Resource for Artisan Food Entrepreneurs. I enjoy this blog for several reasons; but mainly because I find the mix of business advice and food topics well balanced and relatable. The latest article; Don't Compete on Price - Also Known As Why I Failed My First MBA Marketing Project, was as if the author was speaking to me directly given that I am gearing up for my own product launch September 1st.
One sentence in particular stood out..."And so began what’s known as ‘the race to the bottom’ where companies are willing to give up profit margin in order to gain a bigger share of the market."
As it turns out, I had just finished working on marketing material to promote a couple of catering packages to list on Whiskey River BBQ & Caterings Facebook page, blog, and proofs for commercial printing. I was recently asked about my pricing structure from friends of mine whose opinion I value a great deal. I value their opinion because, yes they are friends and family; but they are also candid when they believe or don't believe in something; either way...you are going to know about it. That's what happened when I asked them to review an ad for some feedback.
At first, I will admit that it was tempting to consider offering our catering services at a lower price just to get our foot in the door and introduce Whiskey River BBQ & Catering's products and services. Then I snapped back to reality. Yes I could undercut the competition on price, but at what real cost? The "Big Boys of BBQ" - as I like to call a couple of chains in my area - could very easily counteract any low-ball introductory offer I could advertise simply because they are just that...BIG. These same "Big Boys" have a loyal customer base, restaurants, and/or compete professionally on the barbecue circuit and have spent years building their brand and reputations. Inevitably, it would spur a snowball effect of price wars, not only in the barbecue food specialty market, but anyone offering catering services within our area would be inclined to do the same. For me, the race would be over before the starting gun sounded and quite honestly...it's just not a realistic approach to starting my business. Besides the obvious cost of purchasing ingredients, production costs, packaging expenses, and kitchen rental fees; I also did not want to overlook or "donate" my time in producing the product and running the business. Yes this is a labor of love and I honestly don't ever stop thinking about my business or trying new ideas; but I also realize my time is important and worth something. (OK...maybe not as much to some as to me, but worth something!) And let's not lose sight of the fact that my whole purpose and intent is to continue to grow my business successfully which means setting an attainable profit margin to re-invest back into the continued growth of Whiskey River.
When first researching catering vendors specializing in barbecue foods, specifically whole hog barbecue, I was overwhelmed at the different pricing structures and methods used and just ended up confused and frustrated trying to make sense of it all. Some vendors priced by the number of guests (example: 50-100 = $/person,101-200=$/person and so on) by the plate, by the pound, ribs are more than pork, brisket is more than ribs and pork combined...ughhhh! ENOUGH! Designing our catering menu was the single most challenging obstacle I had to overcome...period! Developing recipes for our bottled products...no problem; designing a mobile concession menu...piece of cake; trying to please the masses on barbecue catering...impossible! Somehow I managed to pull it off...please don't ask me how...but it's done! I take extreme pride in the quality of food that we produce for the events we cater; as well as our sauces and rubs we are bringing to the retail market and I don't feel that all of our hard work should be under-valued in hopes of being the front-runner in the barbecue market. I'm patient...I can wait for my day in the sun.
I realized from the onset of starting Whiskey River that there are elements of our products and services that stand out from our competitors that have nothing to do with price. This is also a good time to mention, be sure when you are comparing vendors for catering services that you are comparing apples to apples. If couscous and Peking Duck are on your top choice for your catered event; you probably aren't looking for a caterer specializing in barbecue food. (Yes...we got that call) The point is, weather you are selling barbecue or band-aids don't sell yourself short by under-valuing your product, service, and time. After all, you were the one smart enough to develop a plan for your one-of-a-kind product/service; be brave enough to see it through.
So why the big rant about price, product, profit margin and such...glad you asked!
I am officially introducing our new Catering page to the blog today! I am excited and scared to death all at the same time and it feels amazing!
Be sure to share this post with all of your friends, fans, and followers and until next post...
Keep cookin' y'all!
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